Dollar General 2007 Annual Report Download - page 85

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2014, and a senior secured asset-based revolving credit facility of up to $1,125.0 million, subject
to borrowing base availability, which matures on July 6, 2013.
Under the New Credit Facilities, the Company has the right at any time to request up to
$325.0 million of incremental commitments under one or more incremental term loan facilities
and/or asset-based revolving credit facilities, subject to certain conditions and subject to the
lender’ s desire to extend the incremental facilities.
The amount from time to time available under the senior secured asset-based revolving
credit facility (including in respect of letters of credit) may not exceed the borrowing base
(consisting of specified percentages of eligible inventory and credit card receivables less any
applicable availability reserves). The senior secured asset-based revolving credit facility
includes a $1.0 billion tranche and a $125.0 million (“last out”) tranche. Repayments of the
senior secured asset-based revolving credit facility will be applied to the $125.0 million tranche
only after all other tranches have been fully paid down. As of February 1, 2008, the Company
had borrowed $102.5 million under the “last out” tranche.
Borrowings under the New Credit Facilities bear interest at a rate equal to an applicable
margin plus, at the Company’ s option, either (a) LIBOR or (b) a base rate (which is usually equal
to the prime rate). The applicable margin for borrowings is (i) under the term loan facility,
2.75% with respect to LIBOR borrowings and 1.75% with respect to base-rate borrowings and
(ii) as of February 1, 2008, under the asset-based revolving credit facility (except in the last out
tranche described above), 1.50% with respect to LIBOR borrowings and 0.50% with respect to
base-rate borrowings and for any last out borrowings, 2.25% with respect to LIBOR borrowings
and 1.25% with respect to base-rate borrowings. The applicable margins for borrowings under
the asset-based revolving credit facility (except in the case of last out borrowings) are subject to
adjustment each quarter based on average daily excess availability under the asset-based
revolving credit facility. As of February 1, 2008, the average interest rate for borrowings under
the revolving credit facility was 6.35%. The interest rate for borrowings under the term loan
facility was 6.22% (without giving effect to the interest rate swap discussed in Note 1) as of
February 1, 2008.
In addition to paying interest on outstanding principal under the New Credit Facilities,
the Company is required to pay a commitment fee to the lenders under the asset-based revolving
credit facility in respect of the unutilized commitments thereunder. The commitment fee rate
was 0.375% per annum. The commitment fee rate will be reduced (except with regard to the last
out tranche) to 0.25% per annum at any time that the unutilized commitments under the asset-
based credit facility are equal to or less than 50% of the aggregate commitments under the asset-
based revolving credit facility. The Company also must pay customary letter of credit fees.
The senior secured credit agreement for the term loan facility requires the Company to
prepay outstanding term loans, subject to certain exceptions, with percentages of excess cash
flow, proceeds of non-ordinary course asset sales or dispositions of property, and proceeds of
incurrences of certain debt. In addition, the senior secured credit agreement for the asset-based
revolving credit facility requires the Company to prepay the asset-based revolving credit facility,
subject to certain exceptions, with proceeds of non-ordinary course asset sales or dispositions of