Dollar General 2009 Annual Report Download - page 97

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Current and long-term obligations (Continued)
unutilized commitments under the ABL Facility are equal to or less than 50% of the aggregate
commitments under the ABL 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 ABL Facility requires the Company to prepay
the ABL Facility, subject to certain exceptions, with proceeds of non-ordinary course asset sales or
dispositions of property and any borrowings in excess of the then current borrowing base. The Term
Loan Facility can be prepaid in whole or in part at any time.
Beginning September 30, 2009, the Company was required to repay installments on the loans
under the Term Loan Facility in equal quarterly principal amounts in an aggregate amount per annum
equal to 1% of the total funded principal amount at July 6, 2007. During 2009, the Company paid two
such quarterly installments totaling $11.5 million. In addition, in January 2010 the Company voluntarily
prepaid $325 million of the principal balance of the Term Loan Facility, and as a result, no further
quarterly principal installments will be required prior to maturity of the Term Loan Facility on July 6,
2014. The Company incurred a pretax loss of $4.7 million for the write off of debt issuance costs
associated with this prepayment.
All obligations under the Credit Facilities are unconditionally guaranteed by substantially all of the
Company’s existing and future domestic subsidiaries (excluding certain immaterial subsidiaries and
certain subsidiaries designated by the Company under the Credit Facilities as ‘‘unrestricted
subsidiaries’’).
All obligations and guarantees of those obligations under the Term Loan Facility are secured by,
subject to certain exceptions, a second-priority security interest in all existing and after-acquired
inventory and accounts receivable; a first priority security interest in substantially all of the Company’s
and the guarantors’ tangible and intangible assets (other than the inventory and accounts receivable
collateral); and a first-priority pledge of the capital stock held by the Company. All obligations under
the ABL Facility are secured by all existing and after-acquired inventory and accounts receivable,
subject to certain exceptions.
The Credit Facilities contain certain covenants, including, among other things, covenants that limit
the Company’s ability to incur additional indebtedness, sell assets, incur additional liens, pay dividends,
make investments or acquisitions, or repay certain indebtedness.
Under the ABL facility, for the year ended January 29, 2010, the Company had no borrowings or
repayments; for the year ended January 30, 2009, the Company had no borrowings and repayments of
$102.5 million; and for the 2007 Successor period the Company had borrowings of $1.522 billion and
repayments of $1.420 billion. As of January 29, 2010 and January 30, 2009, respectively, the Company
had no borrowings, $85.1 million and $83.7 million of standby letters of credit, and $15.4 million and
$51.0 million of commercial letters of credit, outstanding under the ABL Facility, with excess
availability under the ABL Facility of $930.6 million and $932.8 million.
On July 6, 2007, in conjunction with the Merger, the Company issued $1.175 billion aggregate
principal amount of 10.625% senior notes due 2015 (the ‘‘Senior Notes’’) which were issued net of a
discount of $23.2 million and which mature on July 15, 2015 pursuant to an indenture, dated as of
July 6, 2007 (the ‘‘senior indenture’’), and $725 million aggregate principal amount of 11.875%/12.625%
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