Equifax 2012 Annual Report Download - page 55

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Equifax 2012 Annual Report
Under our Senior Credit Facility, we must comply with various
financial and non-financial covenants. The financial covenants require
us to maintain a maximum leverage ratio, defined as consolidated
funded debt divided by consolidated EBITDA (as set forth in the
Senior Credit Facility) for the preceding four quarters, of not more
than 3.5 to 1.0. Compliance with this financial covenant is tested
quarterly. The non-financial covenants include limitations on liens,
subsidiary debt, mergers, liquidations, asset dispositions and acquisi-
tions. As of December 31, 2012, we were in compliance with our
covenants under the Senior Credit Facility. Our borrowings under this
facility, which have not been guaranteed by any of our subsidiaries,
are unsecured and will rank on parity in right of payment with all of
our other unsecured and unsubordinated indebtedness from time to
time outstanding.
At December 31, 2012, interest was payable on borrowings under
the existing credit facility at the base rate or London Interbank
Offered Rate, or LIBOR, plus a specified margin. The annual unused
fee, which we pay on the unused portion of the revolver, and interest
rate are subject to adjustment based on our debt ratings. As of
December 31, 2012, $483.6 million was available for borrowings and
there were no outstanding borrowings under the Senior Credit Facil-
ity, which is included in long-term debt on our Consolidated
Balance Sheets.
While the underlying final maturity date of this facility is
December 2017, it is structured to provide borrowings under short-
term loans. Because these borrowings primarily have a maturity of
ninety days, the borrowings and repayments are presented on a net
basis within the financing activities portion of our Consolidated State-
ments of Cash Flows as net (repayments) borrowings under long-
term revolving credit facilities.
CP Program. During the fourth quarter of 2012, we increased the
size of our CP program from $500.0 million to $750.0 million. Our CP
program has been established through the private placement of CP
notes from time to time, in which borrowings bear interest at either a
variable rate (based on LIBOR or other benchmarks) or a fixed rate,
with the applicable rate and margin. Maturities of CP can range from
overnight to 397 days. Because the CP program is backstopped by
our Senior Credit Facility, the amount of CP which may be issued
under the program is reduced by the outstanding face amount of any
letters of credit issued under the facility and, pursuant to our existing
Board of Directors authorization, by the outstanding borrowings
under our Senior Credit Facility. At December 31, 2012,
$265.0 million in CP notes was outstanding, all with maturities of less
than 90 days.
7.34% Notes. At the closing of the TALX acquisition in May 2007, we
assumed $75.0 million in 7.34% Senior Guaranteed Notes, or TALX
Notes, privately placed by TALX with several institutional investors in
May 2006. We are required to repay the principal amount of the TALX
Notes in five equal annual installments commencing on May 25, 2010
with a final maturity date of May 25, 2014. We may prepay the TALX
Notes subject to certain restrictions and the payment of a make-
whole amount. Under certain circumstances, we may be required to
use proceeds of certain asset dispositions to prepay a portion of the
TALX Notes. Interest on the TALX Notes is payable semi-annually
until the principal becomes due and payable. We identified a fair value
adjustment related to the TALX Notes in applying purchase account-
ing; this amount is being amortized against interest expense over the
remainder of the term of the TALX Notes. At December 31, 2012, the
remaining balance of this adjustment is $0.4 million and is included in
long-term debt on the Consolidated Balance Sheets.
4.45% Senior Notes. On November 4, 2009, we issued
$275.0 million principal amount of 4.45%, five-year senior notes in an
underwritten public offering. Interest is payable semi-annually in
arrears on December 1 and June 1 of each year. We used the net
proceeds from the sale of the senior notes to repay outstanding bor-
rowings under our CP program, a portion of which was used to
finance our fourth quarter 2009 acquisitions. The senior notes are
unsecured and rank equally with all of our other unsecured and
unsubordinated indebtedness. In conjunction with the senior notes,
we entered into five-year interest rate swaps, designated as fair value
hedges, which convert the fixed interest rate to a variable rate. The
long-term debt fair value adjustment related to these interest rate
swaps was an increase of $12.2 million at December 31, 2012.
6.3% and 7.0% Senior Notes. On June 28, 2007, we issued
$300.0 million principal amount of 6.3%, ten-year senior notes and
$250.0 million principal amount of 7.0%, thirty-year senior notes in
underwritten public offerings. Interest is payable semi-annually in
arrears on January 1 and July 1 of each year. The net proceeds of
the financing were used to repay short-term indebtedness, a
substantial portion of which was incurred in connection with our
acquisition of TALX. We must comply with various non-financial
covenants, including certain limitations on liens, additional debt and
mortgages, mergers, asset dispositions and sale-leaseback arrange-
ments. The senior notes are unsecured and rank equally with all of
our other unsecured and unsubordinated indebtedness.
3.3% Senior Notes. On December 17, 2012, we issued
$500.0 million principal amount of 3.3%, ten-year senior notes in an
underwritten public offering. Interest is payable semi-annually in
arrears on December 15 and June 15 of each year. The net proceeds
of the sale of the notes were used to finance the acquisition of CSC
Credit Services in December 2012. We must comply with various
non-financial covenants, including certain limitations on liens,
additional debt and mortgages, mergers, asset dispositions and sale-
leaseback arrangements. The senior notes are unsecured and rank
equally with all of our other unsecured and unsubordinated
indebtedness.