Family Dollar 2010 Annual Report Download - page 53

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5. Current and Long-Term Debt:
Current and long-term debt consisted of the following at the end of fiscal 2010 and fiscal 2009:
(in thousands) August 28, 2010 August 29, 2009
5.24% Notes ............................................. $ 81,000 $ 81,000
5.41% Notes ............................................. 169,000 169,000
250,000 250,000
Less: current portion ...................................... — —
Long-term portion ........................................ $250,000 $250,000
On September 27, 2005, the Company obtained $250 million through a private placement of unsecured Senior
Notes (the “Notes”) to a group of institutional accredited investors. The Notes were issued in two tranches at par
and rank pari passu in right of payment with the Company’s other unsecured senior indebtedness. The first
tranche has an aggregate principal amount of $169 million, is payable in a single installment on September 27,
2015, and bears interest at a rate of 5.41% per annum from the date of issuance. The second tranche has an
aggregate principal amount of $81 million, matures on September 27, 2015, with amortization commencing on
September 27, 2011, and bears interest at a rate of 5.24% per annum from the date of issuance. The second
tranche has a required principal payment of $16.2 million on September 27, 2011, and on each September 27
thereafter to and including September 27, 2015. Interest on the Notes is payable semi-annually in arrears on the
27th day of March and September of each year. The Notes contain certain restrictive financial covenants, which
include a consolidated debt to consolidated capitalization ratio, a fixed charge coverage ratio, and a priority debt
to consolidated net worth ratio. As of August 28, 2010, the Company was in compliance with all such covenants.
On December 16, 2009, the Company entered into an unsecured revolving credit facility with a syndicate of
lenders for short-term borrowings of up to $250 million. The credit facility has an initial term of 364 days and
provides for two one-year extensions that require lender consent. Any borrowings under the credit facility accrue
interest at a variable rate based on short-term market interest rates. The credit facility replaced the Company’s
previous $250 million 364-day credit facility.
The Company also maintains a $350 million unsecured revolving credit facility that matures on August 24, 2011.
Any borrowings under this credit facility also accrue interest at a variable rate based on short-term market
interest rates. Outstanding standby letters of credit ($153.9 million as of August 28, 2010) reduce the amount
available for borrowing under the $350 million credit facility.
There were no borrowings under the credit facilities during fiscal 2010 and fiscal 2009. The credit facilities
contain certain restrictive financial covenants, which include a consolidated debt to consolidated capitalization
ratio, a fixed charge coverage ratio, and a priority debt to consolidated net worth ratio. As of August 28, 2010,
the Company was in compliance with all such covenants.
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