First Data 2007 Annual Report Download - page 66

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
On September 24, 2007, in conjunction with the merger, the Company repurchased debt as follows:
(in millions)
Principal
Amount
Repurchased
Medium-term note due 2007 $ 59.8
Medium-term note due 2008 26.9
3.375% Notes due 2008 431.9
3.90% Notes due 2009 87.5
4.50% Notes due 2010 137.3
5.625% Notes due 2011 115.7
4.70% Notes due 2013 428.6
4.85% Notes due 2014 338.3
4.95% Notes due 2015 360.9
$ 1,986.9
In combination with the September debt repurchases, the Company terminated the interest rate swaps associated with these debt instruments. The
Company incurred a fee of $6.0 million in connection with this debt repurchase as well as an $11.2 million charge representing the premium for consent from
holders to modify terms of the Company's debt they held.
In December 2007, the Company paid off its medium-term note due in 2008 for $25.6 million.
Payments for capital leases were $14.3 million for the 2007 successor period, $35.0 million for the 2007 predecessor period and $40.4 million and
$42.2 million for the twelve months ended December 31, 2006 and 2005, respectively.
In September 2006, the Company paid off senior notes in the amount of $650 million. In November and December 2006, the Company re-purchased
approximately $1.7 billion of its long-term debt with proceeds from the spin-off.
In July 2005, the Company's $200.0 million 6.75% medium-term note reached maturity and the Company repaid the principal balance.
Proceeds from Issuance of Long-Term Debt
On September 24, 2007, the Company entered into several new debt instruments in conjunction with the merger. Details of each instrument are
described below. The senior unsecured cash-pay term loan facility, senior unsecured PIK term loan facility and senior subordinated unsecured term loan
facility represent bridge financing (the "bridge facilities"). The Company may issue note securities to replace these bridge facilities on or before one year from
the transaction date. In October 2007, $2.2 billion of the senior unsecured cash-pay term loan facility was repaid upon issuance of 9.875% senior unsecured
cash-pay notes due 2015.
Fees totaling $555.0 million associated with the merger have been capitalized as deferred financing costs and are reported in the "Other assets" line of
the Consolidated Balance Sheet. Approximately $112.5 million of fees were incurred and capitalized on the bridge facilities of which $27.5 million was
subsequently recovered upon repayment of the $2.2 billion of senior unsecured cash-pay term loan facility. The terms of the bridge facilities provide for the
repayment of all or a diminishing portion of the fees, depending upon timing, if the bridge facilities are refinanced in less than a year. Currently only a portion
is redeemable (50% of fees paid on bridge facilities are recoverable upon re-financings through May 21, 2008 and 25% recoverable thereafter through
September 24, 2008). The Company will incur additional underwriting fees when the bridge facilities are extended into long-term loans, exchanged for notes
or refinanced with other third parties (of which $44.0 million was incurred upon issuance of the $2.2 billion of 9.875% senior unsecured cash-pay notes and is
included in the $555.0 million balance noted above). The deferred financing costs (other than the $85.0 million which is being amortized over the one year
bridge period) are being amortized over the respective terms of the debt instruments.
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