GameStop 2010 Annual Report Download - page 58

Table of Contents
the Line of Credit and Bank of America may withdraw the facility at any time without notice. The Line of Credit will be made available to the
Company's foreign subsidiaries for use primarily as a bank overdraft facility for short-term liquidity needs and for the issuance of bank guarantees
and letters of credit to support operations. As of January 29, 2011, there were $11.0 million of cash overdrafts outstanding under the Line of Credit
and bank guarantees outstanding totaled $5.6 million.
In September 2005, the Company, along with GameStop, Inc. as co-issuer (together with the Company, the "Issuers"), completed the offering
of $300 million aggregate principal amount of Senior Floating Rate Notes due 2011 (the "Senior Floating Rate Notes") and $650 million aggregate
principal amount of Senior Notes due 2012 (the "Senior Notes" and, together with the Senior Floating Rate Notes, the "Notes"). The Notes were
issued under an Indenture, dated September 28, 2005 (the "Indenture"), by and among the Issuers, the subsidiary guarantors party thereto, and
Citibank, N.A., as trustee (the "Trustee"). In November 2006, Wilmington Trust Company was appointed as the new Trustee for the Notes.
The Senior Notes bear interest at 8.0% per annum, mature on October 1, 2012 and were priced at 98.688%, resulting in a discount at the time
of issue of $8.5 million. The discount is being amortized using the effective interest method. As of January 29, 2011, the unamortized original issue
discount was $1.0 million. The Issuers pay interest on the Senior Notes semi-annually, in arrears, every April 1 and October 1, to holders of record
on the immediately preceding March 15 and September 15, and at maturity.
The Indenture contains affirmative and negative covenants customary for such financings, including, among other things, limitations on (1) the
incurrence of additional debt, (2) restricted payments, (3) liens, (4) sale and leaseback transactions and (5) asset sales. Events of default provided for
in the Indenture include, among other things, failure to pay interest or principal on the Notes, other breaches of covenants in the Indenture, and
certain events of bankruptcy and insolvency. As of January 29, 2011, the Company was in compliance with all covenants associated with the
Revolver and the Indenture.
Under certain conditions, the Issuers may on any one or more occasions prior to maturity redeem up to 100% of the aggregate principal
amount of Senior Notes issued under the Indenture at redemption prices at or in excess of 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the redemption date. The circumstances which would limit the percentage of the Notes which may be redeemed or which
would require the Company to pay a premium in excess of 100% of the principal amount are defined in the Indenture. Upon a Change of Control (as
defined in the Indenture), the Issuers are required to offer to purchase all of the Notes then outstanding at 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase. The Issuers may acquire Senior Notes by means other than redemption, whether by
tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisitions
do not otherwise violate the terms of the Indenture.
In November 2008, in connection with the acquisition of Micromania, the Company entered into a Term Loan Agreement (the "Term Loan
Agreement") with Bank of America, N.A. and Banc of America Securities LLC. The Term Loan Agreement provided for term loans ("Term Loans")
in the aggregate of $150 million, consisting of a $50 million secured term loan ("Term Loan A") and a $100 million unsecured term loan ("Term
Loan B"). The effective interest rate on Term Loan A was 5.75% per annum and the effective rate on Term Loan B ranged from 5.0% to 5.75% per
annum.
In addition to the $150 million under the Term Loans, the Company borrowed $275 million under the Credit Agreement to complete the
acquisition of Micromania in November 2008. As of January 31, 2009, the Credit Agreement and the Term Loans were repaid in full.
As of January 30, 2010 and January 29, 2011, the only long-term debt outstanding was the Senior Notes.
The maturity on the $250 million Senior Notes, gross of the unamortized original issue discount of $1.0 million, occurs in the fiscal year
ending January 2013. 42