GameStop 2010 Annual Report Download - page 92

Table of Contents
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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.
Between May 2006 and October 2010, the Company repurchased and redeemed the $300 million of Senior Floating Rate Notes and
$400 million of Senior Notes under previously announced buybacks authorized by the Company's Board of Directors. All of the authorized amounts
were repurchased or redeemed and the repurchased Notes were delivered to the Trustee for cancellation. The associated loss on the retirement of
debt was $6.0 million, $5.3 million and $2.3 million for the 52 week periods ended January 29, 2011, January 30, 2010 and January 31, 2009,
respectively, which consisted of the premium paid to retire the Notes and the write-off of the deferred financing fees and the original issue discount
on the Notes.
The changes in the carrying amount of the Senior Notes for the Company for the 52 weeks ended January 30, 2010 and the 52 weeks ended
January 29, 2011 were as follows (in millions):
Balance at January 31, 2009 $ 545.7
Repurchase of Senior Notes, net (98.4)
Balance at January 30, 2010 $ 447.3
Repurchase of Senior Notes, net (198.3)
Balance at January 29, 2011 $ 249.0
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
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