LensCrafters 2007 Annual Report Download - page 70
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common stock were converted into the right to receive US$ 29.30 per share in cash. As a result of
the completion of the merger, Oakley is now a wholly-owned subsidiary of our Group and Oakley’s
shares have ceased to be traded on the New York Stock Exchange.
To finance the acquisition, on October 12, 2007, we and our subsidiary U.S. Holdings entered into
two credit facilities with a group of banks providing for certain term loans and a bridge loan for an
aggregate principal amount of US$ 2.0 billion.
The term loan facility is a Term Loan of US$ 1.5 billion, with a five-year term, with options to extend
the maturity on two occasions for one year each time. The term loan facility is divided into two
facilities, Facility D and Facility E. Facility D consists of an amortizing term loan in an aggregate
amount of US$ 1.0 billion, made available to U.S. Holdings, and Facility E consists of a term loan in
an aggregate amount of US$ 500 million, made available to the Company. Each facility has a five-
year term, with options to extend the maturity on two occasions for one year each time. The term
loan has a spread of between 20 and 40 basis points over LIBOR, depending on the “net debt to
EBITDA” ratio, as defined in the agreement (5.503% for Facility D and 5.458% for Facility E on
December 31, 2007) The final maturity of the credit facility is October 12, 2012. These credit
facilities contain certain financial and operating covenants. The Company was in compliance with
those covenants as of December 31, 2007. US$ 1,500.0 million was borrowed under this credit
facility as of December 31, 2007.
During the fourth quarter of 2007, the Group entered into ten interest rate swap transactions with
an aggregate initial notional amount of US$ 500.0 million with various banks (“Tranche E Swaps”).
These swaps will expire on October 12, 2012. The Tranche E Swaps were entered into as a cash
flow hedge on Facility E of the credit facility discussed above. The Tranche E Swaps exchange the
floating rate of Libor for an average fixed rate of 4.26% per annum.
The short term bridge loan facility is for an aggregate principal amount of US$ 500 million.
This facility is underwritten by Bank of America Securities Limited and UniCredit Markets and
Investment Banking (acting through Bayerische Hypo - und Vereinsbank AG - Milan Branch).
Interest accrues on the short term bridge loan at LIBOR (as defined in the agreement) plus 0.15%
(5.208% on December 31, 2007). The final maturity of the credit facility is eight months from the first
utilization date. US$ 500 million was borrowed under this credit facility as of December 31, 2007.
FINANCING RESOURCES
AND ARRANGEMENTS | 69 <