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> 78 | ANNUAL REPORT 2009
credit facility consisted of a revolving loan that provided borrowing availability of up to Euro 100.0 mil-
lion. Amounts borrowed under the revolving portion could be borrowed and repaid until final maturity.
Interest accrued on the revolving loan at EURIBOR (as defined in the agreement) plus 0.25 percent.
The Company could select interest periods of one, three or six months. The credit facility expired on
December 3, 2008, and the credit facility was repaid in full.
In April 2008, the Company entered into a new Euro 150.0 million unsecured credit facility with Banca
Nazionale del Lavoro. This facility is an 18-month revolving credit facility that provides borrowing avail-
ability of up to Euro 150.0 million. The amounts borrowed under the revolving facility can be borrowed
and repaid until final maturity. Interest accrued at EURIBOR plus 0.375 percent. The Company could
select interest periods of one, three or six months. In June 2009, the Company renegotiated this credit
facility. The new facility consists of a 2 year unsecured credit facility that is a revolving loan that provides
borrowing availability of up to Euro 150.0 million. Amounts borrowed under the revolving loan can be
borrowed and repaid until final maturity. Interest accrues at EURIBOR plus 1.90 percent. The Company
can select interest periods of one, three or six months. The final maturity of the credit facility is July 13,
2011. As of December 31, 2009 this facility was not used.
On May 29, 2008, the Company entered into a Euro 250.0 million revolving credit facility, guaranteed
by its subsidiary, Luxottica US Holdings Corp. (US Holdings), with Intesa Sanpaolo S.p.A., as agent, and
Intesa Sanpaolo S.p.A., Banca Popolare di Vicenza S.c.p.A. and Banca Antonveneta S.p.A., as lenders.
The final maturity of the credit facility is May 29, 2013. The credit facility will require repayment of equal
quarterly installments of Euro 30.0 million of principal starting on August 29, 2011, and a repayment of
Euro 40.0 million on the final maturity date. Interest accrues at EURIBOR (as defined in the agreement)
plus a margin between 0.40 percent and 0.60 percent based on the "Net Debt/EBITDA" ratio, as de-
fined in the agreement (1.267 percent as of December 31, 2009). As of December 31, 2009, Euro 250.0
million was borrowed under this credit facility.
In June and July 2009, the Company entered into eight interest rate swap transactions with an ag-
gregate initial notional amount of Euro 250.0 million with various banks ("Intesa Swaps"). The Intesa
Swaps will decrease their notional amount on a quarterly basis, following the amortization schedule
of the underlying facility, starting on August 29, 2011. These Intesa Swaps will expire on May 29, 2013.
The Intesa Swaps were entered into as a cash flow hedge on the Intesa Sanpaolo S.p.A. credit facility
discussed above. The Intesa Swaps exchange the floating rate of EURIBOR for an average fixed rate
of 2.25 percent per annum. The ineffectiveness of cash flow hedges was tested at the inception date
and at least every three months. The results of the tests indicated that the cash flow hedges are highly
effective. As a consequence approximately Euro (1.3) million, net of taxes, is included in other compre-
hensive income as of December 31, 2009. Based on current interest rates and market conditions, the
estimated aggregate amount to be recognized as earnings from other comprehensive income for these
cash flow hedges in fiscal 2010 is approximately Euro (1.9) million, net of taxes.
On November 11, 2009, the Company entered into a Euro 300 million Term Facility Agreement, guaran-
teed by its subsidiaries US Holdings and Luxottica S.r.l., with Mediobanca - Banca di Credito Finanziario
S.p.A., as agent, and Mediobanca - Banca di Credito Finanziario S.p.A., Deutsche Bank S.p.A., Calyon
S.A. Milan Branch and Unicredit Corporate Banking S.p.A., as lenders. The final maturity of the Term
Facility is November 30, 2012. Interest will accrue at EURIBOR (as defined in the agreement) plus a
margin between 1.75 percent and 3.00 percent based on the "Net Debt/EBITDA" ratio (2.98 percent
as of December 31, 2009). As of December 31, 2009, Euro 300.0 million was borrowed under this credit
facility.
(b) On September 3, 2003, US Holdings closed a private placement of US$ 300 million (Euro 209.3 million
at the exchange rate as of December 31, 2009) of senior unsecured guaranteed notes (the "Notes"),