Logitech 2013 Annual Report Download - page 197

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10 — Financing Arrangements
In December 2011, the Company entered into a Senior Revolving Credit Facility Agreement with a group of
primarily Swiss banks that provides for a revolving multicurrency unsecured credit facility in an amount of up to
$250.0 million. The Company may, upon notice to the lenders and subject to certain requirements, arrange with
existing or new lenders to provide up to an aggregate of $150.0 million in additional commitments, for a total of
$400.0 million of unsecured revolving credit. The credit facility may be used for working capital, general corporate
purposes, and acquisitions. There were no outstanding borrowings under the credit facility at March 31, 2013
or 2012.
The credit facility matures on October 31, 2016. The Company may prepay the loans under the credit facility
in whole or in part at any time without premium or penalty. Borrowings under the credit facility will accrue interest
at a per annum rate based on LIBOR (London Interbank Offered Rate), or EURIBOR (Euro Interbank Offered
Rate) in the case of loans denominated in euros, plus a variable margin determined quarterly based on the ratio of
senior debt to earnings before interest, taxes, depreciation and amortization for the preceding four-quarter period,
plus, if applicable, an additional rate per annum intended to compensate the lenders for the cost of compliance with
regulatory reserve requirements and other banking regulations. The Company also pays a quarterly commitment
fee of 40% of the applicable margin on the available commitment. In connection with entering into the credit
facility, the Company incurred non-recurring fees totaling $1.5 million, which are amortized on a straight-line basis
over the term of the credit facility.
The facility agreement contains representations, covenants, including threshold financial covenants, and
events of default customary in Swiss credit markets. Affirmative covenants include covenants regarding reporting
requirements, maintenance of insurance, maintenance of properties and compliance with applicable laws and
regulations, and financial covenants that require the maintenance of net senior debt, interest cover and adjusted
equity ratios determined in accordance with the terms of the facility. Negative covenants limit the ability of the
Company and its subsidiaries, among other things, to grant liens, make investments, incur debt, make restricted
payments, enter into a merger or acquisition, or sell, transfer or dispose of assets, in each case subject to certain
exceptions. As of March 31, 2013, the Company was not in compliance with the interest cover ratio of this facility.
This situation resulted from the significant operating loss incurred during fiscal year 2013. The Company believes
that this is only a short-term situation. Until the Company is in compliance with all covenants, including the interest
cover ratio, this facility is not available for its use.
This facility stipulates that, upon an uncured event of default under the facility, the lenders may declare all
or a portion of the outstanding obligations payable by the Company to be immediately due and payable, terminate
their commitments and exercise other rights and remedies provided for under the facility. The events of default
under the facility include, among other things, payment defaults, covenant defaults, inaccuracy of representations
and warranties, cross defaults with certain other indebtedness, bankruptcy and insolvency events and events that
have a material adverse effect (as defined in the facility). Upon a change of control of the Company, lenders
whose commitments aggregate more than two-thirds of the total commitments under the facility may terminate the
commitments and declare all outstanding obligations to be due and payable.
The Company had several uncommitted, unsecured bank lines of credit aggregating $55.8 million at
March 31, 2013. There are no financial covenants under these lines of credit with which the Company must comply.
At March 31, 2013, the Company had no outstanding borrowings under these lines of credit. The Company also
had credit lines related to corporate credit cards totaling $17.3 million as of March 31, 2013. The outstanding
borrowings under these credit lines are recorded in other current liabilities. There are no financial covenants under
these credit lines.
ANNUAL REPORT
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