ManpowerGroup 2014 Annual Report Download - page 42

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Euro Notes
We have €350.0 million aggregate principal amount 4.50% notes due June 22, 2018 (the “€350.0 million Notes”), which
were issued at a price of 99.974% to yield an effective interest rate of 4.505%. Interest on the €350.0 million Notes is
payable in arrears on June 22 of each year. The €350.0 million Notes are unsecured senior obligations and rank equally with
all of our existing and future senior unsecured debt and other liabilities. We may redeem the €350.0 million Notes, in whole
but not in part, at our option at any time for a redemption price determined in accordance with the term of the €350.0
million Notes. The €350.0 million Notes also contain certain customary non-financial restrictive covenants and events
of default.
When the €350.0 million Notes mature, we plan to repay the amount with available cash, borrowings under our $600.0
million revolving credit facility or a new borrowing. The credit terms, including interest rate and facility fees, of any
replacement borrowings will be dependent upon the condition of the credit markets at that time. We currently do not
anticipate any problems accessing the credit markets should we decide to replace the €350.0 million Notes.
The €350.0 million Notes have been designated as a hedge of our net investment in subsidiaries with a euro-functional
currency. Since our net investment in these subsidiaries exceeds the respective amount of the designated borrowings,
translation gains or losses related to these borrowings are included as a component of accumulated other comprehensive
(loss) income. (See Significant Matters Affecting Results of Operations and Notes 7 and 12 to the Consolidated Financial
Statements for further information.)
Revolving Credit Agreement
On October 15, 2013, we amended and restated our Five-Year Credit Agreement (“the Amended Agreement”) with a
syndicate of commercial banks. The Amended Agreement allows for borrowing of $600.0 million in various currencies, and
up to $150.0 million may be used for the issuance of stand-by letters of credit. The Amended Agreement terminates on
October 15, 2018 but permits the termination date of the facility to be extended by an additional year twice during the term
of the Amended Agreement. We had no borrowings under this facility as of December 31, 2014 or 2013. Outstanding letters
of credit issued under the Amended Agreement totaled $1.0 million and $0.9 million as of December 31, 2014 and 2013,
respectively. Additional borrowings of $599.0 million and $599.1 million were available to us under the facility as of December
31, 2014 and 2013, respectively.
Under the Amended Agreement, a credit ratings-based pricing grid determines the facility fee and the credit spread that we
add to the applicable interbank borrowing rate on all borrowings. At our current credit rating, the annual facility fee is 17.5
basis points paid on the entire $600.0 million facility and the credit spread is 107.5 basis points on any borrowings. A
downgrade from both credit rating agencies would unfavorably impact our facility fees and result in additional costs ranging
from approximately $0.3 million to $0.6 million annually.
The Amended Agreement contains customary restrictive covenants pertaining to our management and operations,
including limitations on the amount of subsidiary debt that we may incur and limitations on our ability to pledge assets, as
well as financial covenants requiring, among other things, that we comply with a leverage ratio (net Debt-to-EBITDA) of not
greater than 3.5 to 1 and a fixed charge coverage ratio of not less than 1.5 to 1. The Amended Agreement also contains
customary events of default, including, among others, payment defaults, material inaccuracy of representations and
warranties, covenant defaults, bankruptcy or involuntary proceedings, certain monetary and non-monetary judgments,
change of control and customary ERISA defaults.
Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations