MoneyGram 2009 Annual Report Download - page 48

Table of Contents
Tranche B. We continue to evaluate further reductions of our outstanding debt ahead of scheduled maturities. Following is a summary of
our outstanding debt at December 31:
Table 9 — Schedule of Credit Facilities
Interest Rate Facility Outstanding 2010
(Amounts in thousands) for 2009 Size 2009 2008 Interest (1)
Tranche A, due 2013 5.75% $ 100,000 $ 100,000 $ 100,000 $ 5,750
Tranche B, net of unamortized discount, due 2013 7.25% 250,000 196,791 233,881 14,953
Revolving credit facility, due 2013 5.75% 250,000 — 145,000 —
First lien senior secured debt 600,000 296,791 478,881 20,703
Second lien notes, due 2018 13.25% 500,000 500,000 500,000 66,250
Total debt $ 1,100,000 $ 796,791 $ 978,881 $ 86,953
(1) Reflects the interest that will be paid in 2010 using the rates in effect on December 31, 2009, assuming no prepayments of principal
and the continued payment of interest on the Notes.
The revolving credit facility has $234.5 million of borrowing capacity as of December 31, 2009, reflecting $15.5 million of standby
letters of credit issued under the facility. Amounts outstanding under the revolving credit facility and Tranche A are due upon maturity in
2013. As a result of the $40.0 million prepayment of Tranche B in December 2009, no principal payments are due on Tranche B until
maturity in 2013. We may elect an interest rate for the Senior Facility at each reset period based on either the United States prime bank
rate or the Eurodollar rate, with a minimum rate of 250 basis points set for the Eurodollar option. The interest rate election may be made
individually for each term loan and each draw under the revolving credit facility. For the revolving credit facility and Tranche A, the
interest rate is either the United States prime bank rate plus 250 basis points or the Eurodollar rate plus 350 basis points. In addition, we
incur fees of 50 basis points on the daily unused availability under the revolving credit facility. The interest rate for Tranche B can be set
at either the United States prime bank rate plus 400 basis points or the Eurodollar rate plus 500 basis points. Through 2009 and as of the
date of this filing, our interest rates have been set based on the United States prime bank rate.
The Notes mature in 2018, with principal due in full at that time. The interest rate on the Notes is 13.25 percent per year. Prior to
March 25, 2011, we have the option to capitalize interest at a rate of 15.25 percent. If interest is capitalized, 0.50 percent of the interest is
payable in cash and 14.75 percent is capitalized into the outstanding principal balance. We elected to pay the interest through
December 31, 2009, and we anticipate that we will continue to pay the interest on the Notes for the foreseeable future.
Our borrowing facilities contain various financial and non-financial covenants. A violation of these covenants could negatively impact
our liquidity by restricting our ability to borrow under the revolving credit facility and/or causing acceleration of amounts due under the
credit facilities. The financial covenants in our credit facilities measure leverage, interest coverage and liquidity. Leverage is measured
through a senior secured debt ratio calculated as consolidated indebtedness to consolidated earnings before interest, taxes, depreciation
and amortization ("EBITDA"), adjusted for certain items such as net securities gains (losses), stock-based compensation expense, certain
legal settlements and asset impairments, among other items ("adjusted EBITDA"). Interest coverage is calculated as adjusted EBITDA to
net cash interest expense. Liquidity is measured as assets in excess of payment service obligations, as shown in Table 8, adjusted for
various exclusions. We are in compliance with all financial covenants as of December 31, 2009.
The terms of our credit facilities also place restrictions on certain types of payments we may make, including dividends, acquisitions, and
the funding of foreign subsidiaries, among others. We do not anticipate these restrictions to limit our ability to grow the business either
domestically or internationally. In addition, we may only make dividend payments to common stockholders subject to an incremental
build-up based on our
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