NetSpend 2011 Annual Report Download - page 87

Table of Contents
NetSpend Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2011, 2010 and 2009
NOTE 10: DEBT (Continued)
Amounts borrowed under the current credit facility may be used for working capital, capital expenditures, acquisitions and other general
corporate purposes. This facility has a maturity date of September 2015 and provides for a $5.0 million swingline facility and commitments for
up to $15.0 million in letters of credit. At the Company's option, the Company may prepay any borrowings in whole or in part, without any
prepayment penalty or premium.
The outstanding borrowings under the current credit facility bear interest, at the Company's election, as either base rate or Eurodollar
loans. Base rate loans bear annual interest at the base rate (the greater of the federal funds rate plus 0.50%, the prime rate or one-month LIBOR
plus 1.00%) plus a spread of 1.50% to 2.25%, depending on the Company's leverage ratio. Eurodollar loans bear interest at the adjusted LIBOR
for the interest period in effect for such borrowings plus a spread of 2.50% to 3.25%, depending on the Company's leverage ratio. The
Company's interest rate on Eurodollar loans, which comprised all of the Company's outstanding borrowings as of December 31, 2011, was
2.8% as of that date.
The current credit facility contains certain financial and non-
financial covenants and requirements, including a leverage ratio, fixed charge
ratio and certain restrictions on the Company's ability to make investments, pay dividends or sell assets. It also provides for customary events
of default, including failure to pay any principal or interest when due, failure to comply with the covenants set forth in the credit agreement and
certain changes in control. The Company was in compliance with these covenants as of December 31, 2011.
Under the current credit facility, letters of credit may be issued for a period of up to one year (subject to any automatic renewal
provisions), although all such letters of credit must expire at least ten business days prior to the current credit facility's maturity date. The
Company pays a participation fee with respect to each issued letter of credit. This fee accrues at the rate of 2.5% per annum on the average
daily amount of the letters of credit outstanding. The Company also pays a fronting fee of 0.25% per annum on the average daily amount of
outstanding letter of credit exposure from the issue date to the date on which there ceases to be any letter of credit exposure, as well as the
issuing bank's standard fees. Participation fees and fronting fees are payable in arrears on the last day of each calendar quarter. During the year
ended December 31, 2011, the Company paid less than $0.1 million in participation or fronting fees. The Company did not pay any
participation or fronting fees during the year ended December 31, 2010.
The terms of the current credit facility require the Company to pay a commitment fee based on its average daily unused amount. This fee
accrues at a rate of 0.45% to 0.50% per annum, depending on the Company's leverage ratio and is payable in arrears on the last day of each
calendar quarter. During the years ended December 31, 2011 and 2010, the Company paid $0.3 and $0.1 million, respectively, in commitment
fees.
As of December 31, 2011, the aggregate amount outstanding under the Company's revolving credit facility was $58.5 million and the
Company had $6.2 million in letters of credit outstanding. As of December 31, 2011, the Company had $8.8 million of unused letters of credit.
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