OfficeMax 2010 Annual Report Download - page 48

Agreement up to a maximum of $250 million, reduce available borrowing capacity. Stand-by letters of credit
issued under the U.S. Credit Agreement totaled $56.1 million at the end of fiscal year 2010. At the end of fiscal
year 2010, the maximum aggregate borrowing amount available under the U.S. Credit Agreement was
$528.3 million and availability under the U.S. Credit Agreement totaled $472.2 million. The U.S. Credit
Agreement allows the payment of dividends, subject to availability restrictions and if no default has occurred. At
the end of fiscal year 2010, we were in compliance with all material covenants under the U.S. Credit Agreement.
The U.S. Credit Agreement expires on July 12, 2012.
For all years presented, borrowings under the U.S. Credit Agreement were subject to interest at rates based
on either the prime rate or the London Interbank Offered Rate (“LIBOR”). Margins were applied to the
applicable borrowing rates and letter of credit fees under the U.S. Credit Agreement depending on the level of
average availability. Fees on letters of credit issued under the U.S. Credit Agreement were charged at a weighted
average rate of 0.875%. We were charged an unused line fee at an annual rate of 0.25% on the amount by which
the maximum available credit exceeded the average daily outstanding borrowings and letters of credit.
On September 30, 2009, Grand & Toy Limited, the Company’s wholly owned subsidiary based in Canada,
entered into a Loan and Security Agreement (the “Canadian Credit Agreement”) with a group of banks. The
Canadian Credit Agreement permits Grand & Toy Limited to borrow up to a maximum of C$60 million subject
to a borrowing base calculation that limits availability to a percentage of eligible accounts receivable plus a
percentage of the value of eligible inventory less certain reserves. The Canadian Credit Agreement may be
increased (up to a maximum of C$80 million) at Grand & Toy Limited’s request or reduced from time to time, in
each case according to the terms detailed in the Canadian Credit Agreement. There were no borrowings
outstanding under the facility at the end of fiscal year 2010, and there were no borrowings outstanding under this
facility during 2010 or 2009. Letters of credit, which may be issued under the Canadian Credit Agreement up to a
maximum of C$10 million, reduce available borrowing capacity. There were no letters of credit outstanding
under the Canadian Credit Agreement at the end of fiscal year 2010. The maximum aggregate borrowing amount
available under the Canadian Credit Agreement was $49.2 million (C$49.1 million) at the end of fiscal year
2010. Grand & Toy Limited was in compliance with all material covenants under the Canadian Credit Agreement
at the end of fiscal year 2010. The Canadian Credit Agreement expires on July 12, 2012.
On March 15, 2010, the Company’s five wholly-owned subsidiaries based in Australia and New Zealand
(the “Australasian subsidiaries”) entered into a Facility Agreement (the “Australasian Credit Agreement”) with a
financial institution based in those countries. The Australasian Credit Agreement permits the Australasian
subsidiaries to borrow up to a maximum of A$80 million subject to a borrowing base calculation that limits
availability to a percentage of eligible accounts receivable plus a percentage of the value of certain owned
properties, less certain reserves. There were no borrowings outstanding under the facility at the end of fiscal year
2010, and there were no borrowings outstanding under this facility during 2010. The maximum aggregate
borrowing amount available under the Australasian Credit Agreement was $55.0 million (A$54.1 million) at the
end of fiscal year 2010. At the end of fiscal year 2010, the Australasian subsidiaries were in compliance with all
material covenants under the Australasian Credit Agreement. The Australasian Credit Agreement expires on
March 15, 2013.
Timber Notes/Non-recourse debt
In October 2004, we sold our timberland assets in exchange for $15 million in cash plus credit-enhanced
timber installment notes in the amount of $1,635 million (the “Installment Notes”). The Installment Notes were
issued by single-member limited liability companies formed by affiliates of Boise Cascade, L.L.C (the “Note
Issuers”). In order to support the Installment Notes, the Note Issuers transferred $1,635 million in cash to
Lehman and Wachovia Corporation (“Wachovia”) ($817.5 million to each of Lehman and Wachovia) who issued
collateral notes to the Note Issuers and guarantees on the performance of the Installment Notes. In December
2004, we completed a securitization transaction in which the Company’s interests in the Installment Notes and
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