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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 3, 2007, January 28, 2006 and January 29, 2005
(dollar amounts in thousands, except share data)
45
NOTE 2—DEBT AND FINANCING ARRANGEMENTS
LONG-TERM DEBT
February 3,
2007
January 28,
2006
7.50% Senior Subordinated Notes, due December 2014 . . . . . . . . . . . . . . . . . . . $200,000 $200,000
Senior Secured Term Loan, due October 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . 320,000 200,000
Medium-Term Notes, 6.4% to 6.52%, due July 2007 through
September2007.................................................... — 215
Othernotespayable,8.0%............................................. 268 1,315
Capitalleaseobligations,payablethroughOctober2009................... 685 829
Lineofcreditagreement,throughDecember2009........................ 17,568 66,137
538,521 468,496
Lesscurrentmaturities................................................ 3,490 1,257
Total Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $535,031 $467,239
On January 27, 2006 the Company entered into a $200,000 Senior Secured Term Loan facility due
January 27, 2011. This facility is secured by the real property and improvements associated with 154 of the
Company’s stores. Interest at the rate of London Interbank Offered Rate (LIBOR) plus 3.0% on this
facility was payable by the Company starting in February 2006. Proceeds from this facility were used to
satisfy and discharge the Company’s then outstanding $43,000 6.88% Medium Term Notes due March 6,
2006 and $100,000 6.92% Term Enhanced Remarketable Securities (TERMS) due July 7, 2016 and to
reduce borrowings under the Company’s line of credit by approximately $39,000.
On October 30, 2006, the Company amended and restated the Senior Secured Term Loan facility to
(i) increase the size from $200,000 to $320,000, (ii) extend the maturity from January 27, 2011 to
October 27, 2013, (iii) reduce the interest rate from LIBOR plus 3.00% to LIBOR plus 2.75%. An
additional 87 stores (bringing the total to 241 stores) were added to the collateral pool securing the facility.
Proceeds were used to satisfy and discharge $119,000 in outstanding 4.25% convertible Senior Notes due
June 1, 2007.
On February 15, 2007, the Company further amended the Senior Secured Term Loan facility to
reduce the interest rate from LIBOR plus 2.75% to LIBOR plus 2.00%.
The TERMS were retired on January 27, 2006 with proceeds from the Company’s Senior Secured
Term Loan facility. In retiring the TERMS, the Company was obligated to purchase a call option, which, if
exercised, would have allowed the securities to be remarketed through a maturity date of July 7, 2016. The
$8,100 redemption price of the call option was based upon the then present value of the remaining
payments on the TERMS through July 17, 2016, at 5.45%, discounted at the 10-year Treasury rate.
On December 14, 2004, the Company issued $200,000 aggregate principal amount of 7.5% Senior
Subordinated Notes due December 15, 2014.
On December 2, 2004, the Company further amended its amended and restated line of credit
agreement. The amendment increased the amount available for borrowings to $357,500, with an ability,
upon satisfaction of certain conditions, to increase such amount to $400,000. The amendment also reduced