Rayovac 2004 Annual Report Download - page 83

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RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
(A) Interest rates on senior credit facilities represent the weighted average rates on balances outstanding.
The Company’s Senior Credit Facilities include a term loan of $257,000, the “Term C loan facility”; a Euro
denominated term loan of €114,000 ($141,845 at September 30, 2004), the “Euro term C loan facility”; a
revolving credit facility of $120,000, the “Revolving credit facility”; and a Euro denominated revolving credit
facility of €40,000 ($49,770 at September 30, 2004), the “Euro revolving credit facility”.
As of September 30, 2004, the following amounts were outstanding under these facilities: $257,000 under
the Term C loan facility, $141,845 under the Euro term C loan facility, and $37,000 under the Revolving credit
facility. No borrowings were outstanding under the Euro revolving credit facility. In addition, approximately
$21,000 of the remaining availability under the Revolving credit facility was utilized for outstanding letters of
credit. Approximately $112,000 remains available under these facilities as of September 30, 2004.
The interest on dollar-denominated borrowings is computed, at the Company’s option, based on the base
rate, as defined (“Base Rate”), or the London Interbank Offered Rate (“LIBOR”) for Dollar-denominated
deposits. The interest on Euro-denominated borrowings is computed on LIBOR for Euro-denominated deposits.
The fees associated with these facilities were capitalized and are being amortized over the term of the facilities.
During 2004, the Company redeemed the remaining $56,000 of Series B and D Senior Subordinated
Debentures assumed in connection with the acquisition of Remington. The notes were redeemed with the cash
remaining following the Company’s debt offering of the $350,000 8.5% Senior Subordinated Notes. The
Company also made net payments of $60,000, which represented gross payments of $256,700 offset by
borrowings of $196,700, on the Term B loan facility (which was subsequently refinanced and is now reflected as
the Term C loan facility) using a combination of cash remaining following the debt offering of the Senior
Subordinated Notes and cash generated from operating activities. In addition, the Company made payments of
$58,700 on the Euro term A and B Loan facilities (which were subsequently refinanced and are now reflected as
the Euro term C loan facility) using cash generated from its operating activities. Additional payments of
approximately $20,400 were made in connection with other senior debt and capitalized lease obligations.
Also during this period, the Company borrowed approximately $44,800 under its Revolving credit facility
primarily for the acquisitions of Ningbo and Microlite. See Acquisitions, Note 16, for further information on
these acquisitions. The remaining increase in indebtedness for the period of $36,400 is primarily related to debt
acquired with the aforementioned acquisitions and unfavorable foreign exchange.
The Company is required to pay a commitment fee of 0.50% per annum on the average daily-unused portion
of the Revolving credit facility and the Euro revolving credit facility. A quarterly fee is payable on outstanding
letters of credit (3.5% per annum at September 30, 2004). The Company also incurs a fee of 0.25% per annum of
the average daily maximum amount available to be drawn on each letter of credit issued. The margin on the
revolving facilities and fees on outstanding letters of credit may be adjusted if the Company’s leverage ratio, as
defined, increases or decreases.
In addition to principal payments, the Company has annual interest payment obligations of approximately
$30,000 associated with its debt offering of the $350,000 8.5% Senior Subordinated Notes due in 2013. The
Company also incurs interest on its borrowings associated with the Senior Credit Facilities, and such interest
would increase borrowings under the Revolving credit facilities if cash were not otherwise available for such
payments. Based on amounts currently outstanding under the Senior Credit Facilities, and using market interest
rates and foreign exchange rates in effect as of September 30, 2004, the Company estimates annual interest
payments of approximately $20,000 would be required assuming no further principal payments were to occur and
excluding any payments associated with outstanding interest rate swaps.
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