Rayovac 2010 Annual Report Download - page 147

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
In connection with the Merger, the Company obtained the consent of the note holders to certain amendments
to the 2019 Indenture (the “Supplemental Indenture”). The Supplemental Indenture became effective upon the
closing of the Merger. Among other things, the Supplemental Indenture amended the definition of change in
control to exclude the Harbinger Capital Partners Master Fund I, Ltd. (“Harbinger Master Fund”) and Harbinger
Capital Partners Special Situations Fund, L.P. (“Harbinger Special Fund”) and, together with Harbinger Master
Fund, the “HCP Funds”) and Global Opportunities Breakaway Ltd. (together with the HCP Funds, the
“Harbinger Parties”) and increased the Company’s ability to incur indebtedness up to $1,850,000.
During Fiscal 2010 the Company recorded $2,966 of fees in connection with the consent. The fees are
classified as Debt issuance costs within the accompanying Consolidated Statement of Financial Position as of
September 30, 2010 and will be amortized as an adjustment to interest expense over the remaining life of the
12% Notes effective with the closing of the Merger.
ABL Revolving Credit Facility
The ABL Revolving Credit Facility is governed by a credit agreement (the “ABL Credit Agreement”) with Bank
of America as administrative agent (the “Agent”). The ABL Revolving Credit Facility consists of revolving loans
(the “Revolving Loans”), with a portion available for letters of credit and a portion available as swing line loans,
in each case subject to the terms and limits described therein.
The Revolving Loans may be drawn, repaid and reborrowed without premium or penalty. The proceeds of
borrowings under the ABL Revolving Credit Facility are to be used for costs, expenses and fees in connection
with the ABL Revolving Credit Facility, for working capital requirements of the Company and its subsidiaries’,
restructuring costs, and other general corporate purposes.
The ABL Revolving Credit Facility carries an interest rate, at the Company’s option, which is subject to
change based on availability under the facility, of either: (a) the base rate plus currently 2.75% per annum or
(b) the reserve-adjusted LIBOR rate (the “Eurodollar Rate”) plus currently 3.75% per annum. No amortization
will be required with respect to the ABL Revolving Credit Facility. The ABL Revolving Credit Facility will
mature on June 16, 2014. Pursuant to the credit and security agreement, the obligations under the ABL credit
agreement are secured by certain current assets of the guarantors, including, but not limited to, deposit accounts,
trade receivables and inventory.
The ABL Credit Agreement contains various representations and warranties and covenants, including,
without limitation, enhanced collateral reporting, and a maximum fixed charge coverage ratio. The ABL Credit
Agreement also provides for customary events of default, including payment defaults and cross-defaults on other
material indebtedness.
During Fiscal 2010 the Company recorded $9,839 of fees in connection with the ABL Revolving Credit
Facility. The fees are classified as Debt issuance costs within the accompanying Consolidated Statement of
Financial Position as of September 30, 2010 and will be amortized as an adjustment to interest expense over the
remaining life of the ABL Revolving Credit Facility.
As a result of borrowings and payments under the ABL Revolving Credit Facility at September 30, 2010,
the Company had aggregate borrowing availability of approximately $225,255, net of lender reserves of $28,972.
At September 30, 2010, the Company had outstanding letters of credit of $36,969 under the ABL Revolving
Credit Facility.
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