Rayovac 2014 Annual Report Download - page 107

SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
The Term Loan contains financial covenants with respect to debt, including, but not limited to, a fixed
charge ratio. In addition, the Term Loan contains customary restrictive covenants, including, but not limited to,
restrictions on the Company’s ability to incur additional indebtedness, create liens, make investments or specified
payments, give guarantees, pay dividends, make capital expenditures and merge or acquire or sell assets.
Pursuant to a guarantee and collateral agreement, the Company, its domestic subsidiaries and its Canadian
subsidiaries have guaranteed their respective obligations under the Term Loan and related loan documents and
have pledged substantially all of their respective assets to secure such obligations. The Term Loan also provides
for customary events of default, including payment defaults and cross-defaults on other material indebtedness.
6.375% Notes and 6.625% Notes
On December 17, 2012, in connection with the acquisition of the HHI Business, the Company assumed
$520,000 aggregate principal amount of 6.375% Notes at par value, due November 15, 2020 (the “6.375%
Notes”), and $570,000 aggregate principal amount of 6.625% Notes at par value, due November 15, 2022 (the
“6.625% Notes”), previously issued by Spectrum Brands Escrow Corporation. The 6.375% Notes and the
6.625% Notes are unsecured and guaranteed by Spectrum Brands’ parent company, SB/RH Holdings, LLC, as
well as by existing and future domestic restricted subsidiaries.
The Company may redeem all or a part of the 6.375% Notes and the 6.625% Notes, upon not less than 30 or
more than a 60 day notice, at specified redemption prices. Further, the indenture governing the 6.375% Notes and
the 6.625% Notes (the “2020/22 Indenture”) requires the Company to make an offer, in cash, to repurchase all or
a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium,
upon the occurrence of a change of control of the Company, as defined in such indenture.
The 2020/22 Indenture contains customary covenants that limit, among other things, the incurrence of
additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of
certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with
another company, transfer or sale of all or substantially all assets, and transactions with affiliates.
In addition, the 2020/22 Indenture provides for customary events of default, including failure to make
required payments, failure to comply with certain agreements or covenants, failure to make payments when due
or on acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. Events of
default under the 2020/22 Indenture arising from certain events of bankruptcy or insolvency will automatically
cause the acceleration of the amounts due under the 6.375% Notes and the 6.625% Notes. If any other event of
default under the 2020/22 Indenture occurs and is continuing, the trustee for the 2020/22 Indenture or the
registered holders of at least 25% in the then aggregate outstanding principal amount of the 6.375% Notes, or the
6.625% Notes, may declare the acceleration of the amounts due under those notes.
The Company recorded $12,906 and $14,127 of fees in connection with the offering of the 6.375% Notes
and the 6.625% Notes, respectively, during Fiscal 2013. The fees are classified as Debt issuance costs within the
accompanying Consolidated Statements of Financial Position and are being amortized as an adjustment to
interest expense over the respective remaining lives of the 6.375% Notes and the 6.625% Notes.
In connection with the registration of the 6.375% Notes and the 6.625% Notes that were assumed on
December 17, 2012 to finance the acquisition of the HHI Business, the Company recorded $261 of fees during
Fiscal 2014. The $261 was classified as Debt issuance costs within the accompanying Consolidated Statements
of Financial Position and is being amortized as an adjustment to interest expense over the remaining life of the
6.375% Notes and the 6.625% Notes.
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