Rayovac 2015 Annual Report Download - page 134

SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
security agreement, SBI and such subsidiary guarantors have pledged substantially all of their respective assets to
secure such obligations and, in addition, SB/RH has pledged the capital stock of SBI to secure such obligations.
The Senior Credit Agreement also provides for customary events of default including payment defaults and
cross-defaults to other material indebtedness.
The Term Loans were issued net of a $5.1 million discount, which is amortized with a corresponding charge
to interest expense over the remaining life of the loans. The Company incurred $18.5 million of debt issuance
costs of which $8.1 million was capitalized as debt issuance costs and the remainder of $10.4 million was
recognized as interest expense during the year ended September 30, 2015. The Company recognized accelerated
amortization of portions of the unamortized discount and unamortized debt issuance costs related to the then-
existing Term Loans of $7.7 million.
In connection with the new Revolver Facility, the Company incurred $5.7 million of fees that were
capitalized as debt issuance costs and are being amortized over the remaining life of the Revolver Facility. The
Company recorded accelerated amortization of portions of the unamortized debt issuance costs related to the
refinancing of the previous revolver facility totaling $1.1 million as an increase to interest expense during the
year ended September 30, 2015. As of September 30, 2015, the Company had aggregate borrowing availability
of $467.3 million, net of outstanding letters of credit of $32.7 million.
5.75% Notes
On May 20, 2015, in connection with the acquisition of the AAG Business, SBI issued $1,000 million
aggregate principal amount of 5.75% Notes at par value, due July 15, 2025 (the “5.75% Notes”). The 5.75%
Notes are guaranteed by SB/RH as well as by SBI’s existing and future domestic subsidiaries.
SBI may redeem all or a part of the 5.75% Notes, at any time on or after July 15, 2020, at specified
redemption prices. In addition, prior to July 15, 2020, SBI may redeem the notes at a redemption price equal to
100% of the principal amount plus a “make-whole” premium. SBI is also entitled to redeem up to 35% of the
aggregate principal amount of the notes before July 15, 2018 with an amount of cash equal to the net proceeds
that SBI raises in equity offerings at specified redemption prices. Further, the indenture governing the 5.75%
Notes (the “2025 Indenture”) requires SBI 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 SBI, as defined in the 2025 Indenture.
The 2025 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 2025 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 2025 Indenture arising from certain events of bankruptcy or insolvency will automatically cause the
acceleration of the amounts due under the 5.75% Notes. If any other event of default under the 2025 Indenture
occurs and is continuing, the trustee for the 2025 Indenture or the registered holders of at least 25% in the then
aggregate outstanding principal amount of the 5.75% Notes, may declare the acceleration of the amounts due
under those notes.
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