Sally Beauty Supply 2011 Annual Report Download - page 127

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Sally Beauty Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
Fiscal Years ended September 30, 2011, 2010 and 2009
14. Short-term Borrowings and Long-Term Debt
Details of long-term debt are as follows (in thousands):
September 30,
2011 Maturity Dates Interest Rates
ABL facility .......... $ — Nov. 2015 (i) Prime plus (1.25% to 1.75%) or;
(ii) LIBOR(a) plus (2.25% to 2.75%)
Term loan B .......... 696,856 Nov. 2013 (i) Prime plus (1.25% to 1.50%) or;
(ii) LIBOR(a) plus (2.25% to 2.50%)(b)
Other(c) ............. 4,774 2012-2015 4.05% to 7.00%
Total .............. $ 701,630
Senior notes .......... $ 430,000 Nov. 2014 9.25%
Senior subordinated notes 275,000 Nov. 2016 10.50%
Total .............. $ 705,000
Capitalized lease
obligations ......... $ 6,485
Less: current portion .... (3,004)
Total long-term debt . . $1,410,111
(a) London Interbank Offered Rate (‘‘LIBOR’’).
(b) At September 30, 2011, the contractual interest rate for the term loan B facility was 2.49%. The
interest rate on $300.0 million of principal outstanding under this loan is fixed by interest rate swaps
which expire in May 2012.
(c) Represents pre-acquisition debt of Pro-Duo NV and Sinelco.
In connection with the Separation Transactions in November 2006, the Company, through its subsidiaries
(Sally Investment Holdings LLC and Sally Holdings) incurred $1,850.0 million of indebtedness by:
(i) drawing on a $400.0 million revolving, asset-based lending (‘‘ABL’’) facility in the amount of
$70.0 million; (ii) entering into two senior term loan facilities (term loans A and B) in an aggregate amount
of $1,070.0 million; and (iii) together (jointly and severally) with another of the Company’s indirect
subsidiaries, Sally Capital Inc., issuing senior notes in an aggregate amount of $430.0 million and senior
subordinated notes in an aggregate amount of $280.0 million. The Company incurred approximately
$58.5 million in costs related to the issuance of the debt, which were capitalized and are being amortized to
interest expense over the life of the related debt obligations. Borrowings under the term loan A facility
were paid in full in the fiscal year 2010.
In November 2010, the Company entered into a new $400 million, five-year revolving credit facility (the
‘‘new ABL credit facility’’ or the ‘‘ABL credit facility’’) and replaced its prior ABL credit facility (the ‘‘prior
ABL credit facility’’). The ABL credit facility provides for senior secured revolving loans up to a maximum
aggregate principal amount of $400.0 million, subject to borrowing base limitations. The availability of
funds under the ABL credit facility is subject to a borrowing base calculation, which is based on specified
percentages of the value of eligible inventory and eligible accounts receivables, subject to certain reserves
and other adjustments and reduced by certain outstanding letters of credit. At September 30, 2011, the
Company had $366.5 million available for borrowing under the ABL credit facility. The terms of the new
ABL credit facility contain a commitment fee of 0.50% on the unused portion of the facility. In connection
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