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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The 2011 and 2012 Notes
On December 21, 2009, the Company completed the issuance of $850 million aggregate principal amount of senior
unsecured notes consisting of $400 million of 1.70% senior notes (the “2011 Notes”) and $450 million of 2.35% senior notes
(the “2012 Notes”) due December 21, 2011 and December 21, 2012, respectively. The net proceeds from the sale of the
debentures were used for repayment of existing indebtedness under the Term Loan A facility.
The Company utilizes an interest rate swap designated as a fair value hedge, effective December 21, 2009, to convert fixed
interest rates to variable rates. See Note 10 for further information regarding derivatives.
The 2013, 2018 and 2038 Notes
On April 30, 2008, the Company completed the issuance of $1,700 million aggregate principal amount of senior unsecured
notes consisting of $250 million aggregate principal amount of 6.12% senior notes due May 1, 2013 (the “2013 Notes”), $1,200
million aggregate principal amount of 6.82% senior notes due May 1, 2018 (the “2018 Notes”), and $250 million aggregate
principal amount of 7.45% senior notes due May 1, 2038 (the “2038 Notes”).
In December 2010, the Company completed a tender offer for a portion of the 2018 Notes and retired, at a premium, an
aggregate principal amount of approximately $476 million. The loss on early extinguishment of the 2018 Notes was $100
million. The aggregate principal amount of the outstanding 2018 Notes was $724 million as of December 31, 2010.
The Company utilizes an interest rate swap designated as a fair value hedge, effective December 7, 2010, to convert fixed
interest rates to variable rates. See Note 10 for further information regarding derivatives.
Senior Unsecured Credit Facility
The Company’s senior unsecured credit agreement, which was amended and restated on April 11, 2008, (the "senior
unsecured credit facility") provided senior unsecured financing consisting of the Term Loan A facility (the "Term Loan A")
with an aggregate principal amount of $2,200 million and a term of five years, which was fully repaid in December 2009 prior
to its maturity and terminated. In addition, the Company's senior unsecured credit facility provides for the revolving credit
facility (the "Revolver") in an aggregate principal amount of $500 million with a maturity in 2013. The balance of principal
borrowings under the Revolver was $0 and $405 million as of December 31, 2010 and 2009, respectively. Up to $75 million of
the Revolver is available for the issuance of letters of credit, of which $12 million and $41 million was utilized as of
December 31, 2010 and 2009, respectively. Balances available for additional borrowings and letters of credit were $488 million
and $63 million, respectively, as of December 31, 2010.
Borrowings under the senior unsecured credit facility bear interest at a floating rate per annum based upon the London
interbank offered rate for dollars (“LIBOR”) or the alternate base rate (“ABR”), in each case plus an applicable margin which
varies based upon the Company’s debt ratings, from 1.00% to 2.50%, in the case of LIBOR loans and 0.00% to 1.50% in the
case of ABR loans. The alternate base rate means the greater of (a) JPMorgan Chase Bank’s prime rate and (b) the federal funds
effective rate plus 0.50%. Interest is payable on the last day of the interest period, but not less than quarterly, in the case of any
LIBOR loan and on the last day of March, June, September and December of each year in the case of any ABR loan. The
average interest rate for borrowings during the years ended December 31, 2010 and 2009 was 2.25% and 4.90%, respectively.
In December 2009, the Company fully repaid the Term Loan A prior to its maturity and wrote off $30 million of the
associated debt issuance costs.
The Company utilized interest rate swaps to convert variable interest rates to fixed rates. See Note 10 for further
information regarding derivatives.
An unused commitment fee is payable quarterly to the lenders on the unused portion of the commitments in respect of the
Revolver equal to 0.15% to 0.50% per annum, depending upon the Company’s debt ratings. The Company incurred $1 million
in unused commitment fees in each year ended December 31, 2010 and 2009.
Principal amounts outstanding under the Revolver are due and payable in full at maturity.
All obligations under the senior unsecured credit facility are guaranteed by substantially all of the Company’s existing and
future direct and indirect domestic subsidiaries.
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