Snapple 2014 Annual Report Download - page 74

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
71
The 2016 Notes
On January 11, 2011, the Company completed the issuance of $500 million aggregate principal amount of the 2016 Notes at
a discount of $1 million. The net proceeds from the issuance were used to replace a portion of the cash used to purchase the 2018
Notes tendered pursuant to the tender offer described below.
The 2018 and 2038 Notes
On April 30, 2008, the Company completed the issuance of two tranches of senior unsecured notes consisting of $1,200 million
aggregate principal amount of the 2018 Notes and $250 million aggregate principal amount of 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 aggregate principal amount of the outstanding 2018 Notes was
$724 million as of December 31, 2014 and 2013.
BORROWING ARRANGEMENTS
Commercial Paper Program
On December 10, 2010, the Company entered into a commercial paper program under which the Company may issue unsecured
commercial paper notes (the "Commercial Paper") on a private placement basis up to a maximum aggregate amount outstanding
at any time of $500 million. The program is supported by the Revolver, which is discussed below. Outstanding Commercial Paper
reduces the amount of borrowing capacity available under the Revolver and outstanding amounts under the Revolver reduce the
Commercial Paper availability. As of December 31, 2014, the Company had no outstanding Commercial Paper. As of December 31,
2013, the Company had outstanding Commercial Paper of $65 million with maturities of 90 days or less with a weighted average
interest rate of 0.26%.
Unsecured Credit Agreement
On September 25, 2012, the Company entered into a five-year unsecured credit agreement (the "Credit Agreement"), which
provides for a $500 million revolving line of credit (the "Revolver"). Borrowings under the Revolver bear interest at a floating
rate per annum based upon the alternate base rate ("ABR") or the Eurodollar rate, in each case plus an applicable margin which
varies based upon the Company's debt ratings. Rates range from 0.000% to 0.300% for ABR loans and from 0.795% to 1.300%
for Eurodollar loans. The ABR is defined as the greater of (a) JPMorgan Chase Bank's prime rate, (b) the federal funds effective
rate plus 0.500% and (c) the adjusted LIBOR for a one month interest period. The adjusted LIBOR is the London interbank offered
rate for dollars adjusted for a statutory reserve rate set by the Board of Governors of the Federal Reserve System of the United
States of America.
Additionally, the Revolver is available for the issuance of letters of credit and swingline advances not to exceed $75 million
and $50 million, respectively. Swingline advances will accrue interest at a rate equal to the ABR plus the applicable margin. Letters
of credit and swingline advances will reduce, on a dollar for dollar basis, the amount available under the Revolver.
The Credit Agreement further provides that the Company may request at any time, subject to the satisfaction of certain
conditions, that the aggregate commitments under the facility be increased by a total amount not to exceed $250 million.
The Credit Agreement's representations, warranties, covenants and events of default are generally customary for investment
grade credit and include a covenant that requires the Company to maintain a ratio of consolidated total debt (as defined in the
Credit Agreement) to annualized consolidated EBITDA (as defined in the Credit Agreement) of no more than 3.00 to 1.00, tested
quarterly. Upon the occurrence of an event of default, among other things, amounts outstanding under the Credit Agreement may
be accelerated and the commitments may be terminated. The Company's obligations under the Credit Agreement are guaranteed
by certain of the Company's direct and indirect domestic subsidiaries on the terms set forth in the Credit Agreement. The Credit
Agreement has a maturity date of September 25, 2017; however, with the consent of lenders holding more than 50% of the total
commitments under the Credit Agreement and subject to the satisfaction of certain conditions, the Company may extend the
maturity date for up to two additional one-year terms.