Staples 2006 Annual Report Download - page 116

STAPLES, INC. AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Continued)
C-12
NOTE D Debt and Credit Agreements (Continued)
Notes: On September 30, 2002, Staples issued $325 million principal amount of senior notes due October 1, 2012
(the “Notes”), with a fixed interest rate of 7.375% payable semi-annually on April 1 and October 1 of each year
commencing on April 1, 2003. Staples has entered into an interest rate swap agreement to turn the Notes into variable
rate obligations (see Note E).
Senior Notes: On August 12, 1997, Staples issued $200 million principal amount of senior notes due August 15,
2007 (the “Senior Notes”), with a fixed interest rate of 7.125% payable semi-annually on February 15 and August 15 of
each year commencing on February 15, 1998. Staples has entered into interest rate swap agreements to turn the Senior
Notes into variable rate obligations (see Note E).
Credit Agreements: On October 13, 2006, Staples entered into an Amended and Restated Revolving Credit
Agreement (the “Agreement”) with Bank of America, N.A and other lending institutions. The Agreement amends and
restates the Revolving Credit Agreement dated as of December 14, 2004, which provided for a maximum borrowing of
$750.0 million and was due to expire in December 2009 (the “Prior Agreement”).
The Agreement provides for a maximum borrowing of $750.0 million which, upon approval of the lenders, Staples
may increase to $1.0 billion, and expires on October 13, 2011. Borrowings made pursuant to the Agreement may be
syndicated loans, competitive bid loans, or swing line loans, the combined sum of which may not exceed the maximum
borrowing amount. Amounts borrowed under the Agreement may be borrowed, repaid and reborrowed from time to
time until October 13, 2011.
Borrowings made pursuant to the Agreement as syndicated loans will bear interest, payable quarterly or, if earlier,
at the end of any interest period, at either (a) the base rate, described in the Agreement as the higher of the annual rate
of the lead bank’s prime rate or the federal funds rate plus 0.50%, or (b) the Eurocurrency rate (a publicly published
rate) plus a percentage spread based on our credit rating and fixed charge coverage ratio. Borrowings made as
competitive bid loans bear the competitive bid rate as specified in the applicable competitive bid. Swing line loans bear
interest that is the lesser of the base rate or the swing line rate as quoted by the administrative agent under the terms of
the Agreement. Under the Agreement, Staples agrees to pay a facility fee, payable quarterly, at rates that range from
0.060% to 0.125% depending on the Company’s credit rating and fixed charge coverage ratio, and when applicable, a
utilization fee. The payments under this Agreement are guaranteed by the same subsidiaries that guarantee the
Company’s publicly issued notes (See Note L).
Euro Notes: Staples issued notes in the aggregate principal amount of 150 million Euros on November 15, 1999
(the “Euro Notes”). These notes came due on November 15, 2004 and were repaid in full on this date. Prior to their
repayment, these notes were designated as a foreign currency hedge on the Company’s net investments in Euro
denominated subsidiaries and gains or losses were recorded in the cumulative translation adjustment line in
Stockholders’ Equity.
Staples had available $132.6 million available under lines of credit, which had an outstanding balance of $0.2 million
at February 3, 2007, with $0.6 million of letters of credit issued under the facilities.