WeightWatchers 2002 Annual Report Download - page 66

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
6. Long-Term Debt
December 28, 2002 December 29, 2001
Effective Effective
Balance rate Balance rate
EURO 100.0 million 13% Senior
Subordinated Notes due 2009 ........ $104,380 13.00% $ 88,380 13.00%
US $150.0 million 13% Senior
Subordinated Notes due 2009 ........ 150,000 13.00% 150,000 13.00%
Term A Loan due 2005 .............. 44,834 3.76% 63,639 6.95%
Term B Loan due 2007 .............. 97,618 4.46% 108,000 8.25%
Transferable Loan Certificate due 2007 . . 57,848 4.40% 64,000 8.25%
454,680 474,019
Less Current Portion ............... 18,361 15,699
$436,319 $458,320
In connection with the Transaction, the Company entered into the Credit Facility with The Bank of
Nova Scotia, Credit Suisse First Boston and certain other lenders providing (i) a $75,000 term loan A
facility (‘‘Term Loan A’’), (ii) a $75,000 term loan B facility (‘‘Term Loan B’’), (iii) an $87,000
transferable loan certificate (‘‘TLC’’) and (iv) a revolving credit facility with borrowings up to $30,000
(‘‘Revolving Credit Facility’’). The Credit Facility was amended and restated on January 16, 2001 to
provide for an additional $50,000 in borrowings in connection with the acquisition of Weighco (see
Note 3) as follows: (i) Term Loan A was increased by $15,000, (ii) the Revolving Credit Facility was
increased by $15,000 to $45,000 and (iii) a new $20,000 term loan D facility (‘‘Term Loan D’’). On
December 21, 2001, the Amended and Restated Credit Facility dated January 16, 2001 was refinanced
as follows: (i) Term Loan B, Term Loan D and the TLC in the amount of $71,000, $19,000 and
$82,000, respectively were repaid and replaced with a new Term Loan B of $108,000 and a new TLC of
$64,000. No additional borrowings were incurred. Borrowings under the Credit Facility are paid
quarterly and bear interest at a rate equal to LIBOR plus (a) in the case of Term Loan A and the
Revolving Credit Facility, 1.75% or, at the Company’s option, the alternate base rate, as defined, plus
0.75% and, (b) in the case of Term Loan B and the TLC, 2.50% or, at the Company’s option, the
alternate base rate plus 1.50%. At December 28, 2002, the interest rates were 3.15% for Term Loan A,
4.31% for Term Loan B, and 4.32% for the TLC. All assets of the Company collateralize the Credit
Facility.
In addition, as part of the Transaction, the Company issued $150,000 USD denominated and
100,000 EUR denominated principal amount of 13% Senior Subordinated Notes due 2009 (the
‘‘Notes’’) to qualified institutional buyers. At December 28, 2002 and December 29, 2001, the 100,000
EUR notes translated into $104,380 and $88,380 USD denominated equivalent, respectively. The
unrealized impact of the change in foreign exchange rates related to euro denominated debt is
reflected in other expenses (income), net. Interest is payable on the Notes semi-annually on April 1
and October 1 of each year. The Company uses interest rate swaps and foreign currency forward
contracts in association with its debt. As of December 28, 2002, 24% of the Company’s EUR 100,000
Senior Subordinated Notes are effectively hedged through the use of a cash flow hedge. The Notes are
uncollateralized senior subordinated obligations of the Company, subordinated in right of payment to
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