WeightWatchers 2005 Annual Report Download - page 96

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
from $45,000 to $350,000. At December 31, 2005, WWI had $112,200 of availability under the
Revolver.
Due to the early extinguishment of the Term Loans resulting from the January 21, 2004
refinancing, the Company recognized expenses of $3,254 for the three months ended April 3, 2004,
which included the write-off of unamortized debt issuance costs of $2,933 and $321 of fees associated
with the transaction.
On October 1, 2004, the Company repurchased and retired the remaining balance of its 13%
Senior Subordinated Notes in the amounts of $5,100 USD denominated and A8,400 euro-denominated.
Due to this early extinguishment of debt, the Company recognized expenses of $1,010 in the quarter
ended October 2, 2004 related to redemption premiums associated with this redemption.
On October 19, 2004, WWI supplemented its net borrowing capacity by adding an Additional Term
Loan B to its existing Credit Facility in the amount of $150,000. Coterminous with the previously
existing Credit Facility, these funds were initially used to reduce borrowings under WWI’s Revolver,
resulting in no increase in WWI’s net borrowing.
On June 24, 2005, WWI amended certain provisions of its Credit Facility to allow for the
December 16, 2005 Redemption, as described in Note 3.
WWI’s Term Loan B and the Revolver bear interest at an annual rate equal to LIBOR plus 1.75%
or, at WWI’s option, the alternate base rate (as defined in the Credit Facility) plus 0.75%. The
additional Term Loan B bears interest at an annual rate equal to LIBOR plus 1.50%, or at WWI’s
options, the alternative base rate (as defined in the Credit Facility), plus 0.50%. In addition to paying
interest on outstanding principal under the Credit Facility, WWI is required to pay a commitment fee
to the lenders under the Revolver with respect to the unused commitments at a rate equal to 0.375%
per year.
WWI’s Credit Facility contains customary covenants including covenants that in certain
circumstances restrict WWI’s ability to incur additional indebtedness, pay dividends on and redeem
capital stock, make other restricted payments, including investments, sell its assets and enter into
consolidations, mergers, and transfers of all or substantially all of its assets. The Credit Facility also
requires WWI to maintain specified financial ratios and satisfy financial condition tests. The Credit
Facility contains customary events of default. Upon the occurrence of an event of default under the
Credit Facility, the lenders may cease making loans and declare amounts outstanding to be immediately
due and payable. The Credit Facility is guaranteed by certain of the Company’s existing and future
subsidiaries, other than WW.com and its subsidiaries. Substantially all the assets of WWI and these
subsidiaries collateralize the Credit Facility.
On November 4, 2005, Standard & Poor’s confirmed its ‘‘BB’’ rating for WWI’s corporate credit
and WWI’s Credit Facility. On March 11, 2005, Moody’s assigned a ‘‘BA1’’ rating for WWI’s Term
Loan B and additional Term Loan B and confirmed its ‘‘BA1’’ rating for WWI’s Credit Facility.
WW.com Credit Facilities
On December 16, 2005, WW.com, borrowed $215,000 pursuant to two credit facilities (the
‘‘WW.com Credit Facilities’’), consisting of (i) a five year, senior secured first lien term loan facility in
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