WeightWatchers 2008 Annual Report Download - page 80

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
agreements). During the first quarter of fiscal 2008, the interest rate on the Term Loan A, Additional Term Loan
A and Revolver was reduced to LIBOR plus 1.0% per annum or, at the Company’s option, the alternate base rate
(as defined in the WWI Credit Facility agreements) in accordance with the terms of the WWI Credit Facility
agreements due to the achievement of certain financial ratios. The Term Loan B bears interest at an initial rate
equal to LIBOR plus 1.5% per annum or, at the Company’s option, the alternate base rate (as defined in the WWI
Credit Facility agreements). In addition to paying interest on outstanding principal under the WWI Credit
Facility, the Company is required to pay a commitment fee to the lenders under the Revolver with respect to the
unused commitments at an initial rate equal to 0.25% per annum. During the first quarter of fiscal 2008, this
commitment fee was reduced to 0.20% per annum in accordance with the terms of the WWI Credit Facility
agreements due to the achievement of certain financial ratios.
The WWI Credit Facility contains customary covenants including covenants that, in certain circumstances,
restrict the Company’s ability to incur additional indebtedness, pay dividends on and redeem capital stock, make
other payments, including investments, sell its assets and enter into consolidations, mergers and transfers of all or
substantially all of its assets. The WWI Credit Facility also requires the Company to maintain specified financial
ratios and satisfy certain financial condition tests. At January 3, 2009, the Company was in compliance with all
of the required financial ratios and also met all of the financial condition tests and expects to continue to do so
for the foreseeable future. The WWI Credit Facility contains customary events of default. Upon the occurrence of
an event of default under the WWI Credit Facility, the lenders thereunder may cease making loans and declare
amounts outstanding to be immediately due and payable. The WWI Credit Facility is guaranteed by certain of the
Company’s existing and future subsidiaries. Substantially all the assets of the Company collateralize the WWI
Credit Facility.
On March 20, 2008, Standard & Poor’s affirmed its “BB+” rating on the WWI Credit Facility. On
March 31, 2008, Moody’s affirmed its “Ba1” rating for the WWI Credit Facility.
WW.com Credit Facilities
On December 16, 2005, WW.com borrowed $215,000 consisting of (i) a five year, senior secured first lien
term loan facility in an aggregate principal amount of $170,000 and (ii) a five and one-half year, senior secured
second lien term loan facility in an aggregate principal amount of $45,000, pursuant to two credit agreements
among WW.com, Credit Suisse, as administrative agent and collateral agent, and the participating lenders (the
“WW.com Credit Facilities”). As discussed above, the WW.com Credit Facilities were repaid in full in January
2007.
Maturities
At January 3, 2009, the aggregate amounts of existing long-term debt maturing in each of the next five years
and thereafter are as follows:
2009 ........................................................... $ 162,500
2010 ........................................................... 215,000
2011 ........................................................... 515,000
2012 ........................................................... 229,000
2013 ........................................................... 61,000
2014 and thereafter ............................................... 465,000
$1,647,500
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