WeightWatchers 2010 Annual Report Download - page 71

The WWI Credit Facility provides that term loans and the Revolver bear interest, at our option, at LIBO
R
p
lus an applicable margin per annum or the alternative base rate (as defined in the WWI Credit Facilit
y
Agreement) plus an applicable margin per annum. At the end of fiscal 2010, the Term A Loan and Additiona
l
T
erm A Loan bore interest at a rate e
q
ual to LIBOR
p
lus 1.00%
p
er annum; a
p
ortion of the Revolver I bor
e
interest at a rate e
q
ual to LIBOR
p
lus 1.00%
p
er annum and the other
p
ortion bore interest at a rate e
q
ual to the
alternative base rate
p
lus 0.00%
p
er annum; the Term B Loan bore interest at a rate e
q
ual to LIBOR
p
lus
1.
5
0%
p
er annum; the Term C Loan and Term D Loan bore interest at a rate e
q
ual to LIBOR
p
lus 2.2
5
%
p
e
r
annum; and a
p
ortion of the Revolver II bore interest at a rate e
q
ual to LIBOR
p
lus 2.
5
0%
p
er annum and th
e
o
ther portion bore interest at a rate equal to the alternative base rate plus 1.
5
0% per annum. In addition to payin
g
interest on outstanding principal under the WWI Credit Facility, at the end of fiscal 2010, we were required t
o
p
ay a commitment fee to the lenders under the Revolver I and Revolver II with respect to the unused
commitments at a rate equal to 0.20% per annum and 0.
5
0% per annum, respectively.
The WWI Credit Facility contains customary covenants including covenants that, in certain circumstances
,
r
estrict our ability to incur additional indebtedness, pay dividends on and redeem capital stock, make othe
r
p
ayments, including investments, sell our assets and enter into consolidations, mergers and transfers of all o
r
substantially all of our assets. The WWI Credit Facility also requires us to maintain specified financial ratios an
d
satisfy certain financial condition tests. At the end of fiscal 2010, we were in compliance with all of the required
f
inancial ratios and also met all of the financial condition tests and ex
p
ect to continue to do so for the foreseeable
f
uture. The WWI Credit Facility contains customary events of default. Upon the occurrence of an event of defaul
t
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 our existing and futur
e
subsidiaries. Substantially all of our assets collateralize the WWI Credit Facility
.
We previously amended the WWI Credit Facility on June 26, 2009 to allow us to make loan modificatio
n
o
ffers to all lenders of any tranche of term loans or revolving loans to extend the maturity date of such loans and/
o
r reduce or eliminate the scheduled amortization. Any such loan modifications would be effective only with
r
espect to such tranche of term loans or revolving loans and only with respect to those lenders that accept our
o
ffer. Loan modification offers may be accompanied by increased pricing and/or fees payable to acceptin
g
lenders. This amendment also provides for up to an additional
$
200.0 million of incremental term loan financing
through the creation of a new tranche of term loans, provided that the aggregate principal amount of such new
term loans cannot exceed the amount then outstanding under our existing revolving credit facility. In addition,
the proceeds from such new tranche of term loans must be used solely to repay certain outstanding revolvin
g
loans and permanently reduce the commitments of certain revolving lenders. In connection with this amendment,
we incurred fees of approximately
$
4.1 million during fiscal 2009
.
On April 8, 2010, we amended the WWI Credit Facility pursuant to a loan modification offer to all lender
s
o
f all tranches of term loans and revolving loans to, among other things, extend the maturity date of such loans
.
In connection with this amendment, certain lenders converted a total of
$
454.5 million of their outstanding term
loans under the Term A Loan (
$
151.8 million) and Additional Term A Loan (
$
302.7 million) into term loan
s
under the new Term C Loan due 201
5
(or 2013, u
p
on the occurrence of certain events described in the WWI
Credit Facility agreement), and a total of
$
241.9 million of their outstanding term loans under the Term B Loa
n
into term loans under the new Term D Loan due 2016. In addition, certain lenders converted a total of
$
332.
6
million of their outstanding Revolver I commitments into commitments under the new Revolver II which
terminates in 2014 (or 2013, upon the occurrence of certain events described in the WWI Credit Facility
agreement), including a proportionate amount of their outstanding Revolver I loans into Revolver II loans.
Following these conversions of a total of
$
1,029.0 million of loans and commitments, at April 8, 2010, we ha
d
the same amount of debt outstanding under the WWI Credit Facility and amount of availability under th
e
R
evolver as we had immediately prior to such conversions. In connection, with this loan modification offer, we
incurred fees of approximately
$
11.5 million during the second quarter of fiscal 2010
.
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