WeightWatchers 2013 Annual Report Download - page 77

subject to a minimum interest rate of 0.75% and the base rate under the Tranche B-2 Term Facility is subject to a
minimum interest rate of 1.75%. The applicable margin relating to both of the Term Facilities will increase by 25
basis points in the event that we receive a corporate rating of BB- (or lower) from S&P and a corporate rating of
Ba3 (or lower) from Moody’s. The applicable margin relating to the Revolving Facility will fluctuate depending
upon our Consolidated Leverage Ratio (as defined in the New Credit Agreement). At December 28, 2013,
borrowings under the Tranche B-1 Term Facility bore interest at LIBOR plus an applicable margin of 2.75% and
borrowings under the Tranche B-2 Term Facility bore interest at LIBOR plus an applicable margin of 3.00%. At
our Consolidated Leverage Ratio as of December 28, 2013, had there been any borrowings under the Revolving
Facility, it would have borne interest at LIBOR plus an applicable margin of 2.25% or base rate plus an
applicable margin of 1.25%. On February 21, 2014, both S&P and Moody’s issued revised corporate ratings of
the Company of B+ and B1, respectively. As a result, effective February 21, 2104, the applicable margin on
borrowings under the Tranche B-1 Term Facility went from 2.75% to 3.00% and on borrowings under the
Tranche B-2 Term Facility went from 3.00% to 3.25%.
On a quarterly basis, we will pay a commitment fee to the lenders under the Revolving Facility in respect of
unutilized commitments thereunder, which commitment fee will fluctuate, but in no event exceed 0.50% per
annum, depending upon our Consolidated Leverage Ratio. At our Consolidated Leverage Ratio as of
December 28, 2013, the commitment fee was 0.40% per annum. We also will pay customary letter of credit fees
and fronting fees under the Revolving Facility.
The New Credit Agreement contains customary covenants including covenants that, in certain
circumstances, restrict our ability to incur additional indebtedness, pay dividends on and redeem capital stock,
make other payments, including investments, sell our assets and enter into consolidations, mergers and transfers
of all or substantially all of our assets. The Revolving Facility requires us to not exceed a specified Consolidated
Leverage Ratio, but only if borrowings under the Revolving Facility exceed 20.0% of revolving commitments as
of the end of such fiscal quarter. As of December 28, 2013, the maximum Consolidated Leverage Ratio was
5.00:1.00 and borrowings in excess of $50 million would require us to not exceed such ratio. As of December 28,
2013, our actual Consolidated Leverage Ratio was 4.21:1.00 and there were no borrowings under our Revolving
Facility and total letters of credit issued were $1.6 million. The requirement to not exceed the Consolidated
Leverage Ratio may effectively limit our ability to borrow funds in excess of $50.0 million under the Revolving
Facility. The Term Facilities do not require us to maintain any financial ratios. The WWI Credit Facility is
guaranteed by certain of our existing and future subsidiaries. Substantially all of our assets secure the WWI
Credit Facility.
During the first quarter of fiscal 2012, the composition of our then existing WWI Credit Facility changed as
a result of our amending and restating our then existing WWI Credit Facility to, among other things, extend the
maturity of certain of our term loan facilities and our revolving credit facility and to obtain new commitments for
the borrowing of an additional $1,449.4 million of term loans to finance the purchases of shares of our common
stock in the Tender Offer and from Artal Holdings pursuant to the Purchase Agreement.
Immediately prior to the amendment of our then existing WWI Credit Facility, the term loan facilities
consisted of a tranche A-1 loan, or Term A-1 Loan, a tranche B loan, or Term B Loan, a tranche C loan, or
Term C Loan, and a tranche D loan, or Term D Loan, and a revolving credit facility, or Revolver A-1. The
aggregate principal amount then outstanding under (i) the Term A-1 Loan was $128.6 million, (ii) the Term B
Loan was $237.5 million, (iii) the Term C Loan was $420.4 million and (iv) the Term D Loan was $238.2
million. Immediately prior to the amendment of our then existing WWI Credit Facility, the Revolver A-1 had no
loans outstanding under it, $1.0 million of issued but undrawn letters of credit and $331.6 million in available
unused commitments thereunder.
Following the amendment of our then existing WWI Credit Facility on March 15, 2012, (i) $33.1 million in
aggregate principal amount of the Term A-1 Loan and $301.8 million in aggregate principal amount of the
Term C Loan were converted into, and $849.4 million in aggregate principal amount of commitments to borrow
new term loans were provided under, a new tranche E loan, or Term E Loan, (ii) $107.0 million in aggregate
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