Western Union 2010 Annual Report Download - page 118

Commercial Paper Program
On November 3, 2006, the Company established a commercial paper program pursuant to which the Company
may issue unsecured commercial paper notes (the “Commercial Paper Notes”) in an amount not to exceed
$1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Revolving Credit
Facility as described below. The Commercial Paper Notes may have maturities of up to 397 days from date of
issuance. Interest rates for borrowings are based on market rates at the time of issuance. The Company had no
commercial paper borrowings outstanding at December 31, 2010 and 2009, respectively.
Revolving Credit Facility
On September 27, 2006, the Company entered into a five-year unsecured revolving credit facility, which includes
a $1.5 billion revolving credit facility, a $250.0 million letter of credit sub-facility and a $150.0 million swing line
sub-facility (the “Revolving Credit Facility”). On September 28, 2007, the Company entered into an amended and
restated credit agreement, the primary purpose of which was to extend the maturity by one year from its original
five-year $1.5 billion facility entered into in 2006. No other material changes were made in the amended and
restated facility. The Revolving Credit Facility, which is diversified through a group of 15 participating institutions,
is used to meet additional liquidity needs that might arise for the Company and to support borrowings under the
Company’s commercial paper program. The Revolving Credit Facility contains certain covenants that, among other
things, limit or restrict the ability of the Company and other significant subsidiaries to grant certain types of security
interests, incur debt or enter into sale and leaseback transactions. The Company is also required to maintain
compliance with a consolidated interest coverage ratio covenant.
Interest due under the Revolving Credit Facility is fixed for the term of each borrowing and is payable according
to the terms of that borrowing. Generally, interest is calculated using a selected LIBOR rate plus an interest rate
margin of 19 basis points. A facility fee of 6 basis points on the total facility is also payable quarterly, regardless of
usage. The facility fee percentage is determined based on certain of the Company’s credit ratings. In addition, to the
extent the aggregate outstanding borrowings under the Revolving Credit Facility exceed 50% of the related
aggregate commitments, a utilization fee of 5 basis points as of December 31, 2010 based upon such ratings is
payable to the lenders on the aggregate outstanding borrowings.
As of and during the year ended December 31, 2010, the Company had $1.5 billion available to borrow, as the
Company had no borrowings outstanding under the Revolving Credit Facility.
Term Loan
On December 5, 2008, the Company entered into a senior, unsecured, 364-day term loan in an aggregate
principal amount of $500 million with a syndicate of lenders. The Term Loan was paid and financed with the
issuance of the 2014 Notes on February 26, 2009.
Notes
On June 21, 2010, the Company issued $250.0 million of aggregate principal amount of unsecured notes due
June 21, 2040. Interest with respect to the 2040 Notes is payable semiannually on June 21 and December 21 each
year based on the fixed per annum interest rate of 6.200%. The 2040 Notes are subject to covenants that, among
other things, limit or restrict the ability of the Company and certain of its subsidiaries to grant certain types of
security interests or enter into sale and leaseback transactions. The Company may redeem the 2040 Notes at any
time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 30 basis points.
On March 30, 2010, the Company exchanged $303.7 million of aggregate principal amount of the 2011 Notes for
unsecured notes due April 1, 2020. Interest with respect to the 2020 Notes is payable semiannually on April 1 and
October 1 each year based on the fixed per annum interest rate of 5.253%. In connection with the exchange, note
holders were given a 7% premium ($21.2 million), which approximated market value at the exchange date, as
additional principal. As this transaction was accounted for as a debt modification, this premium was not charged to
expense. Rather, the premium, along with the offsetting hedge accounting adjustments, will be accreted into interest
expense over the life of the notes. The 2020 Notes are subject to covenants that, among other things, limit or restrict
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