Western Union 2012 Annual Report Download - page 130

THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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Commercial Paper Program
Pursuant to the Company's commercial paper program, the Company may issue unsecured 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 Company's
Revolving Credit Facility. The Commercial Paper Notes may have maturities of up to 397 days from date of issuance. The Company
had no commercial paper borrowings outstanding as of December 31, 2012. During the years ended December 31, 2012 and 2011,
the average commercial paper balance outstanding was $161.3 million and $89.7 million, respectively, and the maximum balance
outstanding was $422.8 million and $784.1 million, respectively. Proceeds from the Company's commercial paper borrowings
were used for general corporate purposes.
Revolving Credit Facility
On September 23, 2011, the Company entered into a credit agreement which expires January 2017 providing for unsecured
financing facilities in an aggregate amount of $1.65 billion, including a $250.0 million letter of credit sub-facility and a $150.0
million swing line sub-facility (“Revolving Credit Facility”). The Revolving Credit Facility contains certain covenants that, among
other things, limit or restrict the Company's ability to sell or transfer assets or merge or consolidate with another company, grant
certain types of security interests, incur certain types of liens, impose restrictions on subsidiary dividends, enter into sale and
leaseback transactions, or incur certain subsidiary level indebtedness, subject to certain exceptions. The Company is required to
maintain compliance with a consolidated interest coverage ratio covenant. The Revolving Credit Facility supports borrowings
under the Company's $1.5 billion commercial paper program.
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 100 basis points. A
facility fee of 12.5 basis points is also payable quarterly on the total facility, regardless of usage. Both the interest rate margin and
facility fee percentage are based on certain of the Company's credit ratings.
As of and during the years ended December 31, 2012 and 2011, the Company had no outstanding borrowings under the
Revolving Credit Facility. As of December 31, 2012, the Company had no commercial paper borrowings outstanding and as of
December 31, 2011, the Company had $297.0 million of commercial paper borrowings outstanding, which left $1,650.0 million
and $1,353.0 million remaining that was available to borrow on the Revolving Credit Facility, respectively.
Notes
On December 10, 2012, the Company issued $250.0 million and $500.0 million of aggregate principal amounts of unsecured
notes due December 10, 2015 and December 10, 2017, respectively. Interest with respect to the 2015 Notes and 2017 Notes is
payable semi-annually in arrears on June 10 and December 10 of each year, currently based on the per annum interest rates of
2.375% and 2.875%, respectively. The interest rates payable on the 2015 Notes and 2017 Notes will be increased if the debt rating
assigned to such notes is downgraded by an applicable credit rating agency, beginning at a downgrade below investment grade.
However, in no event will the interest rate on either the 2015 Notes or 2017 Notes be increased by more than 2.00% above 2.375%
and 2.875% per annum, respectively. The interest rates on the 2015 Notes and 2017 Notes may also be adjusted downward for
debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 2.375% and 2.875% per annum.
The 2015 Notes and 2017 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to
sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company's and certain of its subsidiaries'
ability to incur certain types of security interests, or enter into sale and leaseback transactions. If a change of control triggering
event occurs, holders of the 2015 Notes and 2017 Notes may require the Company to repurchase some or all of their notes at a
price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. The Company may redeem the
2015 Notes and 2017 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus
35 and 40 basis points, respectively.