Western Union 2012 Annual Report Download - page 71

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Revolving Credit Facility
On September 23, 2011, we 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.
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 our credit ratings.
The purpose of our Revolving Credit Facility, which is diversified through a group of 17 participating institutions, is to provide
general liquidity and to support our commercial paper program, which we believe enhances our short-term credit rating. The largest
commitment from any single financial institution within the total committed balance of $1.65 billion is approximately 12%. As
of and during the year ended December 31, 2012, we had no outstanding borrowings under our Revolving Credit Facility. If the
amount available to borrow under the Revolving Credit Facility decreased, or if the Revolving Credit Facility were eliminated,
the cost and availability of borrowing under the commercial paper program may be impacted.
Notes
On December 10, 2012, we 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. We 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.
On August 22, 2011, we issued $400.0 million of aggregate principal amount of unsecured notes due August 22, 2018 (“2018
Notes”). Interest with respect to the 2018 Notes is payable semi-annually in arrears on February 22 and August 22 of each year,
based on the fixed per annum interest rate of 3.650%. We may redeem the 2018 Notes at any time prior to maturity at the greater
of par or a price based on the applicable treasury rate plus 35 basis points.
On March 7, 2011, we issued $300.0 million of aggregate principal amount of unsecured floating rate notes due March 7,
2013 (“2013 Notes”). Interest with respect to the 2013 Notes is payable quarterly in arrears on each March 7, June 7, September
7 and December 7, beginning June 7, 2011, at a per annum interest rate equal to the three-month LIBOR plus 58 basis points (reset
quarterly). For discussion of our debt service requirements with respect to the 2013 Notes, see the “Debt Service Requirements”
discussion below.
On June 21, 2010, we issued $250.0 million of aggregate principal amount of unsecured notes due June 21, 2040 (“2040
Notes”). Interest with respect to the 2040 Notes is payable semi-annually on June 21 and December 21 each year based on the
fixed per annum interest rate of 6.200%. We 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, we exchanged $303.7 million of aggregate principal amount of unsecured notes due November 17, 2011
(“2011 Notes”) for unsecured notes due April 1, 2020 (“2020 Notes”). Interest with respect to the 2020 Notes is payable semi-
annually 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. We may redeem the 2020 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury
rate plus 15 basis points.