World Fuel Services 2007 Annual Report Download - page 72

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64435 TX 64WORLD FUEL SERVICES
ANNUAL REPORT
28-Feb-2008 00:13 EST
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PMT 2C
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9.9.26
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Debt
In December 2007, we amended and restated our senior revolving credit facility (“Credit Facility)
agreement, which is guaranteed by us and certain of our U.S. subsidiaries and, on a limited basis, by certain of
our foreign subsidiaries, including World Fuel Services Europe, Ltd. and World Fuel Services (Singapore) Pte.
Ltd. In addition, the Credit Facility is secured by a pledge of the capital stock of certain of our subsidiaries. This
recent amendment extends the expiration date of our Credit Facility agreement to December 21, 2012.
Our Credit Facility permits borrowings of up to $475.0 million with a sublimit of $100.0 million for the
issuance of letters of credit and provides us the right to request increases in available borrowings up to an
additional $75.0 million, subject to the satisfaction of certain conditions. As of December 31, 2007, we had $40.0
million in outstanding borrowings under our Credit Facility and $55.1 million in issued letters of credit. Our
available borrowings at December 31, 2007 under the Credit Facility were $379.9 million. As of December 31,
2006, we had $20.0 million in outstanding borrowings under our Credit Facility and $51.4 million in issued
letters of credit.
As defined in the Credit Facility agreement, borrowings under our Credit Facility bear interest at market
rates plus applicable margins ranging from zero percent to 1.5% for U.S. Prime Rate loans and 1.00% to 2.50%
for LIBOR Rate loans. The unused portion of our Credit Facility is subject to fees (“Commitment Fees”) ranging
from 0.20% to 0.375%. Letters of credit issued under our Credit Facility are subject to fees (“L/C Fees”) ranging
from 1.00% to 2.50%. Interest, Commitment Fees and L/C Fees are payable quarterly and at maturity in arrears.
As of December 31, 2007, we had two interest rate protection arrangements in the form of interest rate swaps in
the amount of $10.0 million each to reduce our exposure to increases in interest rates. These interest rate
protection arrangements expire in March and April 2008. As of December 31, 2007, our weighted average
interest rate on borrowings under the Credit Facility, adjusting for the interest rate swaps, was 5.6% per annum.
As of December 31, 2007, our Commitment Fees and L/C Fees rates were 0.20% and 1.00%, respectively.
Our Credit Facility contains certain operating and financial covenants with which we are required to
comply. Our failure to comply with the operating and financial covenants contained in our Credit Facility could
result in an event of default. An event of default, if not cured or waived, would permit acceleration of any
outstanding indebtedness under the Credit Facility, trigger cross-defaults under other agreements to which we are
a party, and impair our ability to obtain working capital advances and letters of credit, which would have a
material adverse effect on our business, financial condition and results of operations. As of December 31, 2007,
we believe we were in compliance with all covenants under our Credit Facility.
We also have a separate $25.0 million unsecured credit line for the issuance of letters of credit and bank
guarantees from one of the banks participating in our Credit Facility. Letters of credit issued under this credit line
are subject to fees at market rates payable semiannually and at maturity in arrears. This credit line is renewable
on an annual basis. As of December 31, 2007 and 2006, we had outstanding bank guarantees of $3.9 million and
$4.0 million, respectively, under this credit line. Also, as of December 31, 2006, we had outstanding letters of
credit of $11.4 million issued under this credit line.
Substantially all of the letters of credit issued under our Credit Facility and the credit line were provided to
suppliers in the normal course of business, and expire within one year from their issuance. Expired letters of
credit are renewed as needed.
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