Albertsons 2011 Annual Report Download - page 52

remaining principal balance of $281 at LIBOR plus 1.125 percent, all of which was classified as current, and
Term Loan B-1 had a remaining principal balance of $498 at LIBOR plus 1.375 percent, of which $5 was
classified as current. There was $93 of outstanding borrowings under the extended portion of the Revolving
Credit Facility at rates ranging from LIBOR plus 2.50 percent to Prime plus 1.50 percent and Term Loan B-2
had a remaining principal balance of $496 at LIBOR plus 3.25 percent, of which $5 was classified as current.
Letters of credit outstanding under the Revolving Credit Facility were $315 at fees up to 2.75 percent and the
unused available credit under the Revolving Credit Facility was $1,678. The Company also had $4 of
outstanding letters of credit issued under separate agreements with financial institutions. These letters of credit
primarily support workers’ compensation, merchandise import programs and payment obligations. Facility fees
under the non-extended and extended portions of the Revolving Credit Facility are 0.30 percent and
0.625 percent, respectively. Borrowings under the term loans may be repaid, in full or in part, at any time
without penalty.
The Credit Agreement reset covenants which are generally less restrictive than the covenants that existed prior
to April 5, 2010. Specifically, the Company must maintain a leverage ratio no greater than 4.25 to 1.0 through
December 30, 2011, 4.0 to 1.0 from December 31, 2011 through December 30, 2012 and 3.75 to 1.0
thereafter. The Company’s leverage ratio was 3.5 to 1.0 at February 26, 2011. Additionally, the Company must
maintain an interest expense coverage ratio of not less than 2.20 to 1.0 through December 30, 2011, 2.25 to
1.0 from December 31, 2011 through December 30, 2012 and 2.30 to 1.0 thereafter. The Company’s interest
expense ratio was 2.6 to 1.0 at February 26, 2011.
All obligations under the senior secured credit facilities are guaranteed by each material subsidiary of the
Company. The obligations are also secured by a pledge of the equity interests in those same material
subsidiaries, limited as required by the existing public indentures of the Company, such that the respective
debt issued need not be equally and ratably secured.
In May 2010, the Company amended and extended its accounts receivable securitization program until May
2013. The Company can borrow up to $200 on a revolving basis, with borrowings secured by eligible accounts
receivable, which remain under the Company’s control. As of February 26, 2011, there was $90 of outstanding
borrowings at 1.32 percent under this facility and the facility fee in effect, based on the Company’s current
credit ratings, was 1.00 percent. As of February 26, 2011, there were $284 of accounts receivable pledged as
collateral, classified in Receivables in the Consolidated Balance Sheet.
As of February 26, 2011, the Company had $30 of debt with current maturities that are classified as long-term
debt due to the Company’s intent to refinance such obligations with the Revolving Credit Facility or other
long-term debt.
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