Albertsons 2013 Annual Report Download - page 100

In connection with the Refinancing Transactions, the Company paid financing costs of approximately $80, of
which approximately $65 will be capitalized and $15 will be expensed. In addition, the Company will recognize
a non-cash charge of approximately $38 for the write-off of existing unamortized financing costs and $22 for the
accelerated amortization of original issue discount on the existing term loan.
Certain of the Company’s material subsidiaries are co-borrowers under the ABL Facility, and the ABL Facility is
guaranteed by the rest of the Company’s material subsidiaries (the Company and those subsidiaries named as
borrowers and guarantors under the ABL Facility, the “ABL Loan Parties”). To secure their obligations under the
ABL Facility, the ABL Loan Parties have granted a perfected first-priority security interest for the benefit of the
ABL Facility lenders in its present and future inventory, credit card, wholesale trade, pharmacy and certain other
receivables, prescription files and related assets. In addition, the obligations under the ABL Facility are secured
by second-priority liens on and security interests in the collateral securing the Term Loan Facility, subject to
certain limitations to ensure compliance with the Company’s outstanding debt instruments and leases.
The revolving loans under the ABL Facility may be voluntarily prepaid in certain minimum principal amounts, in
whole or in part, without premium or penalty, subject to breakage or similar costs. The Company and those
subsidiaries named as borrowers under the ABL Facility are required to repay the revolving loans in cash and
provide cash collateral under the ABL Facility to the extent that the revolving loans and letters of credit exceed
the lesser of the borrowing base then in effect or the aggregate amount of the ABL Facility lenders’ commitments
under the ABL Facility.
The Term Loan Facility is also guaranteed by the Company’s material subsidiaries (together with the Company,
the “Term Loan Parties”). To secure their obligations under the Term Loan Facility, the Company granted a
perfected first-priority mortgage lien and security interest for the benefit of the Term Loan Facility lenders in the
Term Loan Parties’ equity investment in Moran Foods, LLC, the parent entity of the Company’s Save-A-Lot
business and substantially all of the Term Loan Parties’ intellectual property, and agreed to grant first priority
liens and security interests on certain of the Term Loan Parties’ owned or ground leased real estate within 90
days after the closing of the Term Loan Facility and certain additional equipment of the Term Loan Parties
within 120 days after the closing of the Term Loan Facility, subject to any extensions that may be granted. In
addition, the obligations of the Term Loan Parties under the Term Loan Facility are secured by second-priority
security interests in the collateral securing the ABL Facility.
The loans under the Term Loan Facility may be voluntarily prepaid in certain minimum principal amounts,
subject to the payment of breakage or similar costs and, in certain circumstances, a prepayment fee. Pursuant to
the Term Loan Facility, the Company must, subject to certain customary reinvestment rights, apply 100 percent
of Net Cash Proceeds (as defined in the Term Loan Credit Facility) from certain types of asset sales (excluding
proceeds of the collateral security of the ABL Facility and other secured indebtedness) to prepay the loans
outstanding under the Term Loan Facility. Also, beginning with the Company’s fiscal year ending February 22,
2014, the Company must prepay loans outstanding under the Term Loan Facility no later than 90 days after the
fiscal year end in an aggregate principal amount equal to a percentage (which percentage ranges from 0 to 50
percent depending on the Company’s Total Secured Leverage Ratio (as defined in the Term Loan Facility) as of
the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Facility) for the fiscal year
then ended minus any voluntary prepayments made during such fiscal year with Internally Generated Cash (as
defined in the Term Loan Facility).
The Company’s credit facilities and certain long-term debt agreements have restrictive covenants and cross-
default provisions which generally provide, subject to the Company’s right to cure, for the acceleration of
payments due in the event of a breach of a covenant or a default in the payment of a specified amount of
indebtedness due under certain other debt agreements. The Company was in compliance with all such covenants
and provisions for all periods presented.
On March 20, 2013, in conjunction with the completion of the Tender Offer the Company’s Board of Directors
deemed the completion of the Tender Offer and issuance of common stock to Symphony Investors a change-in-
control for the purposes of the Company’s outstanding stock-based awards which allowed for the acceleration of
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