Albertsons 2014 Annual Report Download - page 55

prepayment fee. Pursuant to the Secured Term Loan Facility due March 2019, the Company must, subject to
certain customary reinvestment rights, apply 100 percent of Net Cash Proceeds (as defined in the facility) from
certain types of asset sales (excluding proceeds of the collateral security of the Revolving ABL Credit Facility
due March 2018 and other secured indebtedness) to prepay the loans outstanding under the Secured Term Loan
Facility due March 2019. Beginning with the fiscal year ended February 22, 2014, the Company must prepay
loans outstanding under the 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 facility) as of the last day of such fiscal year) of Excess Cash Flow (as
defined in the facility) for the fiscal year then ended minus any voluntary prepayments made during such fiscal
year with Internally Generated Cash (as defined in the facility). Based on the Company’s Excess Cash Flow for
the fiscal year ended February 22, 2014, no prepayment will be required. The potential amount of prepayment
from Excess Cash Flow that will be required for fiscal 2015 is not reasonably estimable. As of February 22,
2014, the loans outstanding under the Secured Term Loan Facility due March 2019 had a remaining principal
balance of $1,474, none of which was classified as current.
In connection with the Refinancing Transactions, the Company paid financing costs of approximately $76 during
fiscal 2014, of which approximately $61 was capitalized and $15 was expensed. In addition, the Company
recognized 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 refinanced debt instruments.
On May 16, 2013, the Company entered into an amendment to the Secured Term Loan Facility due March 2019
(the ‘‘Term Loan Amendment’’) that reduced the interest rate for the term loan from LIBOR plus 5.00 percent
with a floor on LIBOR set at 1.25 percent to LIBOR plus 4.00 percent with a floor on LIBOR set at 1.00 percent.
The Term Loan Amendment also amended the Secured Term Loan Facility due March 2019 to provide that the
Company may incur additional term loans under the facility in an aggregate principal amount of up to $500
instead of $250 as in effect prior to the Term Loan Amendment, subject to identifying term loan lenders or other
institutional lenders willing to provide the additional loans and the satisfaction of certain terms and conditions.
The Term Loan Amendment also contains modified covenants to give the Company additional strategic and
operational flexibility. Since the Secured Term Loan Facility due March 2019 was refinanced within the first
year of its inception, the Company paid the lenders thereunder a 1.00 percent refinancing premium per the terms
of the facility. In connection with the completion of the Term Loan Amendment, the Company paid premiums
and financing costs of approximately $17 during fiscal 2014, of which approximately $10 was capitalized and $7
was expensed. In addition, the Company recognized a non-cash charge of approximately $20 for the write-off of
existing unamortized financing costs and $7 for the accelerated amortization of original issue discount on the
Secured Term Loan Facility due March 2019 during fiscal 2014.
On January 31, 2014, the Company entered into a second amendment to the Secured Term Loan Facility due
March 2019 (the “Second Term Loan Amendment”) that further reduced the interest rate for the term loan from
LIBOR plus 4.00 percent to LIBOR plus 3.50 percent with the floor on LIBOR remaining at 1.00 percent. The
Second Term Loan Amendment also eliminated the springing maturity provision that would have accelerated the
maturity of the facility to 90 days prior to May 1, 2016 if more than $250 of the 2016 Senior Notes (defined
below) remained outstanding as of that date. In addition, the amendment increased the Company’s flexibility to
make future investments permitted under the Secured Term Loan Facility due March 2019. In connection with
the completion of the Second Term Loan Amendment, the Company paid and expensed financing costs of
approximately $4 during the fiscal fourth quarter ended February 22, 2014. In addition, the Company recognized
a non-cash charge of approximately $1 for the write-off of existing unamortized financing costs and accelerated
amortization of the original issue discount on the Secured Term Loan Facility due March 2019 during the fourth
quarter ended February 22, 2014.
Debentures
On May 21, 2013, the Company completed a modified “Dutch Auction” tender offer (the “Debt Tender Offer”)
to purchase up to $372 aggregate principal amount of its outstanding 8.00 percent Senior Notes due 2016 (the
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