Albertsons 2014 Annual Report Download - page 85

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.
Senior Secured Credit Agreements
As of February 23, 2013, there were borrowings outstanding under the Company’s six-year $850 term loan due
August 2018 (the “Secured Term Loan Facility due August 2018”) of $834 at the rate of LIBOR plus 6.75
percent and including a LIBOR floor of 1.25 percent, of which $9 was classified as current. The Secured Term
Loan Facility due August 2018 was also guaranteed by the Company’s material subsidiaries. To secure their
obligations under the Secured Term Loan Facility due August 2018, the Company and the guarantors granted a
perfected first-priority mortgage lien and security interest for the benefit of the facility lenders in certain of their
owned or ground-leased real estate and the equipment located on such real estate. As of February 23, 2013, there
was $302 of owned or ground-leased real estate and associated equipment pledged as collateral, classified as
Property, plant and equipment, net as well as $767 of assets included in Long-term assets of discontinued
operations in the Consolidated Balance Sheets. In addition, the obligations under the Secured Term Loan Facility
due August 2018 were secured by second-priority secured interests in the collateral securing the five-year $1,650
asset-based revolving credit facility (the “Revolving ABL Credit Facility due August 2017”), subject to certain
limitations to ensure compliance with the Company’s outstanding debt instruments and leases.
On March 21, 2013, the Company entered into (i) an amended and restated five-year $1,000 (subject to
borrowing base availability) asset-based revolving credit facility, which pursuant to an accordion feature may be
increased to $1,250 upon our request and subject to the agreement of the lenders participating in the increase (the
“Revolving ABL Credit Facility due March 2018”), secured by the Company’s inventory, credit card receivables
and certain other assets, which bears interest at the rate of LIBOR plus 1.75 percent to LIBOR plus 2.25 percent
or prime plus 0.75 percent to 1.25 percent, with facility fees ranging from 0.25 percent to 0.375 percent,
depending on utilization and (ii) a new six-year $1,500 term loan (the “Secured Term Loan Facility due March
2019”), secured by substantially all of the Company’s real estate, equipment and certain other assets, which bears
interest at the rate of LIBOR plus 5.00 percent and includes a floor on LIBOR set at 1.25 percent (collectively,
the “Refinancing Transactions”). The proceeds of the Refinancing Transactions were used to replace the
Company’s Revolving ABL Credit Facility due August 2017, the Secured Term Loan Facility due August 2018
and the $200 accounts receivable securitization facility, and refinanced the $490 of 7.50 percent senior notes due
November 2014.
Certain of the Company’s material subsidiaries are co-borrowers under the Revolving ABL Credit Facility due
March 2018, and this facility is guaranteed by the rest of the Company’s material subsidiaries (the Company and
those subsidiaries named as borrowers and guarantors under the Revolving ABL Credit Facility due March 2018,
the “ABL Loan Parties”). To secure their obligations under this facility, the ABL Loan Parties have granted a
perfected first-priority security interest for the benefit of the 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 Revolving ABL Credit Facility due March 2018 are secured by second-
priority liens on and security interests in the collateral securing the Secured Term Loan Facility due March 2019,
subject to certain limitations to ensure compliance with the Company’s outstanding debt instruments and leases.
As of February 22, 2014, there were no outstanding borrowings under the Revolving ABL Credit Facility due
March 2018. Facility fees under this facility were 0.375 percent. Letters of credit outstanding under the
Revolving ABL Credit Facility due March 2018 were $101 at fees up to 2.125 percent and the unused available
credit under this facility was $786. As of February 22, 2014, the Revolving ABL Credit Facility due March 2018
was secured on a first priority basis by $1,066 of assets included in Inventories, net, all eligible receivables
included in Receivables, net, all of the Company’s pharmacy scripts included in Intangible assets, net and all
credit card receivables of wholly-owned stores included in Cash and cash equivalents in the Consolidated
83