Albertsons 2014 Annual Report Download - page 87

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
“2016 Senior Notes”), in accordance with the terms and subject to the conditions set forth in an Offer to Purchase
dated May 2, 2013 and the accompanying Letter of Transmittal. On May 15, 2013 (the “Early Tender Time”), an
aggregate principal amount of $372 of the 2016 Senior Notes were validly tendered (and not validly withdrawn)
pursuant to the Debt Tender Offer. All notes validly tendered (and not validly withdrawn) pursuant to the Debt
Tender Offer at or prior to the Early Tender Time were accepted for purchase and settled by the Company on
May 21, 2013. As a result of the Debt Tender Offer being fully subscribed at the Early Tender Time, no 2016
Senior Notes tendered after the Early Tender Time were accepted for purchase.
On May 21, 2013, the Company issued $400 of 6.75 percent Senior Notes due June 2021 (the “2021 Senior
Notes”). The Company filed a registration statement on Form S-4 with the Securities and Exchange Commission
(the “SEC”) for the exchange of registered 2021 Senior Notes for any and all unregistered 2021 Senior Notes that
were issued on May 21, 2013. The exchange offer was completed on December 19, 2013, with all unregistered
2021 Senior Notes that were issued on May 21, 2013 being exchanged for registered 2021 Senior Notes. In
connection with the Debt Tender Offer and the issuance of the 2021 Senior Notes, the Company paid financing
costs and tender premiums of approximately $52 during the first quarter ended June 15, 2013, of which
approximately $3 was capitalized and $49 was expensed. In addition, the Company recognized non-cash charges
of $11 for the write-off of existing unamortized financing costs and accelerated amortization of original issue
discount on the Secured Term Loan Facility due March 2019 during fiscal 2014.
The remaining $628 of 2016 Senior Notes and the $400 of 2021 Senior Notes contain operating covenants,
including limitations on liens and on sale and leaseback transactions. The Company was in compliance with all
such covenants and provisions for all periods presented.
85