American Home Shield 2009 Annual Report Download - page 114

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 14. Long-Term Debt (Continued)
an aggregate principal amount of $150.0 million. As of December 31, 2009, the Company had issued $118.8 million of letters of credit, resulting in unused
commitments under the synthetic letter of credit facility of $31.2 million.
The Term Facilities will mature on July 24, 2014. The interest rates applicable to the loans under the Term Facilities are based on a fluctuating rate of
interest measured by reference to either, at ServiceMaster's option, (i) an adjusted London inter-bank offered rate (adjusted for maximum reserves), plus a
borrowing margin (as of December 31, 2009—2.50%) or (ii) an alternate base rate, plus a borrowing margin (as of December 31, 2009—1.50%). The
borrowing margin, in each case, will be adjusted from time to time based on the Consolidated Secured Leverage Ratio (as defined in the Term Facilities
agreement) for the previous fiscal quarter.
In August 2007, the Company entered into three, three-year interest rate swap agreements, effective September 4, 2007. The total notional amount of the
agreements was $530.0 million. Under the terms of the agreements, the Company will pay a weighted average fixed rate of interest of 5.05% on the
$530.0 million notional amount and the Company will receive a floating rate of interest (based on the one month LIBOR) on the notional amount. Therefore,
the effective interest rate for $530.0 million of the term loans is fixed at 7.55%, including the borrowing margin of 2.50% as of December 31, 2009.
In February 2008, the Company entered into two, three-year interest rate swap agreements and a four-year interest rate swap agreement, effective
March 3, 2008. The total notional amount of the three-year agreements was $250.0 million and the total notional amount of the four-year swap agreement was
$250.0 million. Under the terms of the agreements, the Company will pay a weighted average fixed rate of interest of 3.15% on the $250.0 million notional
amount under the three-year swap agreements and 3.48% on the $250.0 million notional amount under the four-year swap agreement. The Company will
receive a floating rate of interest (based on three month LIBOR) on the notional amount. Therefore, the effective interest rate for $500.0 million of the term
loans is fixed at a rate between 5.65% and 5.98%, including the borrowing margin of 2.50% as of December 31, 2009.
In August 2008, the Company entered into two, three-year interest rate swap agreements effective September 2, 2008. The total notional amount of the
swap agreements was $200.0 million. Under the terms of the agreements, the Company will pay a weighted average fixed rate of interest of 3.83% on the
$200.0 million notional amount of the swap agreements. The Company will receive a floating rate of interest (based on one month LIBOR) on the notional
amount. Therefore, the effective interest rate for $200.0 million of the term loans is fixed at a rate of 6.33%, including the borrowing margin of 2.50% as of
December 31, 2009.
In September 2008, the Company entered into a four-year interest rate swap agreement effective October 1, 2008. The notional amount of the swap
agreement was $200.0 million. Under the terms of the agreement, the Company will pay a weighted average fixed rate of interest of 3.53% on the
$200.0 million notional amount of the swap agreement. The Company will receive a floating rate of interest (based on one month LIBOR) on the notional
amount. Therefore, the effective interest rate for $200.0 million of the term loans is fixed at a rate of 6.03%, including the borrowing margin of 2.50% as of
December 31, 2009.
In April 2009, the Company entered into a two-year interest rate swap agreement effective August 2, 2010 with a notional amount of $530.0 million.
Under the terms of the agreement, the
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