Computer Associates 2005 Annual Report Download - page 124

Table of Contents
Note 6 — Debt (Continued)
March 31,
2005 2004
Maximu
m Outstanding
Maximu
m Outstanding
Available Balance
Availabl
e Balance
(in millions)
2002 Revolving Credit Facility $
—
$
—
$ 470 $
—
2004 Revolving Credit Facility 1,000
—
—
—
2002 Revolving Credit Facility
In December 2002, the Company entered into the 2002 Revolving Credit Facility. The maximum amount that could be outstanding at
any time under the 2002 Revolving Credit Facility was $470 million. This facility was set to expire on January 31, 2005 and was
terminated and replaced by the 2004 Revolving Credit Facility in December 2004.
2004 Revolving Credit Facility
In December 2004, the Company entered into the 2004 Revolving Credit Facility with a maximum available borrowing capacity of
$1 billion. The 2004 Revolving Credit Facility expires December 2008 and no amount was drawn as of March 31, 2005.
Borrowings under the 2004 Revolving Credit Facility will bear interest at a rate dependent on the Company’ s credit ratings at the time of
such borrowings and will be calculated according to a base rate or a Eurocurrency rate, as the case may be, plus an applicable margin and
utilization fee. Depending on the Company’ s credit rating at the time of borrowing, the applicable margin can range from 0% to 0.325%
for a base rate borrowing and from 0.50% to 1.325% for a Eurocurrency borrowing, and the utilization fee can range from 0.125% to
0.250%. At the Company’ s current credit ratings, the applicable margin would be 0% for a base rate borrowing and 0.70% for a
Eurocurrency borrowing, and the utilization fee would be 0.125%. In addition, the Company must pay facility fees quarterly at rates
dependent on the Company’ s credit ratings. Depending on the Company’ s credit rating, the facility fees can range from 0.125% to 0.30%
of the aggregate amount of each lender’ s full revolving credit commitment (without taking into account any outstanding borrowings
under such commitments). At the Company’ s current credit ratings, the facility fee is 0.175% of the aggregate amount of each lender’ s
revolving credit commitment.
The 2004 Revolving Credit Facility Agreement contains customary covenants for transactions of this type, including two financial
covenants: (i) for the 12-months ending each quarter-end, the ratio of consolidated debt for borrowed money to consolidated cash flow,
each as defined in the Credit Agreement, must not exceed 3.25 for the quarter ending December 31, 2004 and 2.75 for quarters ending
March 31, 2005 and thereafter; and (ii) for the 12-months ending each quarter-end, the ratio of consolidated cash flow to the sum of
interest payable on, and amortization of debt discount in respect of, all consolidated debt for borrowed money, as defined in the Credit
Agreement, must not be less than 5.00. In addition, as a condition precedent to each borrowing made under the Credit Agreement, as of
the date of such borrowing, (i) no event of default shall have occurred and be continuing and (ii) the Company is to reaffirm that the
representations and warranties made in the Credit Agreement (other than the representation with respect to material adverse changes, but
including the representation regarding the absence of certain material litigation) are correct.
The Company capitalized the transaction fees associated with the 2004 Revolving Credit Facility, which totaled approximately
$6 million. The Company is amortizing these fees over the term of the 2004 Revolving Credit Facility to “Interest expense, net” on the
Consolidated Statements of Operations.
Senior Note Obligations
As of March 31, 2005 and 2004, the Company had the following unsecured, fixed-rate interest, senior note obligations outstanding:
March 31,
2005 2004
(in millions)
6.375% Senior Notes due April 2005 $ 825 $825
5.000% Convertible Senior Notes due March 2007
—
660
6.500% Senior Notes due April 2008 350 350
4.750% Senior Notes due November 2009 500
—
1.625% Convertible Senior Notes due December 2009 460 460
5.625% Senior Notes due November 2014 500
—
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