Computer Associates 2007 Annual Report Download - page 114

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(IN MILLIONS)
MAXIMUM
AVAILABLE
OUTSTANDING
BALANCE
MAXIMUM
AVAILABLE
OUTSTANDING
BALANCE
2007 2006
YEAR ENDED MARCH 31,
2004 Revolving Credit Facility $ 1,000 $ 750 $ 1,000 $ —
2004 Revolving Credit Facility
In December 2004, the Company entered into the 2004 Revolving Credit Facility.The maximum committed amount available
under the 2004 Revolving Credit Facility is $1 billion, exclusive of incremental credit increases of up to an additional
$250 million which are available subject to certain conditions and the agreement of the lenders. The 2004 Revolving Credit
Facility expires in December 2008 and $750 million was drawn as of March 31, 2007. No amounts were drawn as of
March 31, 2006.
The Company drew down $750 million in September 2006 in order to finance the $1 billion tender offer, which is further
described in the “Stock repurchase” section of Note 1 — “Significant Accounting Policies” in this Annual Report on Form 10-K.
Borrowings under the 2004 Revolving Credit Facility bear interest at a rate dependent on the Company’s credit ratings at the
time of such borrowings and are calculated according to a base rate or a Eurocurrency rate, as the case may be, plus an
applicable margin and utilization fee. The Company’s current borrowing rate is 6.49%. 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%. Based on the Company’s
credit ratings as of May 2007, the applicable margin is 0.025% for a base rate borrowing and 1.025% for a Eurocurrency
borrowing, and the utilization fee is 0.125%. In addition, the Company must pay facility fees quarterly at rates dependent on
the Company’s credit ratings.The facility fees can range from 0.125% to 0.30% of the amount of the committed amount under
the facility (without taking into account any outstanding borrowings under such commitments). Based on the Company’s
credit ratings as of May 2007, the facility fee is 0.225% of the $1 billion committed amount.
The 2004 Revolving Credit Facility 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 2004 Revolving Credit Facility, must not exceed 4.00 for the quarters ended March 31, 2007
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 2004
Revolving Credit Facility, must not be less than 5.00. In addition, as a condition precedent to each borrowing made under the
2004 Revolving Credit Facility, 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 2004 Revolving Credit Facility (other
than the representation with respect to material adverse changes, but including the representation regarding the absence of
certain material litigation) are correct. As of May 2007, the Company is in compliance with these debt covenants.
Senior Note Obligations
As of March 31, 2007 and 2006, the Company had the following unsecured, fixed-rate interest, senior note obligations
outstanding:
(IN MILLIONS) 2007 2006
YEAR ENDED MARCH 31,
6.500% Senior Notes due April 2008 $350 $350
4.750% Senior Notes due December 2009 500 500
1.625% Convertible Senior Notes due December 2009 460 460
5.625% Senior Notes due December 2014 500 500
Fiscal Year 1999 Senior Notes
In fiscal year 1999, the Company issued $1.75 billion of unsecured Senior Notes in a transaction pursuant to Rule 144A under
the Securities Act of 1933 (Rule 144A). Amounts borrowed, rates, and maturities for each issue were $575 million at 6.25%
102