Dollar General 2012 Annual Report Download - page 115

10-K
Credit Facilities
Overview. The Credit Facilities consist of the $1.964 billion Term Loan Facility and the ABL
Facility which has a maximum of $1.2 billion (of which up to $350.0 million is available for letters of
credit), subject to borrowing base availability. The ABL Facility includes borrowing capacity available
for letters of credit and for short-term borrowings referred to as swingline loans.
We amended the Term Loan Facility and the ABL Facility in March 2012. The amendment of the
Term Loan Facility resulted in the extension of the maturity on $879.7 million of the Term Loan
Facility to July 6, 2017. The remaining $1.08 billion of the Term Loan Facility will mature on July 6,
2014. The applicable margin for borrowings under the Term Loan Facility remains unchanged. The
amendment of the ABL Facility extended the maturity of the ABL Facility to July 6, 2014, and
increased the total commitment to $1.2 billion.
Interest Rates and Fees. Borrowings under the Credit Facilities bear interest at a rate equal to an
applicable margin plus, at our option, either (a) LIBOR or (b) a base rate (which is usually equal to
the prime rate). The applicable margin for borrowings under the Term Loan Facility is 2.75% for
LIBOR borrowings and 1.75% for base-rate borrowings. The interest rate for borrowings under the
Term Loan Facility was 3.0% (without giving effect to the market rate swaps discussed below) as of
February 1, 2013.
As of February 1, 2013, the applicable margin for borrowings under the ABL Facility was 1.50%
for LIBOR borrowings and 0.50% for base-rate borrowings, and the commitment fee to the lenders for
any unutilized commitments was 0.375% per annum. See Item 7A. ‘‘Quantitative and Qualitative
Disclosures About Market Risk’’ below for a discussion of our use of interest rate swaps to manage our
interest rate risk.
Prepayments. The senior secured credit agreement for the Term Loan Facility requires us to
prepay outstanding term loans, subject to certain exceptions, with:
• up to 50% of our annual excess cash flow (as defined in the credit agreement) if our total net
leverage ratio were to exceed 5.0 to 1.0;
• 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of
property in excess of $25.0 million in the aggregate and subject to our right to reinvest the
proceeds; and
• 100% of the net cash proceeds of any incurrence of debt, other than proceeds from debt
permitted under the senior secured credit agreement.
The mandatory prepayments discussed above will be applied to the Term Loan Facility as directed
by the senior secured credit agreement. No prepayments have been required under the prepayment
provisions listed above. The Term Loan Facility can be prepaid in whole or in part at any time.
In addition, the senior secured credit agreement for the ABL Facility requires us to prepay the
ABL Facility, subject to certain exceptions, as follows:
• With 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions
of Revolving Facility Collateral (as defined below) in excess of $1.0 million in the aggregate and
subject to our right to reinvest the proceeds; and
• To the extent such extensions of credit exceed the then current borrowing base (as defined in
the senior secured credit agreement for the ABL Facility).
The mandatory prepayments discussed above will be applied to the ABL Facility as directed by the
senior secured credit agreement for the ABL Facility. No prepayments have been required under the
prepayment provisions listed above.
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