Dollar General 2012 Annual Report Download - page 152

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Current and long-term obligations (Continued)
remains unchanged. The Company capitalized $5.2 million of debt issue costs associated with the
amendment.
On October 9, 2012, the Credit Facilities were further amended to add additional capacity for the
Company to repurchase, redeem or otherwise acquire shares of its capital stock, not to exceed
$250.0 million. The Company incurred a fee of $1.7 million associated with these amendments which is
included in Other (income) expense in the consolidated statement of income for the year ended
February 1, 2013. The Company was reimbursed for these fees as further discussed in Note 12.
Borrowings under the Credit Facilities bear interest at a rate equal to an applicable margin plus, at
the Company’s option, either (a) LIBOR or (b) a base rate (which is usually equal to the prime rate).
The applicable margin for borrowings as of February 1, 2013 and February 3, 2012 was (i) under the
Term Loan, 2.75% for LIBOR borrowings and 1.75% for base-rate borrowings and (ii) under the ABL
Facility, 1.50% for LIBOR borrowings and 0.50% for base-rate borrowings. At February 3, 2012, prior
to the amendment discussed above, the ABL Facility also had a ‘‘last out’’ tranche of $101.0 million for
which the applicable margin was 2.25% for LIBOR borrowings and 1.25% for base rate borrowings.
The applicable margins for borrowings under the ABL Facility are subject to adjustment each quarter
based on average daily excess availability under the ABL Facility. The Company also must pay
customary letter of credit fees. The interest rate for borrowings under the Term Loan Facility was 3.0%
and 3.1% (without giving effect to the interest rate swaps discussed in Note 8), as of February 1, 2013
and February 3, 2012, respectively.
The senior secured credit agreement for the Term Loan Facility requires the Company to prepay
outstanding term loans, subject to certain exceptions, with percentages of excess cash flow, proceeds of
non-ordinary course asset sales or dispositions of property, and proceeds of incurrences of certain debt.
In addition, the senior secured credit agreement for the ABL Facility requires the Company to prepay
the ABL Facility, subject to certain exceptions, with proceeds of non-ordinary course asset sales or
dispositions of property and any borrowings in excess of the then current borrowing base. The Term
Loan Facility can be prepaid in whole or in part at any time. No prepayments have been required
under the prepayment provisions listed above through February 1, 2013.
All obligations under the Credit Facilities are unconditionally guaranteed by substantially all of the
Company’s existing and future domestic subsidiaries (excluding certain immaterial subsidiaries and
certain subsidiaries designated by the Company under the Credit Facilities as ‘‘unrestricted
subsidiaries’’).
All obligations and guarantees of those obligations under the Term Loan Facility are secured by,
subject to certain exceptions, a second-priority security interest in all existing and after-acquired
inventory and accounts receivable; a first priority security interest in substantially all of the Company’s
and the guarantors’ tangible and intangible assets (other than the inventory and accounts receivable
collateral); and a first-priority pledge of the capital stock held by the Company. All obligations under
the ABL Facility are secured by all existing and after-acquired inventory and accounts receivable,
subject to certain exceptions.
The Credit Facilities contain certain covenants, including, among other things, covenants that limit
the Company’s ability to incur additional indebtedness, sell assets, incur additional liens, pay dividends,
make investments or acquisitions, or repay certain indebtedness.
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