Dollar General 2012 Annual Report Download - page 153

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Current and long-term obligations (Continued)
As of February 1, 2013 and February 3, 2012, the respective letter of credit amounts related to the
ABL Facility were $40.1 million and $38.4 million, and borrowing availability under the ABL Facility
was $873.4 million and $807.9 million, respectively.
On July 12, 2012, the Company issued $500.0 million aggregate principal amount of 4.125% senior
notes due 2017 (the ‘‘Senior Notes’’) which mature on July 15, 2017, pursuant to an indenture dated as
of July 12, 2012 (the ‘‘Senior Indenture’’). The Company capitalized $7.3 million of debt issue costs
associated with the Senior Notes.
Interest on the Senior Notes is payable in cash on January 15 and July 15 of each year,
commencing on January 15, 2013. The Senior Notes are fully and unconditionally guaranteed on a
senior unsecured basis by each of the existing and future direct or indirect domestic subsidiaries that
guarantee the obligations under the Credit Facilities discussed above.
The Company may redeem some or all of the Senior Notes at any time at redemption prices
described or set forth in the Senior Indenture. The Company also may seek, from time to time, to
retire some or all of the Senior Notes through cash purchases in the open market, in privately
negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market
conditions, the Company’s liquidity requirements, contractual restrictions and other factors. The
amounts involved may be material.
Upon the occurrence of a change of control triggering event, which is defined in the Senior
Indenture, each holder of the Senior Notes has the right to require the Company to repurchase some
or all of such holder’s Senior Notes at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the repurchase date.
The Senior Indenture contains covenants limiting, among other things, the ability of the Company
and its restricted subsidiaries to (subject to certain exceptions): consolidate, merge, sell or otherwise
dispose of all or substantially all of the Company’s assets; and incur or guarantee indebtedness secured
by liens on any shares of voting stock of significant subsidiaries.
The Senior Indenture also provides for events of default which, if any of them occurs, would
permit or require the principal of and accrued interest on the Senior Notes to become or to be
declared due and payable.
On July 15, 2012, the Company redeemed the entire $450.7 million outstanding aggregate principal
amount of its 11.875%/12.625% Senior Subordinated Notes due 2017 (the ‘‘Senior Subordinated
Notes’’) at a premium. The pretax loss on this transaction of $29.0 million is reflected in Other
(income) expense in the consolidated statement of income for the year ended February 1, 2013. The
Company funded the redemption price for the Senior Subordinated Notes with proceeds from the
issuance of the Senior Notes.
In April and July 2011, the Company repurchased or redeemed all $864.3 million outstanding
aggregate principal amount of its 10.625% senior notes due 2015 at a premium. The Company funded
the redemption price for the senior notes due 2015 with cash on hand and borrowings under the ABL
Facility. The 2011 redemption and repurchase resulted in pretax losses totaling $60.3 million, which is
reflected in Other (income) expense in the consolidated statement of income for the year ended
February 3, 2012.
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