Dollar General 2013 Annual Report Download - page 147

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Current and long-term obligations (Continued)
On April 11, 2013, the Company consummated a refinancing pursuant to which it terminated its
existing senior secured credit agreements, entered into a new five-year unsecured credit agreement, and
issued senior notes due in 2018 and 2023 as described in more detail below. The Company’s new senior
unsecured credit facilities (the ‘‘Facilities’’) consist of a $1.0 billion senior unsecured term loan facility
(the ‘‘Term Facility’’) and an $850.0 million senior unsecured revolving credit facility (the ‘‘Revolving
Facility’’), which provides for the issuance of letters of credit up to $250.0 million. The Company may
request, subject to agreement by one or more lenders, increased revolving commitments and/or
incremental term loan facilities in an aggregate amount of up to $150.0 million. The Term Facility will
amortize in quarterly installments of $25.0 million, with the first such payment due on August 1, 2014,
and final payment at maturity on April 11, 2018. The Company capitalized $5.9 million of debt issuance
costs associated with the Facilities which is included in long-term Other assets, net in the consolidated
balance sheet.
Borrowings under the 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 January 31, 2014 was 1.275% for LIBOR borrowings and
0.275% for base-rate borrowings. The Company must also pay a facility fee on any used and unused
amounts of the Facilities, as well as letter of credit fees. The applicable margins for borrowings, the
facility fees and the letter of credit fees under the Facilities are subject to adjustment each quarter
based on the Company’s long-term senior unsecured debt ratings. The weighted average interest rate
for borrowings under the Facilities was 1.46% (without giving effect to the interest rate swaps discussed
in Note 7) as of January 31, 2014.
The Facilities can be prepaid in whole or in part at any time. The Facilities contain certain
covenants which place limitations on the incurrence of liens; change of business; mergers or sales of all
or substantially all assets; and subsidiary indebtedness, among other limitations. The Facilities also
contain financial covenants which require the maintenance of a minimum fixed charge coverage ratio
and a maximum leverage ratio. As of January 31, 2014, the Company was in compliance with all such
covenants. The Facilities also contain customary affirmative covenants and events of default.
As of January 31, 2014, the Company had total outstanding letters of credit of $49.9 million,
$27.2 million of which were under the Revolving Facility, and borrowing availability under the
Revolving Facility was $822.8 million.
In connection with the refinancing discussed above, the Company terminated its senior secured
term loan facility and senior secured revolving credit facility (‘‘ABL Facility’’). The Company recorded a
pretax loss of $18.9 million for the write off of debt issuance costs associated with those facilities, which
is reflected in Other (income) expense in the consolidated statement of income for the year ended
January 31, 2014.
On July 12, 2012, the Company issued $500.0 million aggregate principal amount of 4.125% senior
notes due 2017 (the ‘‘2017 Senior Notes’’) which mature on July 15, 2017. Interest on the 2017 Senior
Notes is payable in cash on January 15 and July 15 of each year, and commenced on January 15, 2013.
On April 11, 2013, the Company issued $400.0 million aggregate principal amount of 1.875%
senior notes due 2018 (the ‘‘2018 Senior Notes’’), net of discount of $0.5 million, which mature on
April 15, 2018; and issued $900.0 million aggregate principal amount of 3.25% senior notes due 2023
(the ‘‘2023 Senior Notes’’), net of discount of $2.4 million, which mature on April 15, 2023.
70
10-K