Dollar Tree 2014 Annual Report Download - page 70

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NOTE 5 - LONG-TERM DEBT
Long-term debt at January 31, 2015 and February 1, 2014 consists of the following:
January 31, February 1,
(in millions) 2015 2014
$750.0 million Senior Notes, $ 750.0 $ 750.0
fixed interest rates payable semi-annually, January 15 and July 15
$750.0 million Unsecured Credit Agreement,
interest payable monthly at LIBOR,
plus 0.90%, which was 1.07% at
January 31, 2015 ——
Demand Revenue Bonds, repaid March 2014 — 12.8
$7.0 million Forgivable Promissory Note, interest payable
beginning in November 2017 at a rate of 1%,
principal payable beginning November 2017 7.0 7.0
Total long-term debt $ 757.0 $ 769.8
Less current portion — 12.8
Long-term debt, excluding current portion $ 757.0 $ 757.0
Maturities of long-term debt are as follows: 2017 - $0.2 million, 2018 - $1.4 million, 2019 - $1.4 million and after 2019 -
$754.0 million
Senior Notes
The Company entered into a Note Purchase Agreement on September 16, 2013 with institutional accredited investors in
which the Company issued and sold $750.0 million of Senior Notes (the "Notes") in an offering exempt from the registration
requirements of the Securities Act of 1933. The Notes consist of three tranches: $300.0 million of 4.03% Senior Notes due
September 16, 2020; $350.0 million of 4.63% Senior Notes due September 16, 2023; and $100.0 million of 4.78% Senior
Notes due September 16, 2025. Interest on the Notes is payable semi-annually on January 15 and July 15 of each year,
beginning January 15, 2014. The Notes are unsecured and rank pari passu in right of repayment with the Company's other
senior unsecured indebtedness. The Company may prepay some or all of the Notes at any time in an amount not less than 5% of
the original aggregate principal amount of the Notes to be prepaid, at a price equal to the sum of (a) 100% of the principal
amount thereof, plus accrued and unpaid interest, and (b) the applicable make-whole amount. In the event of a change in
control (as defined in the Note Purchase Agreement), the Company may be required to prepay the Notes. The Note Purchase
Agreement contains customary affirmative and restrictive covenants. The Company used the net proceeds of the Notes to
finance share repurchases.
On January 20, 2015, the Company entered into the First Amendment (the “ Notes Amendment”) to the Note Purchase
Agreement, with a majority of the noteholders party thereto. The Notes Amendment was entered into in connection with the
Company’s pending acquisition (the “Acquisition”) of Family Dollar Stores, Inc. (“Family Dollar”). The Notes Amendment
will, among other things, allow a newly-formed subsidiary of the Company to issue debt and hold the proceeds in escrow
pending consummation of the Acquisition (such debt, the “Escrow Debt”). Pursuant to the terms of the Notes Amendment, in
certain circumstances the amount of interest due on the Notes may increase by 1.0% per annum. The Notes Amendment also
contains certain negative covenants and other restrictions applicable during the period in which any Escrow Debt is
outstanding.
Unsecured Credit Agreement
In 2012, the Company entered into a five-year Unsecured Credit Agreement (the "Agreement") which provides for a
$750.0 million revolving line of credit, including up to $150.0 million in available letters of credit. The interest rate on the
facility is based, at the Company’s option, on a LIBOR rate, plus a margin, or an alternate base rate, plus a margin. The
revolving line of credit also bears a facilities fee, calculated as a percentage, as defined, of the amount available under the line
of credit, payable quarterly. The Agreement, among other things, requires the maintenance of certain specified financial ratios,
restricts the payment of certain distributions and prohibits the incurrence of certain new indebtedness.
On September 16, 2013, the Company amended the Agreement to enable the issuance of the Notes.