Dollar Tree 2015 Annual Report Download - page 49

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We used the proceeds of the Acquisition Notes to finance in part the Acquisition. The Acquisition Notes are jointly and
severally guaranteed on an unsecured, unsubordinated basis, subject to certain exceptions, by each of our subsidiaries that
guarantees the obligations under our new senior secured credit facilities or certain other indebtedness, including Family Dollar
and certain of its subsidiaries.
The 2020 notes, which mature on March 1, 2020, were issued pursuant to an indenture, dated as of February 23, 2015, with
U.S. Bank National Association, as trustee (the “2020 Notes Indenture”). The 2023 notes, which mature on March 1, 2023,
were issued pursuant to an indenture, dated as of February 23, 2015, with U.S. Bank National Association, as trustee (the “2023
Notes Indenture”, and together with the 2020 notes indenture, the “Indentures”).
Interest on the Acquisition Notes is due semiannually on March 1 and September 1 of each year and commenced on
September 1, 2015. No principal is due on the Acquisition Notes until their maturity dates.
The Indentures contain covenants that limit our and certain of our subsidiaries ability to, among other things and subject to
certain significant exceptions: (i) incur, assume or guarantee additional indebtedness; (ii) declare or pay dividends or make
other distributions with respect to, or purchase or otherwise acquire or retire for value, equity interests; (iii) make any principal
payment on, or redeem or repurchase, subordinated debt; (iv) make loans, advances or other investments; (v) incur liens; (vi)
sell or otherwise dispose of assets, including capital stock of subsidiaries; (vii) consolidate or merge with or into, or sell all or
substantially all assets to, another person; and (viii) enter into transactions with affiliates. The Indentures also provide for
certain events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any
other monetary obligations on all the then outstanding Acquisition Notes under the applicable indenture to be declared
immediately due and payable.
On March 9, 2015, we entered into a credit agreement, with JPMorgan Chase Bank, N.A., as administrative agent,
providing for $6.2 billion in senior secured credit facilities (the “New Senior Secured Credit Facilities”) consisting of a $1.25
billion revolving credit facility (the “New Revolving Credit Facility”) and $4.95 billion of term loan facilities (the “New Term
Loan Facilities”). The New Term Loan Facilities consist of a $1.0 billion Term Loan A tranche and a $3.95 billion Term Loan
B tranche. The New Revolving Credit Facility and the borrowings under the Term Loan A tranche mature five years after the
Acquisition Date, unless any of the 2020 Notes remain outstanding as of 91 days prior to their stated maturity, in which case
the New Revolving Credit Facility and the borrowings under the Term Loan A tranche will mature at such time. The
borrowings under the Term Loan B tranche mature seven years after the Acquisition Date.
Upon the consummation of the Acquisition, we drew the term loans under the Term Loan A facility and have the ability to
borrow under the New Revolving Credit Facility.
On June 11, 2015, we amended the terms of the New Senior Secured Credit Facilities to refinance the Term Loan B tranche
with $3.3 billion of floating-rate Term B-1 Loans and $650.0 million of fixed-rate Term B-2 Loans. On January 26, 2016, we
prepaid $1.0 billion of the $3.3 billion Term B-1 Loan.
The New Senior Secured Credit Facilities were not guaranteed by us or any of our subsidiaries prior to the consummation
of the Acquisition, but upon and after the Acquisition Date, the New Senior Secured Credit Facilities are guaranteed by certain
of our direct or indirect wholly owned U.S. subsidiaries, including Family Dollar and certain of its subsidiaries (collectively,
the “Credit Agreement Guarantors”). Upon and after the Acquisition Date, the New Senior Secured Credit Facilities are secured
by a security interest in substantially all the assets of Dollar Tree and the Credit Agreement Guarantors, subject to certain
exceptions.
The loans under the Term Loan A tranche and the New Revolving Credit Facility bear interest at LIBOR plus 2.25% per
annum (or a base rate plus 1.25%), the Term B-1 Loans of the New Senior Secured Credit Facilities bear interest at LIBOR plus
2.75% per annum (or a base rate plus 1.75%) and the Term B-2 Loans bear interest at a fixed rate of 4.25%. The Term B-1
tranche is subject to a “LIBOR floor” of 0.75%. The Term Loan A tranche of the New Term Loan Facilities requires quarterly
amortization payments of 1.25% of the original principal amount thereof in the first year following the Acquisition Date, 2.5%
of the original principal amount thereof in the second year following the Acquisition Date, and 3.75% of the original principal
amount thereof thereafter. The Term B-1 Loans require quarterly amortization payments of 0.25% of the original principal
amount thereof after the Acquisition Date and the Term B-2 Loans do not require amortization payments prior to maturity. The
New Term Loan Facilities, excluding the Term B-2 Loans, also require mandatory prepayments in connection with certain asset
sales and out of excess cash flow, among other things, and subject in each case to certain significant exceptions. We expect to
pay certain commitment fees in connection with the New Revolving Credit Facility. Additionally, the Term B-1 Loans will
require us to pay a 1.0% prepayment fee if the loans thereunder are subject to certain repricing transactions before June 11,
2016. The Term B-2 Loans will require us to pay a 2.0% prepayment fee if they are repaid in the second year after the
refinance date and a 1.0% prepayment fee if they are repaid in the third year after the refinance date.