Dollar Tree 2015 Annual Report Download - page 51

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Lease Financing
Operating lease obligations. Our operating lease obligations are primarily for payments under noncancelable store
leases. The commitment includes amounts for leases that were signed prior to January 30, 2016 for stores that were not yet
open on January 30, 2016.
Long-term Borrowings
Acquisition Notes. In February 2015, a wholly-owned subsidiary of ours (the "Escrow Issuer") completed the offering of
$750.0 million aggregate principal amount of 5.25% senior notes due March 1, 2020 (the “2020 Notes”) and $2.5 billion
aggregate principal amount of 5.75% senior notes due March 1, 2023 (the “2023 Notes”, and together with the 2020 Notes, the
“Acquisition Notes”). The Acquisition Notes were offered only to qualified institutional buyers in reliance on Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States, only to non-U.S. investors
pursuant to Regulation S under the Securities Act. The Acquisition Notes have not been registered under the Securities Act or
any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an
applicable exemption from registration requirements or a transaction not subject to the registration requirements of the
Securities Act or any state securities laws. We used the proceeds of the Acquisition Notes to finance in part the Acquisition.
On the Acquisition Date, the Escrow Issuer merged with us and we assumed the obligations in respect of the Acquisition Notes.
Interest on the Acquisition Notes is due semiannually on March 1 and September 1, and commenced on September 1, 2015.
For complete terms of the Acquisition Notes please see "Note 6 - Long-Term Debt" in "Item 8. Financial Statements and
Supplementary Data" beginning on page 63 of this Form 10-K.
Credit Facility and Term Loans. On March 9, 2015, the Escrow Issuer 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 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 of our assets and those of the Credit Agreement Guarantors, subject to certain exceptions.
On June 11, 2015, the Escrow Issuer 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. 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%) subject to a "LIBOR floor" of 0.75%. The Term B-2 Loans bear interest at a fixed rate of
4.25%.
On January 26, 2016, we prepaid $1.0 billion of the $3.3 billion Term B-1 Loan. For complete terms of the Credit Facility
and Term Loans please see "Note 6 - Long-Term Debt" in "Item 8. Financial Statements and Supplementary Data" beginning
on page 63 of this Form 10-K.
Secured Senior Notes. We assumed the liability for $300.0 million of 5.0% senior notes due February 1, 2021 which were
issued by Family Dollar on January 28, 2011 through a public offering. These unsecured notes became secured upon closing of
the Acquisition. These notes are equally and ratably secured with the Term Loans.
Forgivable promissory note. In 2012, we entered into a promissory note with the state of Connecticut under which the
state loaned us $7.0 million in connection with our acquisition, construction and installation of land, building, machinery and
equipment for our distribution facility in Windsor, Connecticut. If certain performance targets are met, the loan and any
accrued interest will be forgiven in fiscal 2017. If the performance targets are not met, the loan and accrued interest must be
repaid over a five-year period beginning in fiscal 2017.
Interest on long-term borrowings. These amounts represent interest payments on the Acquisition Notes, Term Loans,
Senior Secured Notes and Forgivable Promissory Note using the interest rates for each at January 30, 2016.