First Data 2008 Annual Report Download - page 85

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
of the Company's common stock at $40.025 before giving effect to the adjustment for the Company's spin-off of The Western Union Company.
Guarantees and Covenants
All obligations under the senior secured revolving credit facility and senior secured term loan facility are unconditionally guaranteed by substantially all
existing and future, direct and indirect, wholly owned, material domestic subsidiaries of the Company other than Integrated Payment Systems Inc. The senior
secured facilities contain a number of covenants that, among other things, restrict the Company's ability to incur additional indebtedness; create liens; enter
into sale and leaseback transactions; engage in mergers or consolidations; sell or transfer assets; pay dividends and distributions or repurchase the Company's
or its parent company's capital stock; make investments, loans or advances; prepay certain indebtedness; make certain acquisitions; engage in certain
transactions with affiliates; amend material agreements governing certain indebtedness; and change its lines of business. The senior secured facilities also
require the Company to not exceed a maximum senior secured leverage ratio and contain certain customary affirmative covenants and events of default,
including a change of control. The senior secured term loan facility also requires mandatory prepayments based on a percentage of excess cash flow generated
by the Company.
All obligations under the senior publicly tradable notes, senior unsecured cash-pay notes, senior unsecured PIK notes, and senior subordinated
unsecured notes are similarly guaranteed on a subordinated basis in accordance with their terms by each of the Company's domestic subsidiaries that
guarantee obligations under the Company's senior secured term loan facility described above. These notes and facilities also contain a number of covenants
similar to those described for the senior secured term loan facility noted above. The Company is in compliance with all applicable covenants as of
December 31, 2008 and anticipates it will remain in compliance in future periods.
Although the senior secured revolving credit facility, senior secured term loan facility, senior publicly tradable notes, senior unsecured cash-pay notes,
senior unsecured PIK notes, and senior subordinated unsecured notes contain restrictions on the Company's ability to incur additional indebtedness, these
restrictions are subject to numerous qualifications and exceptions, the most significant of which is the ability to incur indebtedness in connection with the
Company's settlement operations. The Company believes that the indebtedness that can be incurred under these exceptions as well as additional credit under
the existing senior secured revolving credit facility are sufficient to satisfy the Company's intermediate and long-term needs.
Covenant Compliance
Under the senior secured revolving credit and term loan facilities and the associated indentures, certain limitations, restrictions and defaults could occur
if the Company is not able to satisfy and remain in compliance with specified financial ratios. The Company has agreed that after October 1, 2008 it will not
permit the Consolidated Senior Secured Debt to Consolidated EBITDA (both as defined in the agreement) Ratio for any 12 month period (last four fiscal
quarters) ending during a period set forth below to be greater than the ratio set forth below opposite such period:
Period Ratio
October 1, 2008 to September 30, 2009 7.25 to 1.00
October 1, 2009 to September 30, 2010 7.00 to 1.00
October 1, 2010 to September 30, 2011 6.75 to 1.00
October 1, 2011 to September 30, 2012 6.50 to 1.00
October 1, 2012 to September 30, 2013 6.25 to 1.00
Thereafter 6.00 to 1.00
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