First Data 2009 Annual Report Download - page 72

FIRST DATA CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
related to $60 million drawn on the senior secured revolving credit facility as well as timing of draws and
payments on credit lines associated with settlement activity. The source of cash in the predecessor period from
January 1, 2007 through September 24, 2007 related to timing of draws and payments on credit lines associated
with settlement activity.
The Company has a senior secured revolving credit facility that currently has commitments from
nondefaulting financial institutions to provide $1,769.4 million of credit. The Company had no amount
outstanding against the revolving credit facility as of December 31, 2009 and $18.0 million outstanding against
the revolving credit facility as of December 31, 2008, representing an incremental use of cash of $18.0 million.
As of December 31, 2009, $1,729.8 million remained available under this facility after considering the letters of
credit issued under it.
The Company utilizes its revolving credit facility on a short-term basis to fund investing or operating
activities when cash flows from operating activities are not sufficient. The Company believes the capacity under
its senior secured revolving credit facility is sufficient to meet its short-term liquidity needs. The senior secured
revolving credit facility can be used for working capital and general corporate purposes. There are multiple
institutions that have nondefaulting commitments under this facility with none representing more than
approximately 17% of the remaining capacity.
The Company had a $1.5 billion commercial paper program in the 2007 predecessor period that was issued
under a $1.5 billion revolving credit facility, both of which terminated in conjunction with the merger.
Proceeds from Issuance of Long-Term Debt
On September 24, 2007, the Company entered into several debt instruments in conjunction with the merger.
Details of each instrument are described in Note 9 to the Consolidated Financial Statements included in Item 8 of
this Form 10-K.
In 2008, the Company received $100.4 million from its senior secured term loan facility as a result of a
draw on the Company’s delayed draw term loan when an equal amount of pre-merger notes were repaid. As of
December 31, 2008, the Company’s ability to draw on its delayed draw term loan expired.
The Company received $21.2 billion, net of debt issuance costs, in the successor period from September 25,
2007 through September 30, 2007 resulting from debt issued in conjunction with the merger. Also in the
successor 2007 period, the Company received $25.6 million from its senior secured term loan facility as a result
of a draw on the Company’s delayed draw term loan when an equal amount of pre-merger notes were repaid.
The adverse economic conditions experienced in the U.S. and around the world in 2008 and 2009 impacted
the Company’s results of operations and as a result, have impacted the Company’s debt ratings. As of March 10,
2010, the Company’s long-term corporate family rating from Moody’s was B3 (stable). The long-term local
issuer credit rating from Standard and Poor’s was B (stable). The long-term issuer default rating from Fitch was
B (stable). Additionally, the current economic conditions and the Company’s current level of debt may impair the
ability of the Company to get additional funding beyond its revolving credit facility if needed.
Principal Payments on Long-Term Debt
During 2009, 2008 and the successor 2007 period, the Company made payments of $129.0 million, $128.4
million and $32.0 million related to its senior secured term loan facility, respectively and $34.1 million in debt
restructuring fees in both 2009 and 2008.
72