First Data 2010 Annual Report Download - page 99

Table of Contents
FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
("registration default"), the annual interest rate on the 12.625% senior notes will increase by 0.25%. The annual interest rate on the 12.625% senior notes will
increase by an additional 0.25% for each subsequent 90-day period during which the registration default continues, up to a maximum additional interest rate
of 0.50% per year. FDC may subsequently cure the registration default and the applicable interest rate on the unsecured notes will revert to the original rate.
The 12.625% senior notes are similar in rank to FDC's other senior notes described below. FDC may redeem the senior notes, in whole or in part, at any
time prior to January 15, 2016, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest to the redemption date and a
"make-whole premium." Thereafter, FDC may redeem the senior notes, in whole or in part, at established redemption prices. In addition, on or prior to
January 15, 2014, FDC may redeem up to 35% of the aggregate principal amount of the notes with the net cash proceeds from certain equity offerings at
established redemption prices.
Deferred Financing Costs
Deferred financing costs were capitalized in conjunction with certain of FDC's debt issuances and totaled $331.3 million and $411.2 million, as of
December 31, 2010 and 2009, respectively. Deferred financing costs are reported in the "Other long-term assets" line of the Consolidated Balance Sheets and
are being amortized on a straight-line basis, which approximates the interest method, over the remaining term of the respective debt, with a weighted-average
period of 5 years.
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 FDC other than Integrated Payment Systems Inc. The senior secured
facilities contain a number of covenants that, among other things, restrict FDC'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 FDC'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 FDC to not
exceed a maximum senior secured leverage ratio and contain certain customary affirmative covenants and events of default, including a change of control.
FDC is in compliance with all applicable covenants.
All obligations under the senior secured notes, senior second lien notes, PIK toggle senior second lien notes, senior notes, senior PIK notes and senior
subordinated notes are similarly guaranteed in accordance with their terms by each of FDC's domestic subsidiaries that guarantee obligations under FDC'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 obligations noted above. FDC is in compliance with all applicable covenants.
Other
In June 2010, FDC paid off its 4.50% notes due 2010 for $13.1 million.
In 2009, FDC paid off its 3.90% Note due in 2009 for $10.7 million.
In December 2008, FDC repurchased debt as follows:
(in millions)
Principal
Amount
Repurchased
3.90% Notes due 2009 $ 4.6
4.50% Notes due 2010 8.3
5.625% Notes due 2011 9.1
4.70% Notes due 2013 3.9
4.85% Notes due 2014 2.9
4.95% Notes due 2015 1.2
$ 30.0
In 2008, FDC recognized a $7.0 million gain in connection with the debt repurchase. Also during 2008, FDC paid off its medium-term note due in 2008
for $13.6 million and its 3.375% Note for $68.1 million also due in 2008.
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