First Data 2013 Annual Report Download - page 89

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FDC’s publicly tradable 11.25% senior subordinated notes due March 31, 2016 require the payment of interest semi-annually on March 31 and
September 30.
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On May 30, 2013, FDC issued $750 million aggregate principal amount of 11.75% senior unsecured subordinated notes due August 15, 2021.
Interest on the notes will be payable in cash semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. FDC used the
proceeds from the offering, together with cash on hand, to redeem and repurchase a portion of its outstanding 11.25% senior unsecured subordinated notes
due 2016 as described above, and to pay related fees and expenses.
On November 19, 2013, FDC issued and sold $1.0 billion aggregate principal amount of additional 11.75% senior unsecured subordinated notes due
August 15, 2021. The additional notes were treated as a single series with the 11.75% notes issued in May 2013 and have the same terms. FDC used the
proceeds from the issue and sale of the additional notes, together with cash on hand, to redeem $1.0 billion aggregate principal amount of its outstanding
11.25% senior unsecured notes due 2016 described above and to pay related fees and expenses.
FDC may redeem the notes, in whole or in part, at any time prior to May 15, 2016, at a price equal to 100% of the principal amount of the notes
redeemed plus accrued and unpaid interest to the redemption date and a “make-whole premium.” Thereafter, FDC may redeem the notes, in whole or in part,
at established redemption prices. In addition, until May 15, 2016, FDC may redeem up to 35% of the aggregate principal amount of the notes at 111.75%
with the net cash proceeds of one or more equity offerings.
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Deferred financing costs were capitalized in conjunction with certain of FDC’s debt issuances and totaled $176.9 million and $218.2 million, as of
December 31, 2013 and 2012, 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 6 years. In addition, lender fees associated with debt modifications and amendments were capitalized as discounts on the debt and are similarly
being amortized on a straight-line basis over the remaining term of the respective debt.
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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. The
senior secured term loan facility also requires mandatory prepayments based on a percentage of excess cash flow generated by FDC. FDC is in compliance
with all applicable covenants.
All senior secured notes are guaranteed on a senior secured basis by each of FDC’s existing and future direct and indirect wholly owned domestic
subsidiaries that guarantees FDC’s senior secured credit facilities. Each of the guarantees of the notes is a general senior obligation of each guarantor and rank
senior in right of payment to all existing and future subordinated indebtedness of the guarantor subsidiary, including FDC’s existing senior subordinated
notes. The notes rank equal in right of payment with all existing and future senior indebtedness of the guarantor subsidiary but are effectively senior to the
guarantees of FDC’s existing senior unsecured notes and FDC’s existing senior secured second lien notes to the extent of FDC’s and the guarantor subsidiary’s
value of the collateral securing the notes. The 7.375% Senior Secured First Lien Notes, 8.875% Senior Secured First Lien Notes, and 6.75% Senior Secured
First Lien Notes are effectively equal in right of payment with each other and the guarantees of FDC’s senior secured credit facilities. Each series of notes are
effectively subordinated to any obligations secured by liens permitted under the indenture for the particular series of notes and structurally subordinated to any
existing and future indebtedness and other liabilities of any subsidiary of a guarantor that is not also a guarantor of the notes.
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