Ingram Micro 2008 Annual Report Download - page 48

require may not be available on terms acceptable to us, or at all, due to the inability of our finance partners to meet
their commitments to us.
We have a revolving trade accounts receivable-backed financing program in the U.S., which provides for up to
$600 million in borrowing capacity secured by substantially all U.S.-based receivables. The interest rate on this
facility is dependent on designated commercial paper rates plus a predetermined margin. At January 3, 2009 and
December 29, 2007, we had borrowings of $69.0 million and $387.5 million, respectively, under this revolving trade
accounts receivable-backed financing program in the U.S. At our option, the program may be increased to as much
as $650 million at any time prior to its maturity date of July 2010.
We have two revolving trade accounts receivable-backed financing facilities in EMEA, which individually
provide for borrowing capacity of up to Euro 107 million, or approximately $148 million, and Euro 230 million, or
approximately $319 million, at January 3, 2009. Both facilities are with a financial institution that has an
arrangement with a related issuer of third-party commercial paper. These European facilities require certain
commitment fees, and borrowings under both facilities incur financing costs at designated commercial paper rates
plus a predetermined margin. At January 3, 2009 and December 29, 2007, we had no borrowings under these
European revolving trade accounts receivable-backed financing facilities. During the fourth quarter of 2008, the
Euro 230 million facility was extended to March 2009 at a reduced borrowing capacity amount of Euro 132 million,
effective in January 2009. The Euro 107 million facility matures in July 2010.
We also have two revolving trade accounts receivable facilities in EMEA, which individually provide for a
maximum borrowing capacity of 60 million British pound sterling, or approximately $87 million, and Euro 90 mil-
lion, or approximately $125 million, respectively, at January 3, 2009. At January 3, 2009 and December 29, 2007,
we had no borrowings outstanding under these European factoring facilities. These facilities mature in March 2010.
We have a multi-currency revolving trade accounts receivable-backed financing facility in Asia-Pacific, which
provides for up to 210 million Australian dollars, or approximately $149 million, at January 3, 2009 of borrowing
capacity. The interest rate is dependent upon the currency in which the drawing is made and is related to the local
short-term bank indicator rate for such currency. At January 3, 2009 and December 29, 2007, we had borrowings of
$29.0 million and $0 under this Asia-Pacific multi-currency revolving accounts receivable-backed financing
facility. During the fourth quarter of 2008, in addition to reducing the borrowing capacity of this facility from its
earlier 250 million Australian dollars capacity, we extended the maturity date to September 2011.
Our ability to access financing under all our trade accounts receivable-backed financing programs, as
discussed above, is dependent upon the level of eligible trade accounts receivable as well as continued covenant
compliance. We may experience a lower level of eligible trade accounts receivable resulting from declines in sales
volumes or failure to meet certain defined eligibility criteria for the trade accounts receivable, such as receivables
remaining assignable and free of liens and dispute or set-off rights. At January 3, 2009, our actual aggregate
available capacity under these programs was approximately $1.29 billion based on eligible trade accounts
receivable available, of which $98.0 million of such borrowing capacity was used. Our two revolving trade
accounts receivable-backed financing facilities in EMEA are affected by the level of market demand for com-
mercial paper, and could be impacted by the credit ratings of the third-party issuer of commercial paper or back-up
liquidity providers, if not replaced. In addition, in certain situations, we could lose access to all or part of our
financing with respect to the EMEA facility maturing in March 2009, if our authorization to collect the receivables
is rescinded by the relevant supplier under applicable local law.
In July 2008, we entered into a $250 million senior unsecured term loan facility with a bank syndicate. The
interest rate on this facility is based on one-month LIBOR, plus a variable margin that is based on our debt ratings
and leverage ratio. Interest is payable monthly. Under the terms of the agreement, we are also required to pay a
minimum of $3.1 million of principal on the loan on a quarterly basis beginning in November 2009 and a balloon
payment of $215.6 million at the end of the loan term in August 2012. The agreement also contains certain negative
covenants, including restrictions on funded debt and interest coverage, as well as customary representations and
warranties, affirmative covenants and events of default. The proceeds of the term loan were used for general
corporate purposes, including refinancing existing indebtedness and funding working capital.
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