Neiman Marcus 2010 Annual Report Download - page 42
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Table of Contents
Senior Notes. In May 2011, NMG repurchased and cancelled $689.2 million principal amount of the Senior Notes through a
tender offer and redeemed the remaining $63.2 million principal amount of notes on June 15, 2011 (after which no Senior Notes
remained outstanding). NMG's payments to holders of the Senior Notes in the tender offer and redemption, taken together, aggregated
approximately $790 million.
Senior Subordinated Notes. NMG has $500.0 million aggregate principal amount of 10.375% Senior Subordinated Notes
under a senior subordinated indenture (Senior Subordinated Indenture). NMG's Senior Subordinated Notes mature on October 15,
2015.
See Note 6 of the Notes to Consolidated Financial Statements in Item 15 for a further description of the terms of the Senior
Subordinated Notes.
Interest Rate Swaps. In connection with the Acquisition, we entered into $2,575.0 million of floating rate debt obligations,
of which $2,125.0 million was outstanding at the Acquisition Date and $2,060.0 million was outstanding at July 30, 2011. Effective
December 2005, NMG entered into floating to fixed interest rate swap agreements for an aggregate notional amount of
$1,000.0 million to limit our exposure to interest rate increases related to a portion of our floating rate indebtedness. These swap
agreements hedged a portion of our contractual floating rate interest commitments through the expiration of the agreements in
December 2010.
Interest Rate Caps. Effective January 2010, NMG entered into interest rate cap agreements for an aggregate notional amount
of $500.0 million in order to hedge the variability of our cash flows related to a portion of our floating rate indebtedness once the
interest rate swap expired in December 2010. The interest rate cap agreements commenced in December 2010 and will expire in
December 2012. Pursuant to the interest rate cap agreements, NMG has capped LIBOR at 2.50% through December 2012 with
respect to the $500.0 million notional amount of such agreements. In the event LIBOR is less than 2.50%, NMG will pay interest at
the lower LIBOR rate. In the event LIBOR is higher than 2.50%, NMG will pay interest at the capped rate of 2.50%.
In August 2011, NMG entered into additional interest rate cap agreements for an aggregate notional amount of $1,000.0
million in order to hedge the variability of our cash flows related to a portion of our floating rate indebtedness once the current interest
rate cap agreements expire in December 2012. The interest rate cap agreements cap LIBOR at 2.50% from December 2012 through
December 2014 with respect to the $1,000.0 million notional amount of such agreements.
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