Rayovac 2010 Annual Report Download - page 85

million in aggregate principal amount of 9.5% Notes and (iii) entered into the $300 million ABL Revolving
Credit Facility. The proceeds from the Senior Secured Facilities were used to repay our then-existing senior term
credit facility (the “Prior Term Facility”) and our then-existing asset based revolving loan facility, to pay fees and
expenses in connection with the refinancing and for general corporate purposes.
The 9.5% Notes and 12% Notes were issued by Spectrum Brands. SB/RH Holdings, LLC, a wholly-owned
subsidiary of SB Holdings, and the wholly owned domestic subsidiaries of Spectrum Brands are the guarantors
under the 9.5% Notes. The wholly owned domestic subsidiaries of Spectrum Brands are the guarantors under the
12% Notes. SB Holdings is not an issuer or guarantor of the 9.5% Notes or the 12% Notes. SB Holdings is also
not a borrower or guarantor under the Company’s Term Loan or the ABL Revolving Credit Facility. Spectrum
Brands is the borrower under the Term Loan and its wholly owned domestic subsidiaries along with SB/RH
Holdings, LLC are the guarantors under that facility. Spectrum Brands and its wholly owned domestic
subsidiaries are the borrowers under the ABL Revolving Credit Facility and SB/RH Holdings, LLC is a guarantor
of that facility.
Senior Term Credit Facility
The Term Loan has a maturity date of June 16, 2016. Subject to certain mandatory prepayment events, the
Term Loan is subject to repayment according to a scheduled amortization, with the final payment of all amounts
outstanding, plus accrued and unpaid interest, due at maturity. Among other things, the Term Loan provides for a
minimum Eurodollar interest rate floor of 1.5% and interest spreads over market rates of 6.5%.
The Senior Credit Agreement contains financial covenants with respect to debt, including, but not limited to,
a maximum leverage ratio and a minimum interest coverage ratio, which covenants, pursuant to their terms,
become more restrictive over time. In addition, the Senior Credit Agreement contains customary restrictive
covenants, including, but not limited to, restrictions on our ability to incur additional indebtedness, create liens,
make investments or specified payments, give guarantees, pay dividends, make capital expenditures and merge
or acquire or sell assets. Pursuant to a guarantee and collateral agreement, we and our domestic subsidiaries have
guaranteed their respective obligations under the Senior Credit Agreement and related loan documents and have
pledged substantially all of their respective assets to secure such obligations. The Senior Credit Agreement also
provides for customary events of default, including payment defaults and cross-defaults on other material
indebtedness.
The Term Loan was issued at a 2.00% discount and was recorded net of the $15 million amount incurred.
The discount will be amortized as an adjustment to the carrying value of principal with a corresponding charge to
interest expense over the remaining life of the Senior Credit Agreement. During Fiscal 2010, we recorded $26
million of fees in connection with the Senior Credit Agreement. The fees are classified as Debt issuance costs
and will be amortized as an adjustment to interest expense over the remaining life of the Senior Credit
Agreement.
At September 30, 2010, the aggregate amount outstanding under the Term Loan totaled $750 million.
At September 30, 2009, the aggregate amount outstanding under the Prior Term Facility totaled a
U.S. Dollar equivalent of $1,391 million, consisting of principal amounts of $973 million under the U.S. Dollar
Term B Loan, €255 million under the Euro Facility ($372 million at September 30, 2009) as well as letters of
credit outstanding under the L/C Facility totaling $46 million.
At September 30, 2010, we were in compliance with all covenants under the Senior Credit Agreement.
9.5% Notes
At September 30, 2010, we had outstanding principal of $750 million under the 9.5% Notes maturing
June 15, 2018.
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