Rayovac 2011 Annual Report Download - page 120

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(In thousands, except per share amounts)
In connection with the Merger, the Company obtained the consent of the note holders to certain amendments
to the 2019 Indenture (the “Supplemental Indenture”). The Supplemental Indenture became effective upon the
closing of the Merger. Among other things, the Supplemental Indenture amended the definition of change in
control to exclude the Harbinger Capital Partners Master Fund I, Ltd. (“Harbinger Master Fund”), Harbinger
Capital Partners Special Situations Fund, L.P. (“Harbinger Special Fund”) and, together with Harbinger Master
Fund, the “HCP Funds”), Global Opportunities Breakaway Ltd. (together with the HCP Funds, the “Harbinger
Parties”), and their respective affiliates and increased the Company’s ability to incur indebtedness up to
$1,850,000.
During Fiscal 2010, the Company recorded $2,966 of fees in connection with the consent. The fees are
classified as Debt issuance costs within the accompanying Consolidated Statements of Financial Position and are
amortized as an adjustment to interest expense over the remaining life of the 12% Notes effective with the
closing of the Merger.
ABL Revolving Credit Facility
On April 21, 2011 the Company amended the ABL Revolving Credit Facility. The amended facility carries an
interest rate, at the Company’s option, which is subject to change based on availability under the facility, of
either: (a) the base rate plus currently 1.25% per annum or (b) the reserve-adjusted LIBO rate (the “Eurodollar
Rate”) plus currently 2.25% per annum. No amortization is required with respect to the ABL Revolving Credit
Facility. The ABL Revolving Credit Facility is scheduled to expire on April 21, 2016.
The ABL Revolving Credit Facility is governed by a credit agreement (the “ABL Credit Agreement”) with
Bank of America as administrative agent (the “Agent”). The ABL Revolving Credit Facility consists of revolving
loans (the “Revolving Loans”), with a portion available for letters of credit and a portion available as swing line
loans, in each case subject to the terms and limits described therein.
The Revolving Loans may be drawn, repaid and re-borrowed without premium or penalty. The proceeds of
borrowings under the ABL Revolving Credit Facility are to be used for costs, expenses and fees in connection
with the ABL Revolving Credit Facility, working capital requirements of the Company and its subsidiaries,
restructuring costs, and for other general corporate purposes.
The ABL Credit Agreement contains various representations and warranties and covenants, including,
without limitation, enhanced collateral reporting, and a maximum fixed charge coverage ratio. The ABL Credit
Agreement also provides for customary events of default, including payment defaults and cross-defaults on other
material indebtedness.
During Fiscal 2010, the Company recorded $9,839 of fees in connection with the ABL Revolving Credit
Facility. During Fiscal 2011, the Company recorded $2,071 of fees in connection with the amendment. The fees
are classified as Debt issuance costs within the accompanying Consolidated Statements of Financial Position and
are amortized as an adjustment to interest expense over the remaining life of the ABL Revolving Credit Facility.
Pursuant to the credit and security agreement, the obligations under the ABL credit agreement are secured by
certain current assets of the guarantors, including, but not limited to, deposit accounts, trade receivables and
inventory.
As a result of borrowings and payments under the ABL Revolving Credit Facility at September 30, 2011,
the Company had aggregate borrowing availability of approximately $176,612, net of lender reserves of $48,769
and outstanding letters of credit of $32,962.
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