Rayovac 2012 Annual Report Download - page 109

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SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(In thousands, except per share amounts)
under that facility. Spectrum Brands and its wholly owned domestic subsidiaries are the borrowers under the
ABL Facility and SB/RH Holdings, LLC is a guarantor of that facility.
Term Loan
On December 15, 2011 and June 14, 2012, the Company amended its Term Loan. As a result, the aggregate
incremental amount by which the Company, subject to compliance with financial covenants and certain other
conditions, may increase the amount of the commitment under the Term Loan has been increased from $100,000
to $250,000. Certain covenants in respect to indebtedness, liens and interest coverage were also amended to
provide for dollar limits more favorable to the Company and, subject to compliance with financial covenants and
certain other conditions, to allow for the incurrence of incremental unsecured indebtedness.
On February 1, 2011, the Company completed the refinancing of its Term Loan, which was initially
established in connection with the Merger and had an aggregate amount outstanding of $680,000 upon
refinancing, with an amended and restated credit agreement. In connection with the refinancing, the Term Loan
was issued at par with a maturity date of June 17, 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
interest at a rate per annum equal to, at the Company’s option, the LIBO rate (adjusted for statutory reserves)
subject to a 1.00% floor plus a margin equal to 4.00%, or an alternate base rate plus a margin equal to 3.00%.
The Term Loan 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 Term Loan contains customary restrictive covenants, including, but not
limited to, restrictions on the Company’s 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, the Company and its domestic subsidiaries have
guaranteed the respective obligations under the Term Loan and related loan documents and have pledged
substantially all of their respective assets to secure such obligations. The Term Loan also provides for customary
events of default, including payment defaults and cross-defaults on other material indebtedness.
In connection with the amendments, the Company recorded $792 of fees in connection with the Term Loan
during Fiscal 2012. 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 Term Loan. In connection with the amendments, the Company also recorded cash charges of $531 as an
increase to interest expense during Fiscal 2012. In connection with voluntary prepayments of $150,000 of the
Term Loan during Fiscal 2012, the Company recorded accelerated amortization of portions of the unamortized
discount totaling $2,824 as an adjustment to increase interest expense.
The Company recorded $10,545 of fees in connection with the refinancing of the Term Loan during Fiscal
2011. 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 Term
Loan. In connection with the refinancing, included in Fiscal 2011 Interest expense are cash charges of $4,954 and
accelerated amortization of portions of the unamortized discount and unamortized Debt issuance costs totaling
$24,370. In connection with voluntary prepayments of $220,000 of the Term Loan during Fiscal 2011, the
Company recorded cash charges of $700 and accelerated amortization of portions of the unamortized discount
and unamortized Debt issuance costs totaling $7,521 as an adjustment to increase interest expense.
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