Sunbeam 2011 Annual Report Download - page 25

23
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2011
CAPITAL RESOURCES
In March 2011, the Company completed the Facility, which is comprised of:
• a $525 million senior secured term loan A facility maturing in March 2016, that bears interest at LIBOR plus a spread of 225
basis points;
• a $500 million senior secured term loan B facility maturing in January 2017, which is subject to extension to 2018 under
certain conditions, that bears interest at LIBOR plus a spread of 300 basis points; and
• a $250 million senior secured revolving credit facility (the “Revolver”), which is comprised of a $175 million U.S. dollar
component and a $75 million multi-currency component. The Revolver matures in March 2016 and bears interest at
certain selected rates, including LIBOR plus a spread of 225 basis points. The Company is required to pay commitment
fees on the unused balance of the Revolver. At December 31, 2011, the annual commitment fee on unused balances was
approximately 0.38%.
The proceeds from the Facility and cash on hand were used to extinguish the entire principal amount outstanding of approximately
$1.1 billion under the Company’s prior senior secured credit facility and the entire principal amount outstanding of approximately
$22 million under a U.S. dollar-based term loan of a Canadian subsidiary. As a result of these debt extinguishments, the Company
recorded a $12.8 million loss on the extinguishment of debt, which is primarily comprised of a non-cash charge due to the write-off
of deferred debt issuance costs relating to the prior senior secured credit facility.
At December 31, 2011, there was no amount outstanding under the Revolver. At December 31, 2011, net availability under the
Revolver was approximately $210 million, after deducting approximately $40 million of outstanding standby and commercial
letters of credit.
At December 31, 2011, the Company’s $300 million receivables purchase agreement (the “Securitization Facility”) had outstanding
borrowings totaling $300 million. At December 31, 2011, the borrowing rate margin and the unused line fee on the securitization
were 1.25% and 0.625% per annum, respectively. In February 2012, the Company entered into an amendment to the Securitization
Facility that, in part, increased maximum borrowings from $300 million to $400 million and extended the term until February 2015.
Following the renewal, the borrowing rate margin is 0.90% and the unused line fee is 0.45% per annum.
Certain foreign subsidiaries of the Company maintain working capital lines of credit with their respective local financial institutions
for use in operating activities. At December 31, 2011, the aggregate amount available under these lines of credit totaled
approximately $71 million.
The Company was not in default of any of its debt covenants (see Note 9 to the consolidated financial statements) as of
December 31, 2011.
In August 2011, the Board authorized a new stock repurchase program that would allow the Company to repurchase up to $500
million of its common stock (the “Stock Repurchase Program”). During August 2011, the Company completed its prior $150 million
stock repurchase program that was authorized in November 2007 and increased in March 2010. During 2011 and 2010, the Company
repurchased approximately 2.5 million and 1.4 million shares, respectively, of its common stock under these stock repurchase
programs at a per share average price of $30.42 and $29.62, respectively. There were no shares repurchased in 2009.
On January 26, 2012, the Company commenced a “modified Dutch auction” self-tender offer (the “Offer”) to purchase up to $500
million in value of its common stock at a purchase price of not greater than $33.00 or less than $30.00 per share. On February 21,
2012, the Company extended the expiration date of the Offer from midnight on February 23, 2012 until midnight on March 5, 2012
and increased the purchase price to not greater than $36.00 or less than $32.00 per share. The repurchase of shares of common
stock under the Offer is being made pursuant to the Stock Repurchase Program, pursuant to which the Company is authorized to
repurchase up to $500 million aggregate amount of outstanding shares of common stock at prevailing market prices or in privately-
negotiated transactions. On January 23, 2012, the Board authorized an increase in the then available repurchase capacity of the
Stock Repurchase Program to $500 million. The Offer is not conditioned upon any minimum number of shares being tendered, but
is subject to the satisfaction of certain conditions as specified in the Offer, including the successful completion of additional debt
under the Facility. The Company expects to fund the Offer from a combination of cash on hand and new debt.