Supercuts 2009 Annual Report Download - page 115

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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. FINANCING ARRANGEMENTS (Continued)
Senior Term Notes
Private Shelf Agreement
At June 30, 2009 and 2008, the Company had $239.6 and $255.2 million, respectively, in unsecured, fixed rate, senior term notes
outstanding under a Private Shelf Agreement. The notes require quarterly payments, and final maturity dates range from November 2009 through
December 2017.
The Private Shelf Agreement includes financial covenants including debt to EBITDA ratios, fixed charge coverage ratios and minimum net
equity tests (as defined within the Private Shelf Agreement), as well as other customary terms and conditions. The maturity date for the debt may
be accelerated upon the occurrence of various Events of Default, including breaches of the agreement, certain cross-default situations, certain
bankruptcy related situations, and other customary events of default.
As a result of the fair value hedging activities discussed in Note 9 to the Consolidated Financial Statements, an adjustment of approximately
$0.3 million was made to increase the carrying value of the Company's long-term fixed rate debt at June 30, 2008.
Private Placement Senior Term Notes
In fiscal year 2005, the Company issued $200.0 million of senior unsecured debt to approximately twenty purchasers via a private
placement transaction pursuant to a Master Note Purchase Agreement. The placement was split into four tranches, with $100.0 million maturing
March 31, 2013 and $100.0 million maturing March 31, 2015. Of the debt maturing in 2013, $30.0 million was issued as fixed rate debt with a
rate of 4.97 percent. The remaining $70.0 million was issued as variable rate debt and is priced at 52 basis points over LIBOR. Of the
$100.0 million of the debt maturing in 2015, $70.0 million was issued at a fixed rate of 5.20 percent, with the remaining $30.0 million issued as
variable rate debt, priced at 55 basis points over LIBOR. All four tranches are non-amortizing and no principle payments are due until maturity.
Interest payments are due semi-annually.
The Master Note Purchase Agreement includes financial covenants including debt to EBITDA ratios, fixed charge coverage ratios and
minimum net equity tests (as defined within the Private Shelf Agreement), as well as other customary terms and conditions. The maturity date
for the debt may be accelerated upon the occurrence of various Events of Default, including breaches of the agreement, certain cross- default
situations, certain bankruptcy related situations, and other customary events of default.
During March of fiscal year 2002, the Company completed a $125.0 million private debt placement. Of this amount, $58.0 million was
issued at a fixed coupon rate of 6.73 percent and repaid during fiscal year 2009 as the final maturity date was March 15, 2009, and $67.0 million
was issued at a fixed coupon rate of 7.20 percent with a final maturity date of March 15, 2012. This private placement debt is unsecured and
payments are due on a semi-annual basis. In anticipation of the new Master Note Purchase Agreement discussed above, the Company closed on
the First Amendment to Note Purchase Agreement (related to this private debt placement) in April 2005. The amendment modified certain
financial covenants so that they would be more consistent with the financial covenants in the new Master Note Purchase Agreement.
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