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This excerpt taken from the HBI 10-Q filed May 14, 2007. (10) Long-Term
Debt
In connection with the spin off on September 5, 2006, the
Company entered into a $2,150,000 senior secured credit facility
(the “Senior Secured Credit Facility”), a $450,000
senior secured second lien credit facility and a $500,000 bridge
loan facility (the “Bridge Loan Facility”). The
Bridge Loan Facility was paid off in full through the issuance
of $500,000 of floating rate senior notes in December 2006.
On February 22, 2007, the Company entered into a First
Amendment (the “First Amendment”) to the Senior
Secured Credit Facility. Pursuant to the First Amendment, the
“applicable margin” with respect to the $1,400,000
Term B loan facility (“Term B Loan Facility”)
that comprises a part of the Senior Secured Credit Facility was
reduced from 2.25% to 1.75% with respect to loans maintained as
“LIBO loans,” and from 1.25% to 0.75% with respect to
loans maintained as “Base Rate loans.” At the
Company’s option, borrowings under the Senior Secured
Credit Facility may be maintained from time to time as
(a) Base Rate loans, which bear interest at the higher of
(i) 1/2 of 1% in excess of the federal funds rate and
(ii) the rate published in the Wall Street Journal as the
“prime rate” (or equivalent), in each case in effect
from time to time, plus the applicable margin in effect from
time to time, or (b) LIBOR based loans, which shall bear
interest at the LIBO Rate (as defined in the Senior Secured
Credit Facility and adjusted for maximum reserves), as
determined by the Administrative Agent for the respective
interest period plus the applicable margin in effect from time
to time.
The First Amendment also provides that in the event that, prior
to February 22, 2008, the Company: (i) incurs a new
tranche of replacement loans constituting obligations under the
Senior Secured Credit Facility having an effective interest rate
margin less than the applicable margin for loans pursuant to the
Term B Loan Facility (“Term B Loans”), the
proceeds of which are used to repay or return, in whole or in
part, principal of the outstanding Term B Loans,
(ii) consummates any other amendment to the Senior Secured
Credit Facility that reduces the applicable margin for the Term
B Loans, or (iii) incurs additional Term B Loans having an
effective interest rate margin less than the applicable margin
for Term B Loans, the proceeds of which are used in whole or in
part to prepay or repay outstanding Term B Loans, then in any
such case, the Company will pay to the Administrative Agent, for
the ratable account of each Lender with outstanding Term B
Loans, a fee in an amount equal to 1.0% of the aggregate
principal amount of all Term B Loans being replaced on such date
immediately prior to the effectiveness of such transaction.
The Company incurred $1,600 in debt issuance costs in connection
with entering into the First Amendment which will be amortized
over the life of the Term B Loan Facility.
Table of Contents
HANESBRANDS
Notes to Condensed Consolidated Financial Statements — (Continued) (dollars and shares in thousands, except per share data) (unaudited)
This excerpt taken from the HBI 10-Q filed Nov 13, 2006. (10) Long-Term
Debt
In connection with the spin off on September 5, 2006, the
Company entered into a $2,150,000 senior secured credit facility
(the “Senior Secured Credit Facility”), a $450,000
senior secured second lien credit facility (the “Second
Lien Credit Facility”) and a $500,000 bridge loan facility
(the “Bridge Loan Facility”). The outstanding
balances at September 30, 2006 are reported in the
“Current portion of long-term debt” and
“Long-term debt” lines of the Condensed Combined and
Consolidated Balance Sheet. The following paragraphs describe
these facilities.
Senior
Secured Credit Facility
The Senior Secured Credit Facility provides for aggregate
borrowings of $2,150,000, consisting of: (i) a $250,000
Term A loan facility (the “Term A
Loan Facility”); (ii) a $1,400,000 Term B loan
facility (the “Term B Loan Facility”); and
(iii) a $500,000 revolving loan facility (the
“Revolving Loan Facility”). The Senior Secured
Credit Facility is guaranteed by substantially all of
Hanesbrands’ U.S. subsidiaries and is secured by
equity interests in substantially all of Hanesbrands’
direct and indirect U.S subsidiaries and 65% of the voting
securities of certain foreign subsidiaries and substantially all
present and future assets of
Table of Contents
HANESBRANDS
Notes to
Condensed Combined and Consolidated Financial
Statements — (Continued)
(unaudited)
(dollars and shares in thousands, except per share data)
Hanesbrands and the guarantors. At the Company’s option,
borrowings under the Senior Secured Credit Facility may be
maintained from time to time as (a) Base Rate loans, which
shall bear interest at the higher of (i) 1/2 of 1% in
excess of the federal funds rate and (ii) the rate
published in the Wall Street Journal as the “prime
rate” (or equivalent), in each case in effect from time to
time, plus the applicable margin in effect from time to time
(which is currently 0.75% for the Term A Loan Facility and
the Revolving Loan Facility and 1.25% for the Term B
Loan Facility), or (b) LIBOR based loans, which shall
bear interest at the LIBO Rate (as defined in the Senior Secured
Credit Facility and adjusted for maximum reserves), as
determined by the administrative agent for the respective
interest period plus the applicable margin in effect from time
to time (which is currently 1.75% for the Term A
Loan Facility and the Revolving Loan Facility and 2.25% for
the Term B Loan Facility). The final maturity of the Term A
Loan Facility is September 5, 2012. The Term A
Loan Facility amortizes in an amount per annum equal to the
following: year 1 — 5.00%; year 2 — 10.00%;
year 3 — 15.00%; year 4 — 20.00%; year
5 — 25.00%; year 6 — 25.00%. The final
maturity of the Term B Loan Facility is September 5,
2013. The Term B Loan Facility is payable in equal
quarterly installments in an amount equal to 1% per annum,
with the balance due on the maturity date. The final maturity of
the Revolving Loan Facility is September 5, 2011. As
of September 30, 2006, the Company had $0 outstanding under
the Revolving Loan Facility and approximately $460,000 of
borrowing availability. At September 30, 2006, the interest
rates on the Term A Loan Facility and the Term B
Loan Facility were 7.13% and 7.63% respectively.
The Senior Secured Credit Facility requires the Company to
comply with customary affirmative and negative covenants and,
commencing with the first fiscal quarter ending after
December 15, 2006, financial covenants, and includes
customary events of default.
Second
Lien Credit Facility
The Second Lien Credit Facility provides for aggregate
borrowings of $450,000 by Hanesbrands’ wholly-owned
subsidiary, HBI Branded Apparel Limited, Inc. The Second Lien
Credit Facility is unconditionally guaranteed by Hanesbrands and
each entity guaranteeing the Senior Secured Credit Facility. The
Second Lien Credit Facility and the guarantees in respect
thereof are secured on a second-priority basis (subordinate only
to the Senior Secured Credit Facility and any permitted
additions thereto or refinancings thereof) by substantially all
of the assets that secure the Senior Secured Credit Facility.
Loans under the Second Lien Credit Facility bear interest in the
same manner as those under the Senior Secured Credit Facility,
subject to a margin of 2.75% for Base Rate loans and 3.75% for
LIBOR based loans. The Second Lien Credit Facility matures on
March 5, 2014 and includes a penalty for prepayment of the
loan prior to September 5, 2009. The Second Lien Credit
Facility will not amortize and will be repaid in full on its
maturity date. At September 30, 2006 the interest rate on
the Second Lien Credit Facility was 9.13%. The Second Lien
Credit Facility requires the Company to comply with customary
affirmative and negative covenants and, commencing with the
first fiscal quarter ending after December 15, 2006,
financial covenants, and includes customary events of default.
Bridge
Loan Facility
The Bridge Loan Facility provides for a borrowing of
$500,000 and is unconditionally guaranteed by each entity
guaranteeing the Senior Secured Credit Facility. The Bridge
Loan Facility is unsecured and matures on September 5,
2007. Interest under the Bridge Loan Facility shall be paid
at a rate of 9.6475%, increasing by .50% per annum on the
third, sixth and ninth month anniversaries of September 5,
2006, not to exceed 11.50% per annum. At September 30,
2006, the interest rate on the Bridge Loan Facility was 9.65%.
The Bridge Loan Facility requires the Company to comply
with customary affirmative and negative covenants, and
commencing with the first fiscal quarter ending after
December 15, 2006, financial covenants, and includes
customary events of default.
Table of Contents
HANESBRANDS
Notes to
Condensed Combined and Consolidated Financial
Statements — (Continued)
(unaudited)
(dollars and shares in thousands, except per share data)
Other
Financing Agreements
On January 27, 2006, the Company entered into a RMB
30 million short-term revolving facility arrangement with a
Chinese branch of a U.S. bank that was increased in July
2006 to RMB 50 million ($6,350) Borrowings under the
facility accrue interest at the prevailing base lending rates
published by the People’s Bank of China less 10%. As of
September 30, 2006, the Company had $4,751 outstanding
under the short-term revolving facility and $1,600 of borrowing
availability. At September 30, 2006, the interest rate on
this facility was 4.69%. The Company was in compliance with the
covenants contained in this facility at September 30, 2006.
Future principal payments for all of the facilities described
above are as follows: $24,626 due in the next nine months,
$35,875 due in 10 to 22 months, $48,375 due in 23 to
35 months, $60,875 due in 36 to 48 months, $73,375 due
in 49 to 61 months and $2,361,625 thereafter.
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