Long-term debt

The long-term debt of the company is summarized below:



In thousands of dollars
	Dec. 30, 2012		Dec. 25, 2011
Unsecured notes bearing fixed rate interest at 6.375% repaid April 2012	$	—	$	306,534
Borrowings under revolving credit agreements expiring September 2014	205,000		235,000
Unsecured notes bearing fixed rate interest at 8.75% due November 2014	248,376		247,609
Unsecured notes bearing fixed rate interest at 10% due June 2015	61,286		59,522
Unsecured notes bearing fixed rate interest at 6.375% due September 2015	248,497		247,995
Unsecured notes bearing fixed rate interest at 10% due April 2016	174,241		169,775
Unsecured notes bearing fixed rate interest at 9.375% due November 2017	247,547		247,168
Unsecured notes bearing fixed rate interest at 7.125% due September 2018	247,153		246,760
Total long-term debt	$	1,432,100	$	1,760,363

Total average debt outstanding in 2012 and 2011 was $1.7 billion and $2.1 billion, respectively. The weighted average interest rate on all debt was 7.7% for 2012 and 7.4% for 2011.

On Dec. 30, 2012, the company had unused borrowing capacity of $922 million under its revolving credit agreements. In addition, its revolving credit agreements allow the company to borrow at least $1.25 billion of additional unsecured debt (unrestricted as to purpose) guaranteed by the guarantor subsidiaries under these credit agreements. This borrowing limit is subject to increases depending upon the company’s total leverage ratio.

During 2010 and 2009, the company completed a series of financing transactions which improved its debt maturity profile.

In September 2010, the company completed a private placement offering of unsecured senior notes totaling $500 million in two tranches: $250 million with a coupon of 6.375% due 2015 and $250 million with a coupon of 7.125% due 2018. The 2015 notes were priced at 98.970% of face value, resulting in a yield to maturity of 6.625%. The 2018 notes were priced at 98.527% of face value, resulting in a yield to maturity of 7.375%. On or after Sept. 1, 2014, the 2018 notes may be redeemed or purchased by the company at the applicable redemption price (expressed as a percentage of the principal amount of the 2018 notes) plus accrued but unpaid interest thereon to the redemption date, if redeemed during the 12-month period commencing on Sept. 1 of the following years: 2014 – 103.563%, 2015 – 101.781% and 2016 and thereafter 100.000%. The company used the net proceeds of the offering to partially repay borrowings outstanding under its revolving credit agreements and its then outstanding term loan.

In September 2010, the company amended its revolving credit agreements and extended the maturity date with the majority of its lenders from March 15, 2012 to Sept. 30, 2014. Total commitments under the amended revolving credit agreements are $1.14 billion through Sept. 30, 2014.

In October 2009, the company completed a private placement offering of $250 million in aggregate principal amount of 8.750% senior notes due 2014 and $250 million in aggregate principal amount of 9.375% senior notes due 2017. The 2014 notes were priced at 98.465% of face value, resulting in a yield to maturity of 9.125%. The 2017 notes were priced at 98.582% of face value, resulting in a yield to maturity of 9.625%. On or after November 15, 2013, the 2017 notes may be redeemed or purchased by the company at the applicable redemption price (expressed as a percentage of the principal amount of the 2017 notes) plus accrued but unpaid interest thereon to the redemption date, if redeemed during the 12-month period commencing on November 15 of the following years: 2013 – 104.688%, 2014 – 102.344% and 2015 and thereafter 100.000%.

In May 2009, the company completed a private exchange offer related to its 5.75% fixed rate notes due June 2011 and its 6.375% fixed rate notes due April 2012. The company exchanged approximately $67 million in principal amount of its 2011 notes for approximately $67 million principal amount of new 10% senior notes due 2015, and approximately $193 million in principal amount of its 2012 notes for approximately $193 million principal amount of new 10% senior notes due 2016.

The notes issued during 2010 and 2009 with maturity dates in 2014 and thereafter were made available in private offerings that were exempt from the registration requirements of the Securities Act of 1933. These notes are guaranteed on a senior basis by the subsidiaries of the company that guarantee its revolving credit and term loan agreements discussed more fully below.

The company’s three revolving credit agreements require the company to maintain a senior leverage ratio of less than 3.5x. The agreements also require the company to maintain a total leverage ratio of less than 4.0x. The total leverage ratio would also include any subordinated debt the company may issue in the future. Currently, all of the company’s debt is senior and unsecured. At Dec. 30, 2012, the senior leverage ratio was 1.41x.

Commitment fees since March 15, 2012 on the revolving credit agreements are equal to 0.50% of the undrawn commitments. Prior to this, the company paid a fee to the lenders that agreed in September 2010 to extend their commitments from 2012 to 2014 based on the leverage ratio that ranged from 0 to 75 basis points for drawn amounts and 25 basis points for undrawn amounts.

Under each of the agreements, the company may borrow at an applicable margin above the Eurodollar base rate or the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%. The applicable margin is determined based on the company’s leverage ratio but will differ between Eurodollar base rate loans and loans based on the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%. For borrowings at a margin above the Eurodollar base rate, the margin varies from 2.00% to 3.25%. For borrowings at a margin above the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%, the margin will vary from 1.00% to 2.25%. At its current leverage ratios, the company’s applicable margins will be 2.25% and 1.25%, respectively.

In connection with each of its three revolving credit agreements and its then outstanding loan agreement, the company agreed to provide guarantees from a majority of its domestic wholly-owned subsidiaries in the event that the company’s credit ratings from either Moody’s or S&P fell below investment grade. In the first quarter of 2009, the company’s credit rating was downgraded below investment grade by both S&P and Moody’s. Accordingly, the guarantees were triggered and the existing notes then due in 2011 and 2012 and other unsecured debt of the company became structurally subordinated to the revolving credit agreements and its then outstanding term loan.

On Aug. 21, 2009, Moody’s confirmed the company’s Ba1 corporate family rating and its Ba2 senior unsecured debt rating. In addition, Moody’s rated the company’s bank debt, which included its revolving credit facilities, Baa3. The Baa3 rating was also applicable to most of the company’s long-term debt which has the same subsidiary guarantees as the bank debt, while the Ba2 rating applied to certain non-guaranteed senior long-term debt. On April 2, 2012, following the redemption of the last tranche of the company’s non-guaranteed long-term debt, Moody’s changed the company’s senior unsecured debt rating to Ba1 and lowered the rating applicable to the company’s revolving credit facilities and remaining guaranteed long-term debt to Ba1 for consistency with the new senior unsecured debt rating.

As of Dec. 30, 2012, the company had $205 million of borrowings under its revolving credit agreements. The maximum amount outstanding at any time during 2012 and 2011 was $521 million and $470 million, respectively. The daily average outstanding balance of the revolving credit agreements during 2012 and 2011 was $353 million and $257 million, respectively. The weighted average interest rate for 2012 was 2.8% and 2.6% for 2011.

The company has an effective universal shelf registration statement under which an unspecified amount of securities may be issued, subject to a $7 billion limit established by the Board of Directors. Proceeds from the sale of such securities may be used for general corporate purposes, including capital expenditures, working capital, securities repurchase programs, repayment of debt and financing of acquisitions. The company may also invest borrowed funds that are not required for other purposes in short-term marketable securities.

The following schedule shows the annual maturities of long term debt:



In thousands of dollars
2013	$	—
2014	453,376
2015	309,783
2016	174,241
2017	247,547
2018	247,153
Total	$	1,432,100

The company’s debt maturities may be repaid with cash flow from operating activities or by accessing capital markets or a combination of both.