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SHORT-TERM DEBT
 12 Months Ended
Feb. 29, 2012
SHORT-TERM DEBT  
SHORT-TERM DEBT

NOTE 6 – SHORT-TERM DEBT

 

We have a Credit Agreement (the “2010 RCA”) with Bank of America, N.A. that provides for an unsecured total revolving commitment of up to $250.00 million, subject to certain terms and limitations as described below. The commitment under the 2010 RCA terminates on December 30, 2015. On December 15, 2011, we entered into an amendment to the 2010 RCA (the “Amendment”), which among other things increased the amount of borrowings available under the revolving commitment from $150.00 to $250.00 million.   We requested this increase to provide us with additional funds to help finance the PUR acquisition.   Borrowings under the 2010 RCA accrue interest at a “Base Rate” plus a margin of 0.00 to 1.125 percent per annum based on the Leverage Ratio (as defined in the 2010 RCA) at the time of borrowing. The base rate is equal to the highest of the Federal Funds Rate (as defined in the 2010 RCA) plus 0.50 percent, Bank of America’s prime rate or the one-month LIBOR rate plus 1.00 percent. Alternatively, if we elect, borrowings accrue interest based on the respective 1-, 2-, 3-, or 6-month LIBOR rate plus a margin of 1.00 to 2.125 percent per annum based upon the Leverage Ratio at the time of the borrowing. We incur loan commitment fees at a rate ranging from 0.25 to 0.45 percent per annum on the unused balance of the 2010 RCA. We incur letter of credit fees under the 2010 RCA at a rate ranging from 1.00 to 2.125 percent per annum on the face value of any letter of credit. Outstanding letters of credit reduce the borrowing availability under the 2010 RCA on a dollar-for-dollar basis. The 2010 RCA and our other debt are unconditionally guaranteed, on a joint and several basis, by the Company and certain of its subsidiaries. As of February 29, 2012, the revolving loan principal balance was $171.10 million and there were $0.34 million of open letters of credit outstanding against the 2010 RCA. For the fiscal year ended February 29, 2012, borrowings under the 2010 RCA incurred interest charges at rates ranging from 1.94 to 4.00 percent. As of February 29, 2012, the amount available for borrowings under the 2010 RCA was $78.56 million.

 

The 2010 RCA and our other debt agreements require the maintenance of maximum debt leverage and minimum interest coverage ratios, specify minimum consolidated net worth levels and contain other customary covenants, which restrict us from incurring liens on any of our properties, except under certain conditions, and limit our ability to pay dividends and repurchase shares of our common stock, among other things. As of February 29, 2012, all our debt agreements effectively limited our ability to incur more than an estimated $254.40 million of additional debt from all sources, including the 2010 RCA. We were in compliance with the terms of the 2010 RCA and our other debt agreements as of February 29, 2012.