Debt
The carrying value of our outstanding debt consists of the following:
|
| | | | | | | |
| Fiscal Year End |
| 2013 | | 2012 |
Senior unsecured notes, 5.25% due 2017 | $ | 300,000 |
| | $ | 300,000 |
|
Senior unsecured notes, 5.00% due 2022, net of unamortized discount of $1,546 and $1,725, respectively | 298,454 |
| | 298,275 |
|
North America revolving trade accounts receivable-backed financing program | 199,000 |
| | 345,000 |
|
Lines of credit and other debt | 48,772 |
| | 111,268 |
|
| 846,226 |
| | 1,054,543 |
|
Short-term debt and current maturities of long-term debt | (48,772 | ) | | (111,268 | ) |
| $ | 797,454 |
| | $ | 943,275 |
|
In August 2012, we issued through a public offering $300,000 of 5.00% senior unsecured notes due 2022, resulting in cash proceeds of approximately $296,256, net of discount and issuance costs of $1,794 and $1,950, respectively. Interest on the notes is payable semiannually in arrears on February 10 and August 10, commencing February 10, 2013. We also have $300,000 of 5.25% senior unsecured notes due 2017. Interest on the notes is payable semiannually in arrears on March 1 and September 1 of each year. These notes may be redeemed by us in whole at any time or in part from time to time, at our option, at redemption prices that are designated in the terms and conditions of the respective notes.
We have a revolving trade accounts receivable-backed financing program in North America which provides for up to $675,000 in borrowing capacity. This financing program matures in November 2015. This financing program, subject to the financial institutions’ approval and availability of eligible receivables, may be increased to $900,000 in accordance with the extended terms of the program. The interest rate of this program is dependent on designated commercial paper rates (or, in certain circumstances, an alternate rate) plus a predetermined margin. We had borrowings of $199,000 and $345,000 at December 28, 2013 and December 29, 2012, respectively, under this North American financing program.
We have three revolving trade accounts receivable-backed financing programs in Europe and in Asia-Pacific:
| |
a) | a program which provides for a borrowing capacity of up to €105,000, or approximately $145,000 at December 28, 2013 exchange rates. In June 2013, we entered into an agreement to increase the borrowing capacity of this program to €105,000 from the previous amount of €100,000 and to extend its maturity to January 2017. |
| |
b) | A program which provides for a maximum borrowing capacity of up to €45,000, or approximately $62,000 at December 28, 2013 exchange rates. In May 2013, this program was extended and in June 2013, we entered into an agreement to reduce the borrowing capacity of this program to €45,000 from the previous amount of €90,000 and to extend its maturity to May 2016. |
| |
c) | A program which provides for a maximum borrowing capacity of up to 160,000 Australian dollars, or approximately $142,000 at December 28, 2013 exchange rates, maturing in May 2014. |
The current programs require certain commitment fees, and borrowings under this program incur financing costs based on the local short-term bank indicator rate for the currency in which the drawing is made plus a predetermined margin. We had no borrowings at December 28, 2013 or December 29, 2012 under any of these three financing program.
Our ability to access financing under all our trade accounts receivable-backed financing programs in North America, Europe and Asia-Pacific, as discussed above, is dependent upon the level of eligible trade accounts receivable as well as continued covenant compliance. We may lose access to all or part of our financing under these programs under certain circumstances, including: (a) a reduction in sales volumes leading to related lower levels of eligible trade accounts receivable; (b) failure to meet certain defined eligibility criteria for the trade accounts receivable, such as receivables remaining assignable and free of liens and dispute or set-off rights; (c) performance of our trade accounts receivable; and/or (d) loss of credit insurance coverage for our European and Asia-Pacific facilities. At December 28, 2013, our actual aggregate capacity under these programs was approximately $997,000 based on eligible trade accounts receivable available, of which $199,000 of such capacity was used. Even if we do not borrow, or choose not to borrow to the full available capacity of certain programs, most of our trade accounts receivable-backed financing programs prohibit us from assigning, transferring or pledging the underlying eligible receivables as collateral for other financing programs. At December 28, 2013, the amount of trade accounts receivable which would be restricted in this regard totaled approximately $1,525,000.
We have a $940,000 revolving senior unsecured credit facility from a syndicate of multinational banks, which was scheduled to mature in September 2016. In August 2013, we entered into an amendment of this facility to extend its maturity to September 30, 2018. In addition, the amendment provides an option to increase the total commitment by $310,000, subject to certain conditions. The interest rate on this facility is based on LIBOR, plus a predetermined margin that is based on our debt ratings and leverage ratio. We had no borrowings at December 28, 2013 and December 29, 2012, under this credit facility. This credit facility may also be used to issue letters of credit. At December 28, 2013 and December 29, 2012, letters of credit of $7,996 and $4,491, respectively, were issued to certain vendors and financial institutions to support purchases by our subsidiaries, payment of insurance premiums and flooring arrangements. Our available capacity under the agreement is reduced by the amount of any outstanding letters of credit.
We also have additional lines of credit, short-term overdraft facilities and other credit facilities with various financial institutions worldwide, which provide for borrowing capacity aggregating approximately $969,000 at December 28, 2013. Most of these arrangements are on an uncommitted basis and are reviewed periodically for renewal. At December 28, 2013 and December 29, 2012, respectively, we had $48,772 and $111,268 outstanding under these facilities. The weighted average interest rate on the outstanding borrowings under these facilities, which may fluctuate depending on geographic mix, was 9.0% and 7.9% per annum at December 28, 2013 and December 29, 2012, respectively. At December 28, 2013 and December 29, 2012, letters of credit totaling $31,636 and $30,829, respectively, were issued to various customs agencies and landlords to support our subsidiaries. The issuance of these letters of credit reduces our available capacity under these agreements by the same amount.
We are required to comply with certain financial covenants under the terms of certain of our financing facilities, including restrictions on funded debt and liens and covenants related to tangible net worth, leverage and interest coverage ratios and trade accounts receivable portfolio performance including metrics related to receivables and payables. We are also restricted by other covenants, including, but not limited to, restrictions on the amount of additional indebtedness we can incur, dividends we can pay, and the amount of common stock that we can repurchase annually. At December 28, 2013, we were in compliance with all material covenants or other material requirements set forth in our trade accounts receivable-backed programs, senior unsecured notes due 2017 and 2022, revolving senior unsecured credit facility and other credit agreements, as discussed above.
