Notes to Financial Statements
NOTE 12—Debt
The following is a summary of debt obligations at
December 31 (in millions):
On January 21, 1998, in connection with the Recapitalization,
Fisher entered into new debt financing arrangements, providing
for up to $469.2 million of senior bank financing (the "Credit
Facility"), a $150 million receivables securitization
facility (the "Receivables Securitization") and
$400 million of 9% Senior Subordinated Notes due 2008 (the "9%
Notes"). The proceeds of the 9% Notes, together with a
portion of the proceeds of the Credit Facility, were used to
finance the conversion into cash of the common stock then outstanding
that were not retained by existing stockholders and employees,
to refinance $107.8 million of indebtedness outstanding on the
date of the Recapitalization and to pay related fees and expenses
of the Recapitalization.
In March 1998, the Company paid down $40.0 million of borrowings
under the Credit Facility, funded by $20 million of proceeds
from the sale of accounts receivable under the Receivables Securitization,
increasing that facility limit to $170 million, and $20 million
of cash generated by operations. As of December 31, 2000, the
Credit Facility provided for (i) a $231.2 million term loan
facility (the "Term Facility") consisting of (a) a
$87.6 million tranche A term loan ("Tranche A"), (b)
a $85.1 million tranche B term loan ("Tranche B")
and (c) a $58.5 million tranche C term loan ("Tranche C");
and (ii) a $175.0 million revolving credit facility (the "Revolving
Facility"). Of the $231.2 million outstanding under the
Term Facility, $193.0 million is denominated in U.S. dollars,
$27.8 million is denominated in British pounds and $10.4 million
is denominated in Canadian dollars. Borrowings under the Term
Facility and Revolving Facility bear interest at a range of
rates, based upon the Company's leverage ratio, equal to, at
the Company's option, the following: Tranche A and Revolving
Facility, LIBOR plus 1.25% to 2.25% or Prime Rate plus 0.25%
to 1.25%; Tranche B, LIBOR plus 2.25% to 2.50% or Prime Rate
plus 1.25% to 1.50%; and Tranche C, LIBOR plus 2.50% to 2.75%
or Prime Rate plus 1.50% to 1.75%. The Company also pays a commitment
fee equal to 0.50% per annum of the undrawn portion of each
lender’s commitment. Interest rates at December 31, 2000
were as follows: Tranche A—7.90% (LIBOR plus 1.50%); Tranche
B—8.65% (LIBOR plus 2.25%); and Tranche C—8.90% (LIBOR
plus 2.50%). The Term Facility has the following maturity periods
from the date of inception: Tranche A—6 years, Tranche
B—7 years and Tranche C—7.75 years. The Revolving
Facility expires six years from the date of inception. The mandatory
repayment schedule of the Term Facility is as follows: $18.5
million in 2001, $31.0 million in 2002, $22.7 million in 2003,
$62.6 million in 2004, and $96.4 million in 2005. No amounts
were outstanding under the Revolving Facility at December 31,
2000.
The obligations of Fisher and the subsidiary borrowers under
the Credit Facility are secured by substantially all assets
of the Company and its material domestic subsidiaries, a pledge
of the stock of all domestic subsidiaries, and a pledge of 65%
of the stock of material foreign subsidiaries, which are direct
subsidiaries of the Company or one of its material domestic
subsidiaries. Obligations of each foreign subsidiary borrower
are secured by a pledge of 100% of the shares of such borrower.
The obligations of Fisher and the subsidiary borrowers are further
guaranteed by Fisher and each material domestic subsidiary of
Fisher.
The Credit Facility contains covenants of the Company and the
subsidiary borrowers, including, without limitation, certain
financial covenants and restrictions on (i) indebtedness, (ii)
the sale of assets, (iii) mergers, acquisitions and other business
combinations, (iv) minority investments, and (v) the payment
of cash dividends to shareholders. The financial covenants include
requirements to maintain certain levels of interest coverage,
debt to earnings before interest, taxes, depreciation and amortization
("EBITDA" or leverage ratio), minimum EBITDA and a
limit on capital expenditures. The Company is in compliance
with all covenants at December 31, 2000. Loans under the Term
Facility are required to be prepaid with 50% of excess cash
flow (as defined in the Credit Facility and subject to certain
limits as specified therein), certain equity issuances of the
Company, 100% of net-cash proceeds of certain asset sales, certain
insurance and condemnation proceeds, and certain debt issuances
of the Company.
On January 21, and November 20, 1998, the Company issued $400
million and $200 million, respectively, of 9% Senior Subordinated
Notes. The 9% Senior Subordinated Notes issued in January were
issued at par while the 9% Senior Subordinated Notes issued
in November were issued net of an approximate $7 million discount.
The 9% Senior Subordinated Notes will mature on February 1,
2008 with interest payable semiannually in arrears on February
1 and August 1 of each year commencing August 1, 1998. The 9%
Notes are unsecured senior subordinated obligations of the Company,
subordinated in right of payment to all existing and future
senior indebtedness and rank pari passu in light of payment
with all other existing and future senior subordinated indebtedness
of the Company. The 9% Notes are redeemable at the option of
the Company at any time after February 1, 2003 at an initial
redemption price of 104.5%, declining ratably to par on or after
February 1, 2006. Upon a Change of Control Triggering Event
(as defined in the Indenture under which the 9% Notes are issued),
the Company will be required to make an offer to purchase all
outstanding 9% Notes at 101% of the principal amount thereof,
together with accrued and unpaid interest, if any, to the date
of purchase.
The Indenture under which the 9% Notes are issued contains
covenants that restrict, among other things, (i) the
ability of the Company and its subsidiaries to incur additional
indebtedness, (ii) pay dividends or make certain
other restricted payments, (iii) merge or consolidate with
any other person, and (iv) make minority investments,
and contains other various covenants that are customary
for transactions of this type.
The Company also has outstanding $150.0 million aggregate principal
amount of 71/8% Notes due December 15,
2005, which were sold on December 18, 1995 at a price to the
public equal to 99.184% of principal bringing the effective
interest rate to 7.5%.
Other debt outstanding at December 31, 2000 totaled $63.6 million,
of which $39.3 million is long-term in nature. This debt matures
as follows: $4.8 million in 2001, $5.6 million in 2002, $5.1
million in 2003, $2.1 million in 2004, $2.0 million in 2005,
and $19.7 million thereafter.
|