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On January 14, 2003, the Company issued and sold $200
million of 8 1/8 percent senior subordinated notes due in May
2012 at a premium resulting in a yield of 7.4 percent. On February
14, 2003, the Company entered into a new credit facility (the
“Credit Facility”) with a group of financial institutions,
consisting of (i) a $400 million term loan facility (the “Term
Facility”), which contains a provision that, upon the
Company’s future request, and subject to the fulfillment
of certain conditions, an additional $250 million incremental
term facility may be drawn (the “Incremental Term Facility”)
and (ii) a $175 million revolving credit facility (the “Revolving
Facility”). The Revolving Facility includes a sub-limit
for the issuance of letters of credit. The Credit Facility also
permits borrowers to be designated in the future to borrow loans
denominated in local currency from individual letters thereunder,
either on a negotiated basis or through a competitive bidding
process. Commitments under the Revolving Facility expire, and
the loans outstanding thereunder mature, on March 31, 2008.
The Term Facility requires the Company to make quarterly repayments
of principal equal to $1 million through March 31, 2009, and
quarterly repayments of principal equal to $94 million beginning
June 30, 2009 through the maturity of the Term Facility on March
31, 2010. Borrowings under the revolving facility bear interest,
at the borrowers’ election, at either the adjusted LIBOR
rate plus a margin of between 2.25 percent and 3.00 percent
per annum or the prime rate plus a margin of between 1.25 percent
and 2.00 percent per annum, depending in each case on the Company’s
leverage ratio. Borrowings under the Term Facility bear interest,
at the borrowers’ election, at the adjusted LIBOR rate
plus 2.5 percent per annum or the prime rate plus 1.5 percent
per annum. The Credit Facility replaces the previous credit
facility entered into in January 1998. A portion of the proceeds
from the 8 1/8 percent senior subordinated notes and the Term
Facility were used to refinance the Company’s 9 percent
senior subordinated notes due in 2008.
Obligations of the Company and its subsidiaries under the Credit
Facility will be secured by substantially all assets of the
Company and its material domestic subsidiaries. In addition,
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 incurrence of liens, (iii) loans and investments, (iv) the
sale of assets, (v) mergers, acquisitions and other business
combinations, (vi) the payment of cash dividends to shareholders
and (vii) various financial covenants. The financial covenants
include requirements to maintain certain levels of interest
coverage, debt to earnings before interest, taxes, depreciation
and amortization and a limit on capital expenditures. Loans
under the Term Facility are required to be prepaid with 100
percent of net cash proceeds of certain asset sales, certain
insurance and condemnation proceeds, and certain debt issuances
of the Company or any of its subsidiaries.
On February 14, 2003, the Company entered into a new $225 million
receivables security facility (“Receivables Securitization”)
(see Note 6–Accounts Receivable), which provides for the
sale, on a revolving basis, of all of the accounts receivable
of Fisher Scientific Company L.L.C., Cole-Parmer Instrument
Company, Fisher Clinical Services Inc. and Fisher Hamilton L.L.C.
to FSI Receivables Company LLC, formerly named FSI Receivables
Corp. (“FSI”), a special purpose, bankruptcy remote
indirect wholly owned subsidiary of the Company. On the same
date, FSI and the Company, as servicer, entered into a receivables
transfer agreement with certain financial institutions, which
provides for the transfer on a revolving basis of an undivided
percentage ownership interest in a designated pool of accounts
receivable up to a maximum amount of $225 million to be funded
in cash from time to time to FSI. Under the terms of the Receivables
Securitization, the originators retain collection and administrative
responsibilities for the receivables in the pool. The effective
funded interest rate on the Receivables Securitization is approximately
one month LIBOR plus an annual commitment fee of 45 basis points.
The unfunded annual commitment fee is 25 basis points. |
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