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Subsequent Events
3 Months Ended
Mar. 31, 2013
Subsequent Events  
Subsequent Events

8.             Subsequent Events

 

On May 3, 2013, we  entered into a $500 million five-year, amended and restated revolving credit agreement, which we refer to as the  2013 Credit Agreement, with the financial institutions identified therein as lenders and Citibank, N.A. as Administrative Agent.  The 2013 Credit Agreement is guaranteed by our material subsidiaries and is supported by a security interest in all of our and our subsidiaries’ assets.

 

The 2013 Credit Agreement amends and restates in its entirety the 2011 Credit Agreement, dated as of December 16, 2011.

 

The 2013 Credit Agreement provides for an initial $500 million in revolving credit facilities, and, under specified circumstances, the revolving credit facility can be increased or one or more incremental term loan facilities can be added, provided that the incremental credit facilities do not exceed in the aggregate the sum of (a) $75 million plus (b) an additional amount not less than $25 million, so long as our total secured leverage ratio, calculated giving pro forma effect to the requested incremental borrowing and other customary and appropriate pro forma adjustment events, including any permitted acquisitions, is no greater than 2.5:1.0.  The 2013 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants, and events of default.  Principal covenants include a maximum consolidated leverage ratio reducing from 3.50:1.00 to 3.25:1.00 over the next two years and a minimum interest coverage ratio of 3.00:1.00.

 

Borrowings under 2013 Credit Agreement were used to refinance the entire term loan facility under the 2011 Credit Agreement.

 

The interest rates applicable to the revolving credit facility are, at our option, either (a) the LIBOR  multiplied by the statutory reserve rate plus an interest margin ranging from 1.50% to 2.25% based on our  consolidated leverage ratio, or (b) a base rate (which is equal to the greatest of (a) Citibank’s prime rate, (b) the federal funds effective rate plus 0.50% and (c) the one-month LIBOR  plus 1.00% plus an interest margin ranging from 0.50% to 1.25% based on our  consolidated leverage ratio.  We  will pay an unused commitment fee on the revolving credit facility during the term of the 2013 Credit Agreement ranging from 0.375% to 0.50% per annum based on our consolidated leverage ratio.

 

Our obligations under the 2013 Credit Agreement may be accelerated upon the occurrence of an event of default under the 2013 Credit Agreement, which includes customary events of default including, without limitation, payment defaults, failures to perform affirmative covenants, failure to refrain from actions or omissions prohibited by negative covenants, the inaccuracy of representations or warranties, cross-defaults, bankruptcy and insolvency related defaults, defaults relating to judgments, defaults due to certain ERISA related events and a change of control default.

 

In connection with the preparation of these unaudited Consolidated Financial Statements, an evaluation of subsequent events was performed through the date these unaudited Consolidated Financial Statements were issued and there are no other events that have occurred that would require adjustments or disclosure to our unaudited Consolidated Financial Statements.