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Long-Term Debt and Credit Arrangements
12 Months Ended
Apr. 25, 2014
Long-term Debt, by Current and Noncurrent [Abstract]  
Long-Term Debt and Credit Agreements
Long-Term Debt and Credit Arrangements
As of April 25, 2014, and April 26, 2013, long-term debt was comprised solely of an interest-free loan of $1,000, due ten years from the date of borrowing, with imputed interest, which as a result is discounted to $835 and $816, respectively, on the Consolidated Balance Sheets. We have imputed interest based on our current borrowing rate. This loan is considered a Level 2 fair value input. See Note 7.
On January 2, 2014, we entered into a $750,000 Revolving Credit Facility Amended and Restated Credit Agreement ("Credit Agreement"), which replaced the previous credit facility. The Credit Agreement represents a syndicated secured revolving credit facility under which up to $750,000 will be available, with a letter of credit sub-facility of $50,000, and an accordion option to increase the revolving credit commitment to $1,050,000. It is secured by the stock pledges of certain material subsidiaries. This agreement replaced our existing variable-rate revolving credit facility. Borrowings under the Credit Agreement bear interest, at Borrower’s option, at a rate based on LIBOR or the Base Rate, plus a margin based on the Leverage Ratio, ranging from 1.00% to 2.00% per annum for LIBOR, and ranging from 0.00% to 1.00% per annum for Base Rate. The Base Rate means for any day, a fluctuating per annum rate of interest equal to the highest of (i) the Federal Funds Open Rate, plus 0.5%, (ii) the Prime Rate, or (iii) the Daily LIBOR Rate, plus 1.0%. We are also required to pay a commitment fee of 0.15% per annum to 0.25% per annum of the average unused portion of the total lender commitments then in effect. We incurred financing costs of $2,064 associated with this refinancing, which along with previous unamortized debt financing costs of $760 are being amortized over five years.
Our credit facility contains financial and other various affirmative and negative covenants that are typical for financings of this type. Our credit facility contains financial covenants that require us to maintain specified ratios at April 25, 2014, of (1) a minimum coverage ratio of not less than 3.00 to 1.00; and (2) a maximum leverage ratio that may not exceed 3.75 to 1.00. As of April 25, 2014, our coverage ratio was 31.0, and our leverage ratio was 3.27, as defined in our credit facility. Our credit facility also limits repurchases of our common stock and the amount of dividends that we pay to holders of our common stock in certain circumstances. A breach of any of these covenants could result in a default under our credit facility, in which all amounts under our credit facility may become immediately due and payable, and all commitments under our credit facility extend further credit may be terminated. We are in compliance with all of the financial covenant requirements of our credit facility as of April 25, 2014.
Our effective interest rate for the Credit Agreement was 1.48% during the year ended April 25, 2014. Of our total Credit Agreement, $12,323 is reserved for certain stand-by letters of credit. The Credit Agreement has a maturity date of January 1, 2019.
As of April 25, 2014, we had $458,898 outstanding on the credit facility. The primary purposes of the Credit Agreement are for trade and stand-by letters of credit in the ordinary course of business as well as working capital, refinancing of existing indebtedness, if any, capital expenditures, joint ventures and acquisitions, stock repurchases and other general corporate purposes. A one percent increase in the benchmark rate used for our credit facility would increase our annual interest expense by approximately $4,653 assuming the $458,898 outstanding at the end of fiscal 2014 was outstanding for the entire year.
Interest costs of $611, $835 and $644 incurred in fiscal 2014, fiscal 2013 and fiscal 2012, respectively, were capitalized in connection with our construction activities. Interest paid in fiscal 2014, fiscal 2013 and fiscal 2012 was $4,544, $12,442 and $8,558, respectively.
In fiscal 2012, we obtained a $300,000 variable-rate revolving credit facility (“credit facility”). The credit facility provided us with liquidity options and supports our primary growth and return initiatives. The credit facility extended over a period of five years and required us to pay interest on outstanding borrowings at a rate based on London Interbank Offered Rate (“ LIBOR”) or the Base Rate plus a margin based on our leverage ratio, ranging from 0.75% to 2.00% per annum for LIBOR, and ranging from 0.00% to 1.00% per annum for the Base Rate. The Base Rate is the highest of (i) the Administrative Agent’s prime rate (ii) the Federal Funds open rate plus 0.50% or (iii) the Daily LIBOR Rate plus 1.00%. We were also required to pay a commitment fee of 0.150% per annum to 0.275% per annum, based on our leverage ratio, on the average unused portion of the total lender commitments then in effect. On April 26, 2013, we exercised a $150,000 accordion option under our credit facility to increase our aggregate commitments and borrowing capacity from $300,000 to $450,000. This credit facility was replaced by the Amended and Restated Credit Agreement entered into on January 2, 2014.
On November 30, 2012, we provided the agents for the Note Purchase Agreement, dated July 28, 2004, as amended (“2004 Notes”), and the Note Purchase Agreement, dated July 28, 2008, as amended (“2008 Notes”), with a prepayment notice. The interest rates under the 2004 Notes was Series 5.12% and 5.67%, and under the 2008 Notes was 6.39% and 6.39%. Per the terms of the 2004 Notes and the 2008 Notes (collectively, “Private Placement Notes”), notice of prepayment was required at least 30 days, but not more than 60 days, prior to payment. On December 31, 2012, we prepaid the Private Placement Notes in full, consisting of $97,145 in current aggregate principal amount, plus a make-whole amount of $6,150 determined in accordance with the provisions of the Private Placement Notes. Absent their early termination and prepayment, the maturity date of the 2004 Notes and the 2008 Notes would have been July 28, 2016, and July 28, 2014, respectively. We used cash on hand and borrowings from the credit facility to prepay the Private Placement Notes.