Long-Term Debt

6 Months Ended

Jul. 02, 2011

Note 5 — Long-Term Debt

Long-term debt consists of the following (in thousands):


	July 2,		January 1,
	2011		2011

9.125% notes	$	730,000	$	730,000
Borrowings under the ABL facilities		127,800		58,000

Total long-term debt	$	857,800	$	788,000

9.125% Senior Secured Notes due 2017

In October 2010, in connection with the consummation of the Merger, the Company and AMH New Finance, Inc. (collectively, the “Issuers”) issued and sold $730.0 million of 9.125% Senior Secured Notes due 2017 (the “9.125% notes”). The notes bear interest at a rate of 9.125% per annum and are unconditionally guaranteed, jointly and severally, by each of the Issuers’ direct and indirect domestic subsidiaries that guarantee the Company’s obligations under the senior secured asset-based revolving credit facilities (the “ABL facilities”). The first semi-annual interest payment was made on April 29, 2011.

As the Company did not complete its offer to exchange all of its outstanding privately placed 9.125% notes for newly registered 9.125% notes until July 2011, the fair value of the 9.125% notes at July 2, 2011 and January 1, 2011 was estimated to be $730.0 million based upon the pricing determined in the private offering of the 9.125% notes at the time of issuance in October 2010. Subsequent to the completion of the notes exchange, the 9.125% notes have an estimated fair value of $671.6 million based on quoted market prices as of August 8, 2011.

ABL Facilities

In October 2010, in connection with the consummation of the Merger, the Company entered into the ABL facilities in the amount of $225.0 million (comprised of a $150.0 million U.S. facility and a $75.0 million Canadian facility) pursuant to a revolving credit agreement maturing in 2015 (the “Revolving Credit Agreement”). The revolving credit loans under the Revolving Credit Agreement bear interest at the rate of (1) the London Interbank Offered Rate (“LIBOR”) (for Eurodollar loans under the U.S. facility) or Canadian Dealer Offered Rate (“CDOR”) (for loans under the Canadian facility), plus an applicable margin of 3.00% as of July 2, 2011, (2) the alternate base rate (which is the highest of a prime rate, the Federal Funds Effective Rate plus 0.50% and a one-month LIBOR rate plus 1.0% per annum), plus an applicable margin of 2.00% as of July 2, 2011, or (3) the alternate Canadian base rate (which is the higher of a Canadian prime rate and the 30-day CDOR Rate plus 1.0%), plus an applicable margin of 2.00% as of July 2, 2011.

As of July 2, 2011, there was $127.8 million drawn under the Company’s ABL facilities and $52.7 million available for additional borrowings. As of July 2, 2011, the per annum interest rate applicable to borrowings under the U.S. portion of the ABL facilities was 3.9%. As of July 2, 2011, the per annum interest rate applicable to borrowings under the Canadian portion of the ABL facilities was 4.4%. The weighted average interest rate for borrowings under the ABL facilities was 4.0% for the quarter ended July 2, 2011. As of July 2, 2011, the Company had letters of credit outstanding of $7.4 million primarily securing deductibles of various insurance policies.