Debt and Credit Facilities

3 Months Ended

Mar. 31, 2012

Debt and Credit Facilities [Abstract]

Debt and Credit Facilities

(10) Debt and Credit Facilities

Our total debt outstanding consisted of the amounts included in the table below.

	March 31, 2012		December 31, 2011
Short-term borrowings	$	34.5	$	34.5
Current portion of long-term debt		1.6		1.9
Total current debt		36.1		36.4
5.625% Senior Notes due July 2013, less unamortized discount of $0.2 in 2012 and $0.3 in 2011(1)		400.8		401.0
12% Senior Notes due February 2014(1)		155.6		156.3
Term Loan A Facility due October 2016, less unamortized lender fees of $20.7 in 2012 and $22.7 in 2011		960.3		989.9
7.875% Senior Notes due June 2017, less unamortized discount of $6.2 in 2012 and $6.5 in 2011		393.8		393.5
Term Loan B Facility due October 2018, less unamortized lender fees of $20.3 in 2012 and $21.3 in 2011 and unamortized discount of $25.7 in 2012 and $26.5 in 2011		1,125.7		1,118.8
8.125% Senior Notes due September 2019		750.0		750.0
8.375% Senior Notes due September 2021		750.0		750.0
6.875% Senior Notes due July 2033, less unamortized discount of $1.4 in 2012 and 2011		448.6		448.6
Other		3.2		2.8
Total long-term debt, less current portion		4,988.0		5,010.9
Total debt	$	5,024.1	$	5,047.3

(1) Amount includes adjustments due to interest rate swaps. See “Interest Rate Swaps,” of Note 11, “Derivatives and Hedging Activities,” for further discussion.

Credit Facility

In connection with the funding of the cash consideration for the acquisition and the repayment of existing indebtedness of Diversey and to provide for ongoing liquidity requirements, on October 3, 2011, we entered into a senior secured credit facility (the “Credit Facility”). The Credit Facility consists of: (a) a multicurrency term loan A facility denominated in U.S. dollars, Canadian dollars, euros and Japanese yen, (“Term Loan A Facility”), (b) a multicurrency term loan B facility denominated in U.S. dollars and euros (“Term Loan B Facility”) and (c) a $700 million revolving credit facility available in U.S. dollars, Canadian dollars, euros and Australian dollars (“Revolving Credit Facility”).

The Term Loan A Facility and the Revolving Credit Facility each have a five-year term and bear interest at either LIBOR or base rate (or an equivalent rate in the relevant currency) plus 250 basis points (bps) per annum in the case of LIBOR loans and 150 bps per annum in the case of base rate loans, provided that the interest rates shall be decreased to 225 bps and 125 bps, respectively, upon achievement of specified leverage ratios. The Term Loan B Facility has a seven-year term. The U.S. dollar-denominated tranche of the Term Loan B Facility bears interest at either LIBOR or base rate plus 375 bps per annum in the case of LIBOR loans and 275 bps per annum in the case of base rate loans, and the euro-denominated tranche bears interest at either EURIBOR or base rate plus 450 bps per annum in the case of EURIBOR loans and 350 bps per annum in the case of base rate loans. LIBOR and EURIBOR are subject to a 1.0% floor under the Term Loan B Facility tranches. Our obligations under the Credit Facility have been guaranteed by certain of Sealed Air’s subsidiaries and secured by pledges of certain assets and the capital stock of certain of our subsidiaries.

The U.S. dollar denominated tranche of the Term Loan B Facility was sold to investors at 98% of its principal amount, and the euro-denominated tranche of the Term Loan B Facility was sold to investors at 97% of its principal amount. As a result, we recorded $28 million of original issuance discounts, which are included in the carrying amount of the Term Loan B Facility. We also recorded $48 million of lender fees related to the transactions mentioned above. These fees are also included in the carrying amount of the respective debt instruments. In addition, we recorded $51 million of non-lender fees related to the transactions mentioned above. These fees are included in other assets on our condensed consolidated balance sheet.

The amortization expense of the original issuance discount, and lender and non-lender fees are calculated using the effective interest rate method over the lives of the respective debt instruments. Total amortization expense in the three months ended March 31, 2012 related to the debt instruments above was $6 million and is included in interest expense on our condensed consolidated statements of operations.

Effective October 3, 2011, we terminated our former global credit facility and European credit facility and replaced them with the Revolving Credit Facility. The Revolving Credit Facility may be used for working capital needs and general corporate purposes, including the payment of the amounts required upon effectiveness of the Settlement agreement. We did not use our former global credit facility or European credit facility in the year ended December 31, 2011. We used our Revolving Credit Facility for a short time period in connection with the acquisition of Diversey in the year ended December 31, 2011. We did not use our Revolving Credit Facility in the three months ended March 31, 2012. Interest paid for the year ended December 31, 2011 under the Revolving Credit Facility was immaterial. There were no amounts outstanding under the Revolving Credit Facility at March 31, 2012 or December 31, 2011.

The Credit Facility provides for customary events of default, including failure to pay principal or interest when due, failure to comply with covenants, the fact that any representation or warranty made by Sealed Air is false in any material respect, certain insolvency or receivership events affecting Sealed Air and its subsidiaries and a change in control of Sealed Air. For certain events of default, the commitments of the lenders will be automatically terminated, and all outstanding obligations of Sealed Air under the Credit Facility may be declared immediately due and payable.

Lines of Credit

The following table summarizes our available lines of credit and committed and uncommitted lines of credit, including the Revolving Credit Facility discussed above, and the amounts available under our accounts receivable securitization program. We are not subject to any material compensating balance requirements in connection with our lines of credit.

	March 31, 2012		December 31, 2011
Used lines of credit	$	34.5	$	34.5
Unused lines of credit		1,021.7		1,028.7
Total available lines of credit	$	1,056.2	$	1,063.2
Available lines of credit—committed	$	704.0	$	703.9
Available lines of credit—uncommitted		352.2		359.3
Total available lines of credit	$	1,056.2	$	1,063.2
Accounts receivable securitization program—committed(1)	$	93.0	$	92.0

(1) See Note 8, “Accounts Receivable Securitization Program,” for further details of this program.

Other Lines of Credit

Substantially all our short-term borrowings of $35 million at March 31, 2012 and December 31, 2011 were outstanding under lines of credit available to several of our foreign subsidiaries. The following table details our other lines of credit.

	March 31, 2012			December 31, 2011
Available lines of credit	$	356.2		$	363.2
Unused lines of credit		321.7			328.7
Weighted average interest rate		6.2	%		2.6	%

Covenants

Each issue of our outstanding senior notes imposes limitations on our operations and those of specified subsidiaries. The Credit Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our indebtedness, liens, investments, restricted payments, mergers and acquisitions, dispositions of assets, transactions with affiliates, amendment of documents and sale leasebacks, and a covenant to maintain a Consolidated Net Debt to Consolidated EBITDA (as defined in the Credit Facility). We were in compliance with the above financial covenants and limitations at March 31, 2012.