Short-Term Financing Arrangements

3 Months Ended

Dec. 31, 2011

Short-Term Financing Arrangements [Abstract]

Short-Term Financing Arrangements

NOTE 15 – SHORT-TERM FINANCING ARRANGEMENTS

The Company has an agreement to sell, on an ongoing basis, all of the trade accounts receivable of certain of its subsidiaries to a wholly owned, bankruptcy-remote subsidiary named Ralcorp Receivables Corporation ("RRC"). As of December 31, 2011, the accounts receivable of the American Italian Pasta Company, Bloomfield Bakers, Medallion Foods, and foreign subsidiaries had not been incorporated into the agreement and were not being sold to RRC. RRC can in turn sell up to $110.0 of ownership interests in qualifying receivables to bank commercial paper conduits. Ralcorp continues to service the receivables (with no significant servicing assets or liabilities) and remits collections to RRC, who remits the appropriate portion to the conduits as part of a monthly net settlement including the sale of an additional month of receivables. Interest incurred on the funding received from the conduits totaled $.3 in the three months ended December 31, 2011 and in the three months ended December 31, 2010.

In December 2010, the Company entered into uncommitted credit arrangements with banks totaling $150.0. The arrangements expired in December 2011.

On October 3, 2011, the Company entered into a credit agreement ("2011 Credit Agreement") consisting of a $550 term loan. Borrowings under the agreement incur interest at the Company's choice of either (1) LIBOR plus the applicable margin rate (currently 1.50%) or (2) the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, (c) the "Adjusted LIBOR Rate" plus 1%. Such borrowings are unsecured and mature on October 2, 2012. The covenants include requirements that "EBIT" be at least three times "Consolidated Interest Expense" and that "Total Debt" not exceed 3.75 times "Adjusted EBITDA" (each term as defined in the agreement).

As of December 31, 2011, funding from the receivables securitization was $60.0 at a weighted average interest rate of 1.28% and borrowings under the 2011 Credit Agreement were $550 at a weighted average interest rate of 1.75%. As of September 30, 2011, funding from the receivables securitization was $105.0 at a weighted average interest rate of 1.22%, and borrowings under the uncommitted credit arrangements were zero. These amounts are reflected on the Company's consolidated balance sheet in "Notes payable to banks."