Note 12 – Long-Term Debt

Long-term debt consists of the following:


	As of September 28, 2014		As of December 29, 2013
	(In millions)
Revolving credit facility borrowings	$	200.0	$	200.0
Other debt		0.1		0.1

Total long-term debt	$	200.1	$	200.1

On September 26, 2014, the company entered into a new $400 million, five-year senior secured revolving credit facility. The facility primarily consists of the credit agreement dated as of September 26, 2014 among Fairchild, the lenders named therein and Bank of America, NA, as administrative agent. At closing, the company paid off all indebtedness under the prior credit facility using approximately $200 million of the proceeds provided by the new facility. The prior credit facility was terminated concurrent with the closing of the new facility. The new facility consists of a $400 million five-year revolving credit facility with a $50 million sublimit for the issuance of standby letters of credit and a $20 million sublimit for swing line loans. The company has the ability to increase the facility from time to time by the addition of one or more tranches of incremental loans in the form of either (i) incremental term loan facilities or, (ii) incremental increases in the revolving credit facility. The aggregate principal amount of all incremental facilities cannot exceed $300 million. After adjusting for outstanding letters of credit, the company had $199.4 million available under the credit facility. This revolving borrowing capacity is available for working capital and general corporate purposes, including acquisitions. The company had additional outstanding letters of credit of $365,000 that do not fall under the senior credit facility. The company also had $3.5 million of undrawn credit facilities at certain of its foreign subsidiaries. These outstanding amounts do not impact available borrowings under the senior credit facility.

The company’s obligations under the facility are guaranteed by certain of its domestic subsidiaries and are secured by a pledge of 100% of the equity interests in our material domestic subsidiaries and 65% of the equity interests of certain of its first-tier non-U.S. subsidiaries. Additionally, the credit agreement contains affirmative and negative covenants that are customary for a senior secured credit agreement of this nature. The negative covenants include, among other things, limitations on asset sales, mergers and acquisitions, indebtedness, liens, dividends, investments, loans, guarantees and transactions with the company’s affiliates. The credit agreement contains only two financial covenants: (i) a maximum leverage ratio of total consolidated indebtedness to adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) for the trailing four consecutive quarters of 3.25 to 1.00 and (ii) a minimum interest coverage ratio of adjusted EBITDA to consolidated interest expense for the trailing four consecutive quarters of at least 3.0 to 1.0. Interest expenses and commitment fees for the facility are determined on a sliding scale and are based upon its then current leverage ratio. Interest expenses range from LIBOR plus 1.25% to a maximum rate of LIBOR plus 2.00% for Eurodollar rate loans. Unused commitment fees are calculated as a percentage of the entire facility and range between .20% at the low end of the range to a maximum rate of 0.35%. At September 28, 2014, the company was in compliance with all its covenants and expects to remain in compliance. This expectation is subject to various risks and uncertainties discussed more thoroughly in Item 1A, and include, among others, the risk that the assumptions and expectations about business conditions, legal contingencies, expenses and cash flows for the remainder of the year may be inaccurate.