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LONG-TERM DEBT
12 Months Ended
Mar. 31, 2013
LONG-TERM DEBT  
LONG-TERM DEBT

11. LONG-TERM DEBT

        Long-term debt consists of the following:

(In thousands)
  March 31,
2013
  March 31,
2012
 

Term Loan B-1, due September 25, 2019

  $ 296,029   $  

Term Loan B-2, due September 25, 2016

    72,979      

First Lien Term Loan, due September 16, 2017

        306,822  

Second Lien Term Loan, due September 16, 2018

        137,638  
           

Total

    369,008     444,460  

Less: current portion

    (6,750 )   (3,100 )
           

Long-term debt

  $ 362,258   $ 441,360  
           
  • Term Loans

        In September 2012, the Company entered into an amendment (the "Refinancing") to the first lien term loan facility (the "First Lien Term Loan") pursuant to which the First Lien Term Loan was amended and restated to, among other things, provide for a new tranche of term loans in an amount equal to $375.0 million, the proceeds of which, together with cash-on hand of approximately $75.0 million, were used to repay in full all monies due pursuant to the second lien term loan facility (the "Second Lien Term Loan" and together with the First Lien Term Loan, the "2012 Term Loans"). The new term loan facility includes the 2013 Term Loans and each of the 2013 Term Loans included a LIBOR floor of 1.0%.

        In February 2013, the Company further amended the 2013 Term Loans (the "Repricing") to secure: (i) a reduction in interest payable under Term Loan B-1 to LIBOR plus 2.75% and a decrease in the LIBOR floor to 0.75%; (ii) a reduction in interest payable under Term Loan B-2 to LIBOR plus 2.75% and a decrease in the LIBOR floor to 0%; and (iii) a shortened time period, from one year to six months, during which a refinancing of the 2013 Term Loans, as described in the amended and restated credit agreement, would trigger a 1% prepayment premium.

        Term Loan B-1 was issued with a principal balance of $300.0 million, an original issue discount of $3.0 million and amortizes in equal quarterly amounts of 0.25% of the original principal amount of the loan, with the balance payable at maturity, which is September 25, 2019. Term Loan B-2 was issued with a principal balance of $75.0 million, an original issue discount of $0.4 million and amortizes in equal quarterly amounts of 1.25% of the original principal amount of the loan, with the balance payable at maturity, which is September 25, 2016. The 2013 Term Loans are guaranteed by certain subsidiaries of the Company (the "Guarantors") and is secured by a first priority lien on substantially all of the assets and properties of the Company and the Guarantors (subject to certain exceptions and limitations).

        Scheduled maturities with respect to the 2013 Term Loans are as follows (in thousands):

Fiscal Year:

       

2014

  $ 6,750  

2015

    6,750  

2016

    6,750  

2017

    64,875  

2018

    3,000  

Thereafter

    283,500  
       

Total

  $ 371,625  
       

        Required quarterly principal payments of $0.8 million on Term Loan B-1 and $0.9 million on Term Loan B-2 began on December 31, 2012. Commencing with the completion of the Company's fiscal year ended March 31, 2014, the Company is subject to mandatory prepayments of principal if certain excess cash flow thresholds, as defined in the 2013 Term Loans, are met. The Company may make prepayments of principal without premium or penalty, however, in the event that, prior to September 25, 2013, the Company prepays any of Term Loan B-1 or Term Loan B-2 pursuant to a repricing transaction or an amendment of the Term Loan Facility that results in a repricing transaction, the Company will be subject to a prepayment premium of 1% of the amount of the term loan being repaid or the aggregate amount of the applicable term loan outstanding immediately prior to such amendment.

        The 2013 Term Loans have an incremental facility capacity in an amount of $140.0 million, plus additional amounts as long as the Company meets certain conditions, including a specified leverage ratio. The 2013 Term Loans include a number of restrictive covenants that, among other things and subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and certain of its subsidiaries. The 2013 Term Loans also contain customary affirmative covenants and events of default. The Company was in compliance with its debt covenants at March 31, 2013.

        The Refinancing was a restructuring of the 2012 Term Loans and involved multiple lenders who were considered members of a loan syndicate. In determining whether the Refinancing was to be accounted for as a debt extinguishment or modification, the Company considered whether creditors remained the same or changed and whether the change in debt terms was substantial. The terms of the 2013 Term Loans were considered substantially different from the 2012 Term Loans if the present value of the cash flows under the 2013 Term Loans was at least 10% different from the present value of the remaining cash flows under the 2012 Term Loans (commonly referred to as the "10% Test"). The Company performed a separate 10% Test for each individual creditor participating in the loan syndication. The loans of creditors who did not participate in the 2013 Term Loans were accounted for as a debt extinguishment.

        The Repricing was a restructuring of the 2013 Term Loans and involved multiple lenders who were considered members of a loan syndicate. The Company performed a similar analysis to the analysis described above to determine if the Repricing was to be accounted for as a debt extinguishment or modification. In addition, since the Debt Repricing occurred within twelve months of the Refinancing, for any lenders who participated in the Refinancing, the Company performed the 10% test using the present value of the remaining cash flows under the 2013 Term Loans.

        As the 2012 and 2013 Term Loans have a prepayment option exercisable at any time, the Company assumed the prepayment option was exercised immediately on the date of the refinancing for purposes of applying the 10% Test. When there was a change in principal balance for individual creditors in the Refinancing and/or the Repricing, in applying the 10% Test, the Company used the cash flows related to the lowest common principal balance (commonly referred to as the "Net Method"). Under the Net Method, any principal in excess of a creditor's rollover money was treated as a new, separate debt issuance, and any decrease in principal was treated as a partial extinguishment of debt.

        New costs paid to creditors and third parties in connection with the Refinancing and/or Repricing were allocated to the 2013 Term Loans and then further allocated to each creditor. Once these costs were allocated to the individual creditors, an analysis of each creditor was performed and a determination made as to whether the refinancing was accounted for as a debt extinguishment or modification under the 10% Test. For debt considered to be extinguished, the unamortized deferred financing costs and unamortized original issue discount associated with the extinguished debt were expensed. For debt considered to be modified, the unamortized deferred financing costs and unamortized original issue discount associated with the modified debt continue to be amortized, new financing costs were expensed and new third-party fees were capitalized. For new creditors in the Refinancing and/or Repricing, new financing costs and original issue discount fees were capitalized and will be amortized over the estimated repayment period of the new debt.

        The Refinancing and Repricing resulted in a $12.1 million and $7.5 million charge, respectively, in the year ended March 31, 2013, which was included in "Interest expense" in the accompanying consolidated statement of operations and comprehensive income (loss) and was comprised of the following:

(In thousands)
  September 2012
Refinancing
  February 2013
Repricing
  Total  

Extinguished debt:

                   

Unamortized deferred financing costs

  $ 4,600   $ 1,566   $ 6,166  

Unamortized original issue discount

    2,657     1,435     4,094  

Modified debt:

                   

Debt financing costs

    1,967     807     2,772  

Original issue discount

    105         105  

Prepayment penalty

    2,800     3,733     6,533  
               

Total

  $ 12,129   $ 7,541   $ 19,670  
               

        At March 31, 2013, the Company's balance of unamortized deferred financing costs and unamortized original issue discount costs were $3.3 million and $2.6 million, respectively. These costs are being amortized to interest expense over the estimated repayment period of the 2013 Term Loans using the effective interest method. During the years ended March 31, 2013 and 2012, the Company had amortization expense of $5.8 million and $3.5 million, respectively, related to deferred financing costs and original issue discount.