Note 12 – Debt

Debt due within one year totaled $15.0 million as of August 30, 2013, which represented the current maturity of the term loan. There was no debt due within one year as of February 28, 2013 and August 24, 2012.

Long-term debt and their related calendar year due dates as of August 30, 2013, February 28, 2013 and August 24, 2012, respectively, were as follows:


(In thousands)	August 30, 2013			February 28, 2013		August 24, 2012
Term loan, due 2019	$	350,000		$	—	$	—
7.375% senior notes, due 2021		225,000			225,000		225,000
Revolving credit facility, due 2017		—			61,200		55,000
Revolving credit facility, due 2018		13,900			—		—
6.10% senior notes, due 2028		181			181		181

		589,081			286,381		280,181
Current maturity of term loan		(15,000	)		—		—
Unamortized original issue discount		(10,601	)		—		—

	$	563,480		$	286,381	$	280,181

At August 30, 2013, the balances outstanding on the revolving credit facility and the term loan facility bear interest at a rate of approximately 3.2% and 4.0%, respectively. In addition to the balances outstanding on the aforementioned agreements, the Corporation also finances certain transactions with some of its vendors, which include a combination of various guaranties and letters of credit. At August 30, 2013, the Corporation had credit arrangements under a credit facility and an accounts receivable facility (as described below) to support the letters of credit in the amount of $129.1 million with $27.3 million of credit outstanding.

7.375% Senior Notes Due 2021

On November 30, 2011, the Corporation closed a public offering of $225.0 million aggregate principal amount of 7.375% senior notes due 2021 (the “2021 Senior Notes”). The net proceeds from this offering were used to finance other existing debt.

The 2021 Senior Notes will mature on December 1, 2021 and bear interest at a fixed rate of 7.375% per year. The 2021 Senior Notes constitute general unsecured senior obligations of the Corporation. The 2021 Senior Notes rank senior in right of payment to all future obligations of the Corporation that are, by their terms, expressly subordinated in right of payment to the 2021 Senior Notes and pari passu in right of payment with all existing and future unsecured obligations of the Corporation that are not so subordinated. The 2021 Senior Notes are effectively subordinated to secured indebtedness of the Corporation, including borrowings under its revolving credit facility described below, to the extent of the value of the assets securing such indebtedness. The 2021 Senior Notes also contain certain restrictive covenants that are customary for similar credit arrangements, including covenants that limit the Corporation’s ability to incur additional debt; declare or pay dividends; make distributions on or repurchase or redeem capital stock; make certain investments; enter into transactions with affiliates; grant or permit liens; sell assets; enter into sale and leaseback transactions; and consolidate, merge or sell all or substantially all of the Corporation’s assets. These restrictions are subject to customary baskets and financial covenant tests.

The total fair value of the Corporation’s publicly traded debt, which was considered a Level 1 valuation as it was based on quoted market prices, was $222.9 million (at a carrying value of $225.2 million), $233.6 million (at a carrying value of $225.2 million) and $247.1 million (at a carrying value of $225.2 million) at August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

Credit Facility

In connection with the closing of the Merger, on August 9, 2013, the Corporation entered into a $600 million secured credit agreement (“Credit Agreement”), which provides for a $350 million term loan facility (“Term Loan Facility”) and a $250 million revolving credit facility (“Revolving Credit Facility”). The Term Loan Facility was fully drawn on August 9, 2013, the closing date (“Closing Date”) of the Merger. The Corporation issued the Term Loan Facility at a discount of $10.8 million. Installment payments will be made on the Term Loan Facility. The first payment of $10 million will be made by February 28, 2014. Thereafter, payments are scheduled to be made quarterly in the amount of $5 million. The Corporation may elect to increase the commitments under each of the Term Loan Facility and the Revolving Credit Facility (together referred to herein as the “Credit Facilities”) up to an aggregate amount of $150 million. The proceeds of the term loans and the revolving loans borrowed on the Closing Date were used to fund a portion of the Merger consideration and pay fees and expenses associated therewith. After the Closing Date, revolving loans borrowed under the Credit Agreement will be used for working capital and general corporate purposes.

The obligations under the Credit Agreement are guaranteed by the Corporation’s Parent and material domestic subsidiaries and secured by substantially all of the assets of the Corporation and the guarantors.

The interest rate per annum applicable to the loans under the Credit Facilities will be, at the Corporation’s election, equal to either (i) the base rate plus the applicable margin or (ii) the relevant adjusted Eurodollar rate for an interest period of one, two, three or six months, at the Corporation’s election, plus the applicable margin.

The Credit Agreement contains certain customary covenants, including covenants that limit the ability of the Corporation, its subsidiaries and the Parent to, among other things, incur or suffer to exist certain liens; make investments; enter into consolidations, mergers, acquisitions and sales of assets; incur or guarantee additional indebtedness; make distributions; enter into agreements that restrict the ability to incur liens or make distributions; and engage in transactions with affiliates. In addition, the Credit Agreement contains financial covenants that require the Corporation to maintain a total leverage ratio and interest coverage ratio in accordance with the limits set forth therein.

The Credit Agreement contains customary events of default including, without limitation, the representations and warranties made in or in connection with the loan documents entered into in connection with the Credit Agreement prove to have been untrue in any material respect when made, the failure to make required payments, the failure to comply with certain agreements or covenants, cross-defaults to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, the failure to pay certain judgments and a Change of Control (as defined therein). If such an event of default occurs, the lenders under the Credit Agreement would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.

Accounts Receivable Facility

The Corporation is also a party to an accounts receivable facility that provides funding of up to $50 million, under which there were no borrowings outstanding as of August 30, 2013, February 28, 2013 and August 24, 2012.

Under the terms of the accounts receivable facility, the Corporation sells accounts receivable to AGC Funding Corporation (a wholly-owned, consolidated subsidiary of the Corporation), which in turn sells undivided interests in eligible accounts receivable to third party financial institutions as part of a process that provides funding to the Corporation similar to a revolving credit facility.

On August 9, 2013, the Corporation amended its accounts receivable facility. The amendment modifies the accounts receivable facility by providing for a scheduled termination date that is 364 days following the date of the amendment, subject to two additional, consecutive 364-day terms with the consent of the parties thereto. The amendment also, among other things, permits the Merger and changes the definition of the base rate to equal the higher of the prime rate as announced by the applicable purchaser financial institution, and the federal funds rate plus 0.50%.

AGC Funding pays an annual facility fee of 80 basis points on the commitment of the accounts receivable securitization facility, together with customary administrative fees on letters of credit that have been issued and on outstanding amounts funded under the facility. Funding under the facility may be used for working capital, general corporate purposes and the issuance of letters of credit.

The accounts receivable facility contains representations, warranties, covenants and indemnities customary for facilities of this type, including the obligation of the Corporation to maintain the same consolidated leverage ratio as it is required to maintain under its Credit Agreement.

The total fair value of the Corporation’s non-publicly traded debt, which was considered a Level 2 valuation as it was based on comparable privately traded debt prices, was $363.9 million (at a carrying value of $363.9 million), $61.2 million (at a carrying value of $61.2 million) and $55.0 million (at a carrying value of $55.0 million) at August 30, 2013, February 28, 2013 and August 24, 2012, respectively.

At August 30, 2013, the Corporation was in compliance with the financial covenants under its borrowing agreements.