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Credit Agreements
6 Months Ended
Dec. 31, 2012
Line of Credit Facility [Abstract]  
Lines Of Credit
2012 Term Loan
On December 20, 2012, we entered into the 2012 Term Loan with BOA, which was initially guaranteed by certain of our subsidiaries, but which guarantees were released in connection with the partial prepayment of the 2012 Term Loan in January 2013.
The 2012 Term Loan consists of a term loan facility for $100.0 million, the full amount of which was advanced to us on December 21, 2012 and was outstanding at December 31, 2012. All outstanding loans under the term loan facility mature on June 30, 2013 unless earlier payment is required under the terms of the loan agreement. Borrowings made under the 2012 Term Loan bear interest, at our option, at a base rate plus a margin (such margin not to exceed a per annum rate of 0.75%) based on a ratio of consolidated funded debt to consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") for the preceding twelve months (the “Leverage Ratio”), or at a LIBOR rate plus a margin (such margin not to exceed a per annum rate of 1.75%) based on the Leverage Ratio. The amount outstanding under the 2012 Term Loan may be prepaid at any time in whole or in part without premium or penalty, other than customary breakage costs, if any, subject to the terms and conditions of the term loan agreement. As of December 31, 2012, the 2012 Term Loan carried an annualized interest rate of 3.75%, which was calculated using the base rate plus a margin. In January 2013, we elected the LIBOR rate plus a margin option.
Our obligations under the 2012 Term Loan may be accelerated upon the occurrence of an event of default under the 2012 Term Loan, which includes customary events of default, including payment defaults, the inaccuracy of representations or warranties in the term loan agreement and cross defaults to material indebtedness, including the 2011 Credit Agreement (defined below).
On January 22, 2013, we entered into additional short term unsecured term loan agreements with each of HSBC Bank USA, National Association, TD Bank, N.A., and U.S. Bank National Association, each in the amount of $25.0 million (collectively, the “Facilities”). The key terms of the Facilities are substantially the same as the 2012 Term Loan, including the loan maturities on June 30, 2013 unless earlier payment is required under the terms of each respective loan agreement, except that there are no guaranties provided by any of our subsidiaries. The $75.0 million aggregate proceeds of the Facilities were used to partially pay down balances owed under the 2012 Term Loan, and in connection with such payment, BOA released our subsidiaries from their guaranty obligations under the 2012 Term Loan.
2011 Credit Agreement
On June 30, 2011, we entered into an unsecured senior credit facility (the “2011 Credit Agreement”) providing for a five-year term loan of $100.0 million and a five year revolving credit facility in the principal amount of up to $300.0 million. The borrowings all carry a variable interest rate based on LIBOR, prime, or a similar index, plus a margin (such margin not to exceed a per annum rate of 1.75%).
As of December 31, 2012, we had $192.5 million of principal borrowed under the revolving credit facility, $92.5 million of principal borrowed under the term loan, and borrowing availability of $107.5 million under the revolving credit facility.
In September 2011, we entered into an interest rate swap and an interest rate cap agreement. These interest rate hedges were deemed to be fully effective in accordance with ASC 815, “Derivatives and Hedging,” and, as such, unrealized gains and losses related to these derivatives are recorded as other comprehensive income. Principal in the amount of $100.0 million under the 2011 Credit Agreement has been hedged with an interest rate swap agreement and carries a fixed interest rate of 1.30% plus an applicable margin. Principal in the amount of $50.0 million has been hedged with an interest rate cap arrangement with an interest rate cap of 2.00% plus an applicable margin. As of December 31, 2012, our debt under the 2011 Credit Agreement, including the $100.0 million of principal hedged with an interest swap agreement, carried an average annualized interest rate of 1.85%.
During the six months ended December 31, 2012, we made principal payments of $2.5 million on the term loan. The term loan scheduled repayments under the 2011 Credit Agreement increase over time from 5% of the principal due in the first year to 60% of the principal due in the last year.
Additional Lines of Credit
We have an unsecured line of credit with JP Morgan UK in the amount of $4.5 million that bears interest at an annual rate ranging between 2.00% and 4.00%. We entered into this line of credit to facilitate business transactions. At December 31, 2012, we had $4.5 million available under this line of credit.
We have a cash pool facility with RBS Nederland, NV in the amount of 5.0 million Euros that bears interest at an annual rate ranging between 1.00% and 2.00%. We entered into this line of credit to facilitate business transactions. At December 31, 2012, we had 5.0 million Euros available under this line of credit.
We have a cash pooling arrangement with RBS Nederland, NV. Pooling occurs when debit balances are offset against credit balances and the overall net position is used as a basis by the bank for calculating the overall pool interest amount. Each legal entity owned by us and party to this arrangement remains the owner of either a credit (deposit) or a debit (overdraft) balance. Therefore, interest income is earned by legal entities with credit balances, while interest expense is charged to legal entities with debit balances. Based on the pool’s aggregate balance, the bank then (1) recalculates the overall interest to be charged or earned, (2) compares this amount with the sum of previously charged/earned interest amounts per account and (3) additionally pays/charges the difference. The gross overdraft balance related to this pooling arrangement was $69.2 million and $63.4 million at December 31, 2012 and June 30, 2012, respectively, and was included in cash and cash equivalents.