Subsequent Events

6 Months Ended

Jul. 01, 2017

Subsequent Events [Abstract]

Subsequent Events

15 Subsequent Events

On July 26, 2017, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”), which amends, modifies and adds provisions to the Credit Agreement, as defined in Note 8, Long-Term Debt.

The A&R Credit Agreement provides for (i) a new term loan of $687.5 million (“Term Loan A”), maturing July 2021, initially priced at LIBOR + 2.00%, with the opportunity for reduced pricing upon attainment of certain debt leverage levels; (ii) an upsized $500 million revolving credit facility (increased from $250 million), on which $105 million was drawn at closing (together, the Term Loan A and revolving credit facility are the “New Facility”). On August 7, proceeds from the New Facility, including an additional draw of $110 million on the revolving credit facility, were used to redeem $750 million of its 7.25% senior notes, maturing October 2022 (notice was provided on July 6) and pay related redemption costs. The company plans to redeem the remaining $300 million of its 7.25% senior notes by the end of 2017 through lower-cost financing arrangements, including an accounts receivable securitization facility.

The Company also amended its $1.4 billion Term Loan B facility maturing October 2021, reducing the interest rate by 50 bps to LIBOR + 2.00% effective July 26, 2017. In addition, the Company retired $75 million of the principal balance of Term Loan B upon closing of the A&R Credit Agreement. As previously communicated, the company expects to continue to make prepayments of principal on the Term Loan B.

The outstanding long-term debt balance following the August 7, 2017 transactions was $2.5 billion. The Company has incurred $55 million of redemption and transaction fees and $13 million of non-cash accelerated amortization of debt issuance costs and discounts as of August 7, 2017.

During fiscal 2017 and as a result of this debt restructuring, the Company expects to incur approximately $72 million of redemption costs and transaction fees, and approximately $18 million of non-cash accelerated amortization of debt issuance costs and discounts.