Note 13 – Long-Term Debt

Private Offering

On October 15, 2014, the Company completed a private offering of $1.05 billion aggregate principal of 7.25% Senior Notes due October 15, 2022. The Senior Notes yielded an effective interest rate of 7.61% at issuance. The Senior Notes are governed by the terms of an indenture, dated as of October 15, 2014, by and among the Company and U.S. Bank National Association, as Trustee. Interest on the Senior Notes is payable in cash on April 15 and October 15 of each year.

The Indenture covering the Senior Notes contains certain various restrictive and affirmative covenants. In addition, the Senior Notes are guaranteed jointly and severally, on a senior and unsecured basis by the Company’s direct and indirect wholly-owned existing and future domestic restricted subsidiaries, subject to certain exceptions.

Credit Facilities

Borrowings under the Term Loan bear interest at a variable rate plus an applicable margin, subject to an all-in floor of 4.75%. As of October 3, 2015, the Term Loan interest rate was 4.75%. Interest payments are payable quarterly. The Company has entered into interest rate swaps to manage interest rate risk on its long-term debt. See Note 11 Derivative Instruments.

The credit agreement requires the Company to prepay the Term Loan and Revolving Credit Facility, under certain circumstances or transactions defined in the credit agreement. Also, the Company may make optional prepayments of the Term Loans, in whole or in part, without premium or penalty. The Company made such optional principal prepayments of $130.0 million during the nine months ended October 3, 2015. On November 3, 2015, the Company made an additional optional principal prepayment of $20.0 million. Unless satisfied by further optional prepayments, the Company is required to make a scheduled principal payment of $2.05 billion due on October 27, 2021.

The Revolving Credit Facility is available for working capital and other general corporate purposes including letters of credit. The amount (including letters of credit) shall not exceed $250.0 million. As of October 3, 2015, the Company had established letters of credit amounting to $3.2 million, which reduced funds available for other borrowings under the agreement to $246.8 million. The Revolving Credit Facility will mature and the commitments thereunder will terminate on October 27, 2019.

Borrowings under the Revolving Credit Facility bear interest at a variable rate plus an applicable margin. As of October 3, 2015, the Revolving Credit Facility interest rate was 3.25%. Interest payments are payable quarterly. As of October 3, 2015 and December 31 2014, the Company did not have any borrowings against the Revolving Credit Facility.

The Credit Facilities contains various restrictive and affirmative covenants and are collateralized by a security interest in substantially all of the Company’s assets as defined in the security agreement and guaranteed by its direct and indirect wholly-owned existing and future domestic restricted subsidiaries, subject to certain exceptions.

The following table summarizes the carrying value of the Company’s debt (in thousands):


	As of
	October 3, 2015			December 31, 2014
Senior Notes	$	1,050,000		$	1,050,000
Term Loan		2,070,000			2,200,000
Less debt issuance costs		(27,196	)		(29,785	)
Less unamortized discounts		(49,579	)		(59,516	)

Total outstanding debt		3,043,225			3,160,699
Current maturities of long-term debt		0			16,500
Less: current portion of unamortized discounts		0			(8,978	)
Less: current portion of debt issuance costs		0			(3,313	)

Total short-term debt		0			4,209

Long-term debt, less current maturities	$	3,043,225		$	3,156,490

The estimated fair value of the Company’s long-term debt approximated $3.2 billion at October 3, 2015 and $3.3 billion at December 31, 2014. These fair value amounts represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and does not represent the settlement value of these long-term debt liabilities to the Company. The fair value of the long-term debt will continue to vary each period based on fluctuations in market interest rates, as well as changes to the Company’s credit ratings. This methodology resulted in a Level 2 classification in the fair value hierarchy.