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Long-Term Debt

9 Months Ended

Jun. 25, 2011

10.

Long-Term Debt

Debt outstanding consists of the following (in thousands):


	June 25, 2011		September 25, 2010
Revolving credit facility, USD	$	—	$	—
Revolving credit facility, multicurrency		170,213		—
Term loan A		248,438		—
Term loan B		—		—
Other		3,263		13
Revolving credit facility		—		173,000
Term loan A facility		—		45,000
Term loan A1 faclity		—		136,500

Total long-term debt		421,914		354,513
Less current portion		5,238		19,009

Long-term portion	$	416,676	$	335,504

On June 9, 2011, the Company entered into an Amended and Restated Credit Agreement ("Restated Credit Agreement") with Bank of America, N.A. and other lenders, which restated its prior credit agreement that it had entered into on December 17, 2010 in conjunction with the Van Houtte acquisition ("Credit Agreement"). The Company repaid borrowings under the term loan B facility and the outstanding balance on the U.S. revolving credit facility under the Credit Agreement with proceeds generated from the issuance of common stock (see Note 9, Stockholders Equity). The Restated Credit Agreement eliminated the term loan B facility; extended the maturity of the term loan A facility, the U.S. revolving credit facility (including $350.0 million in additional U.S. revolving credit commitments) and the alternative currency revolving credit facility that were included in the Credit Agreement to June 9, 2016; and decreased pricing on these facilities. The Restated Credit Agreement consists of (i) an $800.0 million U.S. revolving credit facility, (ii) a $200.0 million alternative currency revolving credit facility, and (iii) a $248.4 million term loan A facility.

The term loan A facility requires quarterly principal repayments. The term loan A and revolving credit facilities bear interest at a rate equal to an applicable margin plus, at the Company's option, either (a) a eurodollar rate determined by reference to the cost of funds for deposits for the interest period and currency relevant to such borrowing, adjusted for certain costs, or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 0.50%, (2) the prime rate announced by Bank of America, N.A. from time to time and (3) the eurodollar rate plus 1.00%. The applicable margin with respect to the term loan A and revolving credit facilities is a percentage per annum varying from 0.5% to 1.0% for base rate loans and 1.5% to 2.0% for eurodollar rate loans, based upon the Company's leverage ratio. The average effective interest rate at June 25, 2011 and September 25, 2010 was 3.4% and 2.7%, respectively, excluding amortization of deferred financing charges. The Company also pays a commitment fee on the average daily unused portion of the revolving credit facilities.

The Restated Credit Agreement is secured by substantially all assets of the Company and its domestic wholly-owned material subsidiaries. The Restated Credit Agreement contains customary negative covenants, subject to certain exceptions, including limitations on: liens; investments; indebtedness; merger and consolidations; asset sales; dividends and distributions or repurchases of the Company's capital stock; transactions with affiliates; certain burdensome agreements; and changes in the Company's lines of business.

The Restated Credit Agreement requires the Company to comply on a quarterly basis with a consolidated leverage ratio and a consolidated interest coverage ratio. At June 25, 2011, the Company was in compliance with these covenants. In addition, the Restated Credit Agreement contains certain mandatory prepayment requirements and customary events of default.

At June 25, 2011 and September 25, 2010, respectively, the Company had $4.3 million and $0.7 million in outstanding letters of credit under the Restated Credit Agreement and a former credit facility that preceded the Credit Agreement ("Former Credit Facility"), respectively.

In connection with the Credit Agreement and the Restated Credit Agreement, the Company incurred debt issuance costs of $45.8 million initially were deferred and included in Other Long-Term Assets on the Consolidated Balance Sheet and amortized as interest expense over the life of the respective loan using the effective interest rate method. The Company incurred a loss of $17.1 million and $19.7 million for the thirteen and thirty-nine weeks ended June 25, 2011, respectively, primarily on the extinguishment of the term loan B facility under the Credit Agreement and the extinguishment of the Former Credit Facility resulting from the write-off of debt issuance costs and the original issue discount. The loss on the extinguishment of debt is included in Interest Expense on the Consolidated Statement of Operations.

The Company enters into interest rate swap agreements to limit a portion of its exposure to variable interest rates by entering into interest rate swap agreements which effectively fix the rates. In accordance with the swap agreements and on a monthly basis, interest expense is calculated based on the floating 30-day Libor rate and the fixed rate. If interest expense as calculated is greater based on the 30-day Libor rate, the swap counterparty pays the difference to the Company; if interest expense as calculated is greater based on the fixed rate, the Company pays the difference to the swap counterparty.

Below is a summary of the Company's derivative instruments in effect as of June 25, 2011 mitigating interest rate exposure of variable-rate borrowings (in thousands):


Derivative Instrument	Hedged Transaction		Notional Amount of Underlying Debt		Fixed Rate Received			Maturity
Swap		30-day Libor		40,000		1.38	%		2012
Swap		30-day Libor		20,000		3.87	%		2013
Swap		30-day Libor		43,000		1.20	%		2013
Swap		30-day Libor		20,000		2.54	%		2016
Swap		30-day Libor		30,000		2.54	%		2016
Swap		30-day Libor		50,000		2.54	%		2016
Swap		30-day Libor		30,000		2.54	%		2016

			$	233,000

For the thirteen weeks ended June 25, 2011 and June 26, 2010, the Company paid approximately $1.3 million and $0.6 million, respectively, in additional interest expense pursuant to swap agreements. For the thirty-nine weeks ended June 25, 2011 and June 26, 2010, the Company paid approximately $2.6 million and $1.9 million, respectively, in additional interest expense pursuant to swap agreements.

In addition, the Company has an interest rate cap to limit the interest rate exposure of $167.0 million in variable-rate borrowings.

Maturities

Scheduled maturities of long-term debt are as follows (in thousands):


Fiscal Year
Remainder 2011	$	126
2012		6,697
2013		6,692
2014		12,919
2015		19,167
Thereafter		376,313

	$	421,914