DEBT

Long-term debt consists of the following:



	Successor			Predecessor
	December 29, 2013			April 28, 2013			April 29, 2012
	(in millions)
6.625% senior unsecured notes, due August 2022, including unamortized premiums of $21.7 million (Successor) and unamortized discounts of $4.7 million (Predecessor)	$	1,021.3		$	995.3		$	—
10% senior secured notes, due July 2014, including unamortized discounts of $7.0 million (Predecessor)	—			—			357.4
10% senior secured notes, due July 2014, including unamortized premiums of $4.4 million (Predecessor)	—			—			229.4
7.75% senior unsecured notes, due July 2017, including unamortized premiums of $54.0 million (Successor)	538.4			500.0			500.0
5.25% senior unsecured notes, due August 2018	500.0			—			—
5.875% senior unsecured notes, due August 2021	400.0			—			—
7.75% senior unsecured notes, due May 2013	—			55.0			160.0
4% senior unsecured Convertible Notes, due June 2013, including unamortized discounts of $4.1 million (Predecessor) and $26.8 million (Predecessor)	—			395.9			373.2
Floating rate senior unsecured term loan, due May 2018	200.0			200.0			200.0
Floating rate senior unsecured term loan, due February 2014	—			200.0			—
Inventory Revolver, LIBOR plus 3.25%	145.0			—			—
Securitization Facility, the lender's cost of funds of 0.21% plus 1.15%	105.0			—			—
Various, interest rates from 0.0% to 5.20%, due February 2014 through June 2017	110.4			132.9			117.3
Total debt	3,020.1			2,479.1			1,937.3
Current portion	(47.3		)	(675.1		)	(62.5		)
Total long-term debt	$	2,972.8		$	1,804.0		$	1,874.8

As noted in Note 2—Merger and Acquisitions, existing long-term debt assumed by WH Group was adjusted to fair value based on quoted market prices. Premiums shown above as of December 29, 2013 represent the unamortized balance of the fair value adjustment to our 2022 Notes and 2017 Notes.

Scheduled principal payments on long-term debt for the next five years are as follows:



Fiscal Year	(in millions)
2014	$	47.3
2015	64.5
2016	254.4
2017	503.6
2018	675.0

2022 Notes

In August 2012, we issued $1.0 billion aggregate principal amount of ten year, 6.625% senior unsecured notes at a price equal to 99.5% of their face value in a registered public offering (2022 Notes). We received net proceeds of $981.2 million, after underwriting discounts and commissions and offering expenses, upon settlement of the 2022 Notes in August 2012. We incurred $18.0 million in transaction fees in connection with issuance of the 2022 Notes, which were being amortized over the ten-year life of the notes.

The unamortized amount of transaction fees incurred in connection with the issuance of the 2022 Notes was written off when we performed the preliminary allocation of the total purchase consideration to the assets and liabilities assumed by WH Group in the Merger.

Debt Extinguishments

2011 Notes

During fiscal 2011, we repurchased $522.2 million of our 7% senior unsecured notes due August 2011 (2011 Notes) for $543.1 million and recognized losses on debt extinguishment totaling $21.4 million, including the write-off of related unamortized premiums and debt costs.

During fiscal 2012, we redeemed the remaining $77.8 million of our 7% senior unsecured notes due August 2011.

2013 Notes and 2014 Notes

In January 2011, we commenced a Dutch auction cash tender offer to purchase for $450.0 million in cash (the January Tender Offer) the maximum aggregate principal amount of our outstanding 7.75% senior unsecured notes due May 2013 (2013 Notes) and our outstanding 10% senior secured notes due July 2014 (2014 Notes). As a result of the January Tender Offer, we paid $450.0 million to repurchase 2013 Notes and 2014 Notes with face values of $190.0 million and $200.9 million, respectively, and recognized losses on debt extinguishment totaling $71.1 million in the fourth quarter of fiscal 2011, including the write-off of related unamortized discounts and debt costs.

During fiscal 2012, we repurchased $59.7 million of our 2014 Notes for $68.3 million and recognized losses on debt extinguishment of $11.0 million, including the write-off of related unamortized discounts and debt costs.

In conjunction with the issuance of the 2022 Notes in July 2012, we commenced a tender offer to purchase any and all of our outstanding 2013 Notes and any and all of our outstanding 2014 Notes (the July 2012 Tender Offer). The July 2012 Tender Offer expired in August 2012. As a result of the July 2012 Tender Offer, we paid $649.4 million to repurchase 2013 Notes and 2014 Notes with face values of $105.0 million and $456.6 million, respectively. Also in August 2012, we exercised the redemption feature available under our 2014 Notes and paid $155.5 million to repurchase the remaining $132.8 million of our 2014 Notes. Net proceeds from the issuance of the 2022 Notes were used to make all of the repurchases of the 2013 Notes and 2014 Notes. As a result of these repurchases, we recognized losses on debt extinguishment totaling $120.7 million in fiscal 2013, including the write-off of related unamortized discounts, premiums and debt issuance costs.

In May 2013, we repaid the remaining outstanding principal amount on our 7.75% senior unsecured notes totaling $55.0 million.

2017 Notes and 2022 Notes

During the Successor Period, we repurchased $15.6 million and $0.4 million of our 2017 Notes and 2022 Notes, respectively, for $18.1 million and recognized losses on debt extinguishment of $1.7 million.

Debt Assumed

On July 31, 2013, Merger Sub issued the Merger Sub Notes as part of the financing for the acquisition of the Company. Upon the consummation of the Merger and release of the proceeds from escrow, the Merger Sub Notes became unsecured obligations of the Company ranking equally in right of payment with all of our existing and future senior unsecured indebtedness. The proceeds were used in part to repay the outstanding $200.0 million due on our Bank of America Term Loan. See Note 2—Merger and Acquisitions for further information on the Merger Sub Notes.

Working Capital Facilities

In June 2011, we refinanced our asset-based revolving credit agreement totaling $1.0 billion that supported short-term funding needs and letters of credit (the ABL Credit Facility) into two separate facilities: (1) an inventory-based revolving credit facility totaling $925.0 million, with an option to expand up to $1.225 billion (the Inventory Revolver), and (2) an accounts receivable securitization facility totaling $275.0 million (the Securitization Facility). We may request working capital loans and letters of credit under both facilities. As a result of the refinancing, we recognized a loss on debt extinguishment of $1.2 million in the first quarter of fiscal 2012 for the write-off of unamortized debt issuance costs associated with the ABL Credit Facility.

In January 2013, we partially exercised the accordion feature of our Second Amended and Restated Credit Agreement and increased the borrowing capacity of the Inventory Revolver from a total of $925.0 million to a total of $1.025 billion. All other terms and conditions of the Inventory Revolver were unchanged, including the limitation on the actual amount of credit that is available from time to time under the Inventory Revolver as a result of borrowing base valuations of our inventory, accounts receivable and certain cash balances.

We have the right to further exercise the accordion feature and increase its total revolving commitment by an additional aggregate amount not to exceed $200.0 million, to the extent that any one or more new or existing lenders commit to being a lender for the additional amount and certain other customary conditions are met.

Availability under the Inventory Revolver is a function of the level of eligible inventories, subject to reserves. The Inventory Revolver matures in June 2016. The unused commitment fee and the interest rate spreads are a function of our leverage ratio (as defined in the Second Amended and Restated Credit Agreement). As of December 29, 2013, the unused commitment fee rate and interest rate were 0.625% and LIBOR plus 3.25%, respectively. The Inventory Revolver includes financial covenants. The ratio of our funded debt to capitalization (as defined in the Second Amended and Restated Credit Agreement) may not exceed 0.5 to 1.0, and our EBITDA to interest expense ratio (as defined in the Second Amended and Restated Credit Agreement) may not be less than 2.5 to 1.0. We and our material U.S. subsidiaries are jointly and severally liable for, as primary obligors, the obligations under the Inventory Revolver, and those obligations are secured by a first priority lien on certain personal property, including cash and cash equivalents, deposit accounts, inventory, intellectual property, and certain equity interests. We incurred approximately $9.7 million in transaction fees in connection with the Inventory Revolver, which were being amortized over its five-year life.

The unamortized amount of transaction fees incurred in connection with the Inventory Revolver was written off when we performed the preliminary allocation of the total purchase consideration to the assets and liabilities assumed by WH Group in the Merger.

The Securitization Facility matures in May 2016. As part of the arrangement, all accounts receivable of our major Pork segment subsidiaries are sold to a wholly-owned “bankruptcy remote” special purpose vehicle (SPV). The SPV pledges the receivables as security for loans and letters of credit. The SPV is included in our consolidated financial statements and therefore, the accounts receivable owned by it are included in our consolidated balance sheet. However, the accounts receivable owned by the SPV are separate and distinct from our other assets and are not available to our other creditors should we become insolvent. As of December 29, 2013, the SPV held $539.0 million of accounts receivable and we had $105.0 million outstanding borrowings on the Securitization Facility.

The unused commitment fee rate and the interest rate under the Securitization Facility were 0.45% and 0.21% plus 1.15% as of December 29, 2013, respectively. We incurred approximately $1.3 million in transaction fees in connection with the Securitization Facility, which were being amortized over its original three-year life.

The unamortized amount of transaction fees incurred in connection with the Securitization Facility was written off when we performed the preliminary allocation of the total purchase consideration to the assets and liabilities assumed by WH Group in the Merger.

As of December 29, 2013, we had aggregate credit facilities and credit lines totaling $1.4 billion. Our unused capacity under these credit facilities and credit lines was $1.0 billion. These facilities and lines are generally at prevailing market rates. We pay commitment fees on the unused portion of the facilities.

Average borrowings under credit facilities and credit lines were $541.7 million, $349.4 million, $105.4 million, $99.8 million and $81.6 million at average interest rates of 3.0%, 3.0%, 5.2%, 4.9% and 4.8% during the Successor Period, Predecessor Period, fiscal year ended April 28, 2013, fiscal year ended April 29, 2012 and fiscal year ended May 1, 2011, respectively. Maximum borrowings were $759.3 million, $719.3 million, $229.9 million, $245.3 million and $256.9 million in the Successor Period, Predecessor Period, fiscal year ended April 28, 2013, fiscal year ended April 29, 2012 and fiscal year ended May 1, 2011, respectively. Total outstanding borrowings were $314.1 million as of December 29, 2013, $82.3 million as of April 28, 2013 and $64.9 million as of April 29, 2012 with average interest rates of 2.8%, 4.4% and 5.7%, respectively.

Rabobank Term Loan

In August 2012, we amended our $200.0 million term loan with Rabobank (the Rabobank Term Loan). As a result of the amended agreement, our maturity date was extended from June 2016 to May 2018 and the interest rate increased to an annual rate equal to LIBOR plus 4%, or at our election, a base rate plus 3%.

The amended agreement contains affirmative and negative covenants that, among other things, limit or restrict our ability to create liens and encumbrances; incur debt; make acquisitions and investments; dispose of or transfer assets; pay dividends or make other payments in respect of our stock; in each case, subject to certain qualifications and exceptions that are generally consistent with the terms and conditions of the 2022 Notes. In addition, the amended agreement contains a financial covenant requiring us to maintain a minimum interest coverage ratio (ratio of consolidated EBITDA to consolidated interest expense) of not less than 1.75 to 1.0 commencing with our third quarter of fiscal 2013.

Convertible Notes

In July 2008, we issued $400 million aggregate principal amount of 4% convertible senior notes due June 30, 2013 (the Convertible Notes) in a registered offering. The Convertible Notes were senior unsecured obligations. The Convertible Notes were payable with cash and, at certain times, were convertible into shares of our common stock based on an initial conversion rate, subject to adjustment, of 44.082 shares per $1,000 principal amount of Convertible Notes (which represents an initial conversion price of approximately $22.68 per share). Upon conversion, a holder would receive cash up to the principal amount of the Convertible Notes and shares of our common stock for the remainder, if any, of the conversion obligation.

On April 1, 2013, holders obtained the ability to convert their Convertible Notes at any time prior to the close of business on the third scheduled trading day immediately preceding the maturity date.

On the date of issuance of the Convertible Notes, our nonconvertible debt borrowing rate was determined to be 10.2%. Based on that rate of interest, the equity component of the Convertible Notes was determined to be $95.8 million.

In connection with the issuance of the Convertible Notes, we entered into separate convertible note hedge transactions with respect to our common stock to reduce potential economic dilution upon conversion of the Convertible Notes, and separate warrant transactions (collectively referred to as the Call Spread Transactions). We purchased call options that permitted us to acquire up to approximately 17.6 million shares of our common stock, subject to adjustment, which is the number of shares initially issuable upon conversion of the Convertible Notes. In addition, we sold warrants permitting the purchasers to acquire up to approximately 17.6 million shares of our common stock, subject to adjustment. See Note 11—Equity for more information on the Call Spread Transactions.

In July 2013, we repaid the outstanding principal amount on our Convertible Notes totaling $400.0 million. As part of the settlement of the Convertible Notes, we delivered 3,894,476 shares of our common stock to the holders of the notes. Simultaneously, we exercised a call option, which we entered into in connection with the original issuance of the Convertible Notes, entitling us to receive 3,894,510 shares from the counter-parties. As a result, we retired 34 net shares of our common stock upon the settlement of the Convertible Notes.

In October 2013, we paid $79.4 million to holders of the warrants to unwind the contracts due to the change of control related to the Merger.