Note 7 - Borrowings
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Jun. 30, 2012
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Debt Disclosure [Text Block] |
Total
debt obligations at June 30 consist of the following (in
thousands):
Senior
Notes
On
September 27, 2005, we completed a private offering of
$200.0 million of ten-year senior unsecured notes due 2015
(the "Senior Notes"). The Senior Notes were offered by
Global and have an annual coupon rate of 5.375% with
interest payable semi-annually in arrears on April 1 and
October 1 of each year. Proceeds received in connection
with the issuance of the Senior Notes, net of a related
discount of $1.6 million, totaled $198.4 million. We used
the net proceeds from the offering to expand our retail
network, invest in our manufacturing and logistics
operations, and for other general corporate purposes. As of
June 30, 2012, outstanding borrowings related to this
transaction have been included in the Consolidated Balance
Sheets within long-term debt. The discount on the Senior
Notes is being amortized to interest expense over the life
of the related debt as is debt issuance costs of $2.0
million primarily for banking, legal, accounting, rating
agency, and printing services and $0.8 million of losses on
settled forward contracts entered in conjunction with this
debt issuance. During the current fiscal year, the Company
repurchased $12.0 million of the Senior Notes in several
unsolicited transactions. During the prior fiscal year, the
Company repurchased $34.6 million of the Senior Notes in
several unsolicited transactions.
The
Senior Notes may be redeemed in whole or in part, at
Global’s option at any time at the greater of (i)
100% of the principal amount of the notes to be redeemed
and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the Senior
Notes to be redeemed, discounted to the date of redemption
on a semi-annual basis at the applicable treasury rate plus
20 basis points, plus, in each case, accrued and unpaid
interest to the redemption date. In the event of default,
the trustee or the holders of 25% of the outstanding
principal amount of the Senior Notes may accelerate payment
of principal, premium, if any, and accrued and unpaid
interest. Events of default include failure to pay in
accordance with the terms of the indenture, including
failure, under certain circumstances, to pay indebtedness
other than the Senior Notes. As of June 30, 2012, we are in
compliance with the terms and conditions and all covenants
of the Senior Notes.
Revolving
Credit Facility
The
Company has a senior secured, asset-based, revolving credit
facility (the “Facility”) which provides
revolving credit financing of up to $50 million, subject to
borrowing base availability, and includes a right for the
Company to increase the total facility to $100 million
either with existing or additional lenders subject to
certain conditions. The Facility expires March 25, 2016, or
June 26, 2015 if the Company’s Senior Notes (as
defined below) have not been refinanced. At the
Company’s option, revolving loans under the Facility
bear interest at an annual rate of either:
The
Company pays a
commitment fee of 0.25% per annum on the unused portion of
the Facility and participation fees on issued letters of
credit at an annual rate of 1.0% to 2.5%, based on the
average availability and the letter of credit type. If the
average monthly availability is less than the greater of
(i) 12.5% of the aggregate commitment and (ii) $6.3
million, the Company’s fixed charge coverage ratio
may not be less than 1 to 1 for any period of four
consecutive fiscal quarters. Certain payments are
restricted if the availability of the collateral supporting
the facility falls below $10 million or 20% of the facility
size.
The
Facility is secured by all property owned, leased or
operated by the Company in the United States excluding any
real property owned by the Company and contains customary
covenants which may limit the Company’s ability to
incur debt; engage in mergers and consolidations; make
restricted payments (including dividends); sell certain
assets; and make investments. At June 30, 2012, we had no
revolving loans and $0.6 million of standby and trade
letters of credit outstanding under the Facility. Remaining
availability under the facility totaled $49.4 million
subject to limitations set forth in the agreement and as a
result, the coverage charge ratio, and other restricted
payment limitations did not apply. As of June 30, 2012, we
are in compliance with all the covenants of the
Facility.
For
fiscal years ended June 30, 2012, 2011 and 2010, the
weighted-average interest rates applicable under our
outstanding debt obligations for each year was
approximately 5.5%. Aggregate scheduled maturities of our
debt obligations for each of the five fiscal years
subsequent to June 30, 2012, and thereafter are as follows
(in thousands):
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