Safeway 2007 Annual Report Download - page 70

SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note D: Financing
Notes and debentures were composed of the following at year end (in millions):
2007 2006
Commercial paper $ 25.0 $–
Bank credit agreement, unsecured –52.3
Other bank borrowings, unsecured 99.7 5.3
Mortgage notes payable, secured 20.1 18.1
9.30% Senior Secured Debentures due 2007 –24.3
4.80% Senior Notes due 2007, unsecured –480.0
7.00% Senior Notes due 2007, unsecured –250.0
4.125% Senior Notes due 2008, unsecured 300.0 300.0
4.45% Senior Notes due 2008, unsecured 301.1 257.8
6.50% Senior Notes due 2008, unsecured 250.0 250.0
7.50% Senior Notes due 2009, unsecured 500.0 500.0
Floating Rate Notes due 2009, unsecured (interest at 5.19% as of December 29, 2007) 250.0 250.0
4.95% Senior Notes due 2010, unsecured 500.0 500.0
6.50% Senior Notes due 2011, unsecured 500.0 500.0
5.80% Senior Notes due 2012, unsecured 800.0 800.0
5.625% Senior Notes due 2014, unsecured 250.0 250.0
6.35% Senior Notes due 2017, unsecured 500.0 –
7.45% Senior Debentures due 2027, unsecured 150.0 150.0
7.25% Senior Debentures due 2031, unsecured 600.0 600.0
9.875% Senior Subordinated Debentures due 2007, unsecured –24.2
Other notes payable, unsecured 2.5 7.4
5,048.4 5,219.4
Less current maturities (954.9) (790.7)
Long-term portion $ 4,093.5 $ 4,428.7
Commercial Paper The amount of commercial paper borrowings is limited to the unused borrowing capacity under the
bank credit agreement. Commercial paper is classified as long term because the Company intends to and has the ability
to refinance these borrowings on a long-term basis through either continued commercial paper borrowings or utilization
of the bank credit agreement, which matures in 2012. The weighted-average interest rate on commercial paper
borrowings was 5.48% during 2007 and 5.56% at year-end 2007. There was $25.0 million of commercial paper
outstanding at year-end 2007 and none at year-end 2006.
Bank Credit Agreement On June 1, 2005, the Company entered into a $1,600.0 million credit agreement with a
syndicate of banks. On June 15, 2006, the Company amended the credit agreement to extend the termination date for
an additional year to June 1, 2011. On June 1, 2007, the Company amended the credit agreement again for purposes of
(i) extending the termination date of the credit agreement for an additional year to June 1, 2012, (ii) providing for two
additional one-year extensions of the termination date on the terms set forth in the amendment, and (iii) amending the
pricing levels (which are based on Safeway’s debt ratings or interest coverage ratio), pricing margins and facility fee
percentages for the loans and commitments under the revolving credit facility. The credit agreement, as amended (the
“Credit Agreement”), provides (i) to Safeway a $1,350.0 million, five-year, revolving credit facility (the “Domestic
Facility”), (ii) to Safeway and Canada Safeway Limited, a Canadian facility of up to $250.0 million for U.S. Dollar and
Canadian Dollar advances and (iii) to Safeway a $400.0 million sub-facility of the Domestic Facility for issuance of standby
and commercial letters of credit. The Credit Agreement also provides for an increase in the credit facility commitments up
to an additional $500.0 million, subject to the satisfaction of certain conditions. The restrictive covenants of the Credit
Agreement limit Safeway and its subsidiaries with respect to, among other things, creating liens upon its assets and
disposing of material amounts of assets other than in the ordinary course of business. Additionally, the Company is
required to maintain a minimum Adjusted EBITDA, as defined in the Credit Agreement, to interest expense ratio of 2.0 to
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