Safeway 2011 Annual Report Download - page 68

SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
U.S. borrowings under the credit agreement carry interest at one of the following rates selected by the Company: (1) the
prime rate; (2) a rate based on rates at which Eurodollar deposits are offered to first-class banks by the lenders in the
bank credit agreement plus a pricing margin based on the Company’s debt rating or interest coverage ratio (the “Pricing
Margin”); or (3) rates quoted at the discretion of the lenders. Canadian borrowings denominated in U.S. dollars carry
interest at one of the following rates selected by the Company: (a) the Canadian base rate; or (b) the Canadian Eurodollar
rate plus the Pricing Margin. Canadian borrowings denominated in Canadian dollars carry interest at one of the following
rates selected by the Company: (1) the Canadian prime rate; or (2) the rate for Canadian bankers acceptances plus the
Pricing Margin.
During 2011, the Company paid facility fees ranging from 0.05% to 0.175% on the total amount of the credit facility.
Term Credit Agreement In December 2011, Safeway entered into a $700.0 million term credit agreement with a
syndicate of banks which matures on March 19, 2015. The term credit agreement provides an up to $700.0 million three-
year and three-month senior term credit facility available to Safeway as a delayed draw term credit facility in two draws
(each of which shall be in minimum amounts of $100.0 million and increments of $25.0 million) from the closing date
through, on or prior to, April 19, 2012. Loans under the term credit agreement carry interest, at Safeway’s option, at
either a Base Rate (as defined in the Term Credit Agreement) plus a pricing margin or a Eurodollar Rate (as defined in the
Term Credit Agreement) plus a pricing margin. Semi-annual principal payments equal to 5.50% of the aggregate
principal amount of the term loans are required beginning on June 30, 2013, with any remaining principal balances due
at the maturity of the term credit agreement. The term credit agreement covenants are substantially similar to the
covenants contained in Safeway’s existing bank credit agreement dated as of June 1, 2011, as previously disclosed under
the caption “Bank Credit Agreement.” As of December 31, 2011, the Company was in compliance with these covenant
requirements. As of December 31, 2011, there were no borrowings under the term credit agreement, and total unused
borrowing capacity under the term credit agreement was $700.0 million.
During December 2011, the Company paid commitment fees of 0.175% on the total amount available to be drawn
under the term credit agreement.
Shelf Registration On October 24, 2011, the Company filed a shelf registration statement (the “Shelf”) with the SEC
which enables Safeway to issue an unlimited amount of debt securities and/or common stock. The Shelf expires on
October 24, 2014. The Safeway Board of Directors authorized issuance of up to $3.0 billion of securities under the Shelf.
As of December 31, 2011, $2.2 billion of securities were available for issuance under the board’s authorization.
Senior Unsecured Indebtedness Canada Safeway Limited, an indirect, wholly-owned subsidiary of Safeway, issued
CAD300 million of 3.00% Second Series Notes on March 31, 2011, which mature on March 31, 2014. On
December 5, 2011, Safeway issued $400.0 million of 3.40% Senior Notes and $400.0 million of 4.75% Senior Notes,
which mature on December 1, 2016 and December 1, 2021, respectively.
Additionally, Safeway issued $500.0 million of 3.95% Senior Notes on August 3, 2010, which mature on August 15,
2020.
Mortgage Notes Payable Mortgage notes payable at year-end 2011 have remaining terms ranging from less than one
year to 11 years, had a weighted-average interest rate during 2011 of 6.66% and are secured by properties with a net
book value of approximately $45.1 million.
Other Notes Payable Other notes payable at year-end 2011 have remaining terms ranging from three years to 24
years and a weighted average interest rate of 6.74% during 2011.
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