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Debt (Notes)
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3 Months Ended | ||||||||||||||||||||||||||||||||
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Mar. 29, 2014
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
| Debt |
Debt
6.75% Senior Notes Due 2019
On February 26, 2014, the Company issued $600 million of 6.75% Senior Notes due 2019 (6.75% Notes). The 6.75% Notes are general unsecured senior obligations of the Company. Interest is payable on March 1 and September 1 of each year beginning September 1, 2014 until the maturity date of March 1, 2019. The 6.75% Notes are governed by the terms of an indenture (the 6.75% Indenture) dated February 26, 2014 between the Company and Wells Fargo Bank, National Association, as trustee.
At any time (which may be more than once) before March 1, 2017, the Company may redeem up to 35% of the aggregate principal amount of the 6.75% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price not greater than 106.75% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. At any time (which may be more than once) before March 1, 2019, the Company may redeem some or all of the 6.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as set forth in the 6.75% Indenture).
Holders have the right to require the Company to repurchase all or a portion of its 6.75% Notes in the event that the Company undergoes a change of control, as defined in the 6.75% Indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 6.75% Indenture) may result in the acceleration of the maturity of the 6.75% Notes.
The 6.75% Indenture contains certain covenants that limit, among other things, the Company’s ability and the ability of its subsidiaries, to:
The 6.75% Notes rank equally with the Company’s existing and future senior debt and are senior to all of the Company’s future subordinated debt. The 6.75% Notes rank junior to all of the Company’s future senior secured debt to the extent of the collateral securing such debt and are structurally subordinated to all existing and future debt and liabilities of the Company’s subsidiaries.
The Company may elect to purchase or otherwise retire the 6.75% Notes with cash, stock or other assets from time to time in open market or private negotiated transactions, either directly or through intermediaries, or by tender offer, when the Company believes the market conditions are favorable to do so.
6.00% Convertible Senior Notes Due 2015
During the first quarter of 2014, the Company repurchased $64 million in aggregate principal amount of its 6.00% Convertible Senior Notes Due 2015 (6.00% Notes) in open market transactions for $69 million, which included payment of accrued and unpaid interest of $1 million. Also, during the first quarter of 2014, the Company repurchased a portion of its 6.00% Notes through a partial tender offer. The Company repurchased $423 million aggregate principal amount of the 6.00% Notes for $460 million in cash, which included payment of accrued and unpaid interest of $10 million. The Company incurred a total loss of $10 million in connection with the foregoing repurchases of the 6.00% Notes. As of March 29, 2014, the outstanding aggregate principal amount of the 6.00% Notes was $42 million and the remaining carrying value was $41 million, net of a debt discount of $1 million.
8.125% Senior Notes Due 2017
During the first quarter of 2014, the Company repurchased $48 million in aggregate principal amount of its 8.125% Senior Notes Due 2017 (8.125% Notes) pursuant to a partial tender offer for $51 million, which included payment of accrued and unpaid interest of $1 million. The Company incurred a total loss of $5 million in connection with the foregoing repurchase of the 8.125% Notes. As of March 29, 2014,the outstanding aggregate principal amount of the 8.125% Notes was $452 million and the remaining carrying value was $427 million, net of a debt discount of $25 million.
The agreements governing the Company's 6.00% Notes, 8.125% Notes, 6.75% Notes, 7.75% Senior Notes due 2020 and 7.50% Senior Notes due 2022 and the Company's senior secured asset based line of credit for a principal amount of up to $500 million (Secured Revolving Line of Credit) contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under the Secured Revolving Line of Credit to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable.
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