00 Ahold ANNUAL REPORT 2002 77
BOARD GOVERNANCE HIGHLIGHTS OPERATING REVIEW FINANCIAL INVESTOR REL AT IONS
For a detailed discussion of this debt, please see Note 24 to our financial statements.
Credit facilities
In the past, our primary line of credit, entered into in December 1996, was a USD 1 billion, seven-year multi-currency
revolving credit facility. In March 1998, we entered into an additional USD 500 million, four-year standby multi-currency
revolving credit facility.
In fiscal 2002, the USD 1.0 billion facility referred to above was cancelled and the USD 500 million facility referred
to above expired and both were replaced on July 18, 2002, with the 2002 Credit Facility. The 2002 Credit Facility
comprised a USD 2 billion multi-currency dual tranche revolving credit facility bearing an interest rate of LIBOR (or
EURIBOR for Euro-denominated borrowings) plus an applicable margin. The applicable margin was determined by
(i) our most recent credit rating, as published by Moody's or S&P, and (ii) which tranche of the facility, A or B, was
utilized. Tranche A, which permitted borrowings of up to USD 500 million, offered a maximum loan term of one year,
and had a margin ranging from 0.30% to 0.455%, and Tranche B, which permitted borrowings of up to USD 1.5 billion,
offered a maximum loan term of five years, and had a margin ranging from 0.35% to 0.50%. In addition, the 2002
Credit Facility provided for up to USD 150 million in letters of credit with a commission rate of 0.40%. The 2002 Credit
Facility had, at fiscal year-end 2002, an applicable borrowing rate of LIBOR plus 0.35% for the outstanding drawings
under Tranche A, and LIBOR plus 0.40% for the outstanding drawings under Tranche B. At fiscal year-end 2002, we had
outstanding borrowings under the 2002 Credit Facility of USD 80 million in loans, of which USD 20 million was drawn
under Tranche A and USD 60 million was drawn under Tranche B, and USD 150 million in letters of credit which we used
primarily to support our insurance obligations.
As discussed above, given the nature of the issues affecting us, on March 3, 2003, we replaced our 2002 Credit Facility,
under which, as of that date, USD 550 million in borrowings was drawn and USD 150 million in letters of credit were
outstanding, with the 2003 Credit Facility. The 2003 Credit Facility, as amended, provides for aggregate borrowings of
up to EUR 600 million made available to Albert Heijn and USD 2.2 billion, including up to USD 400 million in letters of
credit, made available to Stop Shop. This facility is comprised of an unsecured tranche of USD 915 million available to
Stop Shop, with the remainder of the facility secured. Subject to certain conditions, we may use borrowings under the
2003 Credit Facility to refinance and repay intercompany indebtedness, fund intercompany loans and for working capital
of Albert Heijn and Stop and Shop and we may use letters of credit for general corporate purposes only. As of October 3,
2003, we had outstanding borrowings under the 2003 Credit Facility as follows:
- USD 750 million in loans with a current interest rate of 4.37% and a maturity date of October 28, 2003;
- EUR 600 million in loans with a current interest rate of 5.36% and a maturity date of October 28, 2003; and
- USD 353 million of letters of credit with a current fee of 3.25% and a maturity date of February 23, 2004.
Borrowings under the 2003 Credit Facility mature at the end of their respective interest periods (generally bi-weekly),
subject to being re-borrowed upon their maturity. We intend to continue to roll over these amounts as they become due
until either the expiration of the 2003 Credit Facility in February 2004 or its refinancing.
Other borrowings
We are party to an EMTN program, under which, and subject to market conditions, we can issue senior or subordinated
and rated or unrated notes denominated in any currency agreed between us and the relevant dealer. The maximum amount
of notes issuable under the EMTN program was increased from EUR 5.0 billion to EUR 7.0 billion during fiscal 2002.
Notes issued under the EMTN program contain customary restrictive covenants, including negative pledge covenants. As of
fiscal year-end 2002, using the applicable exchange rates at fiscal year-end 2002, we had outstanding an aggregate of
EUR 4.7 billion in notes under the EMTN program, and using the applicable exchange rates at time of issuance, we had
outstanding an aggregate of EUR 5.0 billion in notes under the EMTN program. The notes have maturity dates ranging
from 2005 through 2031. Most recently, we issued a EUR 40 million note under this EMTN program on February 5,
2002, with an interest rate of 5.625% and a maturity of December 17, 2008.
On June 14, 2002, we obtained a EUR 50 million loan from Credit Agricole with a floating interest rate of EURIBOR
0.4% and a maturity date of June 14, 2007. In addition, during the course of fiscal 2002, our Spanish subsidiary, Ahold
Supermercados, restructured its external debt in an effort to reduce its number of banking relationships. As a result, four
credit facilities in the aggregate amount of EUR 161.5 million were established or extended.
