24
Ahold Annual Report 2003
Financial Statements
153
Credit facilities
March 2003 and December 2003 Credit Facility
On March 3, 2003, the Company replaced the 2002 Credit Facility, under which USD 550 was drawn and USD 150
in letters of credit were outstanding as of February 24, 2003, with the March 2003 Credit Facility. The March 2003
Credit Facility provided for aggregate borrowings of up to EUR 600 and USD 2,200 in two tranches. The borrowings
under the EUR 600 tranche and under the USD 1,285 tranche were collateralized by a pledge of shares of Ahold's
significant Dutch and U.S. subsidiaries, as well as security over certain intellectual property rights relating to Albert
Heijn and Stop Shop and certain Dutch and U.S. intercompany receivables.
The March 2003 Credit Facility carried an initial interest rate of LIBOR (or EURIBOR for Euro-denominated
borrowings) plus a margin of 3.25%, which margin was subject to a ratings ratchet that could increase the margin
to 4.00% if Ahold's corporate credit rating was further downgraded (to B+ (S&P)/B1 (Moody's) or lower) or if no
rating was assigned to Ahold, and could decrease the margin to 1.00% if its rating became investment grade
(BBB- (S&P)/Baa3 (Moody's) or higher). Ahold paid fees of 3.25% per annum on the outstanding amount of each
letter of credit, subject to the same ratings ratchet discussed above. The March 2003 Credit Facility also contained
customary covenants and events of default. Ahold was permitted to use borrowings under the 2003 Credit Facility
to refinance intercompany indebtedness, fund intercompany loans, provide for working capital and for general
corporate purposes.
On December 17, 2003 the Company executed, and on December 23 the Company amended, the December
2003 Credit Facility with ABN AMRO Bank N.V. ("ABN AMRO"), Bank of America, N.A., Goldman Sachs Credit
Partners, L.P., ING Bank N.V., J.P. Morgan Chase Bank and certain banks and financial institutions, as lenders
(the "Lenders"). The December 2003 Credit Facility provides for credit in an aggregate amount of up to EUR 300
and USD 1,450. The December 2003 Credit Facility replaces, in its entirety, the March 2003 Credit Facility, which
had an original maturity date of February 2004. Albert Heijn and Stop Shop are able to utilize the December 2003
Credit Facility as described below.
The December 2003 Credit Facility is comprised of the following three facilities:
Euro Facility: a EUR 300 three-year revolving credit facility made available to Albert Heijn B.V. with a final
maturity date of December 17, 2006 (the "AH RCF Tranche");
Dollar Facility: a USD 650 three-year revolving credit facility made available to Stop Shop with a final maturity
date of December 17, 2006 (the "S&S RCF Tranche"). The S&S RCF Tranche includes a USD 200 swingline
facility for borrowings on a same day basis (the "Swingline Facility"); and
Letter of Credit Facility: a USD 800 three-year letter of credit facility made available to Stop Shop with a final
maturity date of December 17, 2006.
Interest rate and fees
Loans under the AH RCF Tranche and the S&S RCF Tranche (other than under the Swingline Facility) may be
borrowed, at an interest rate of LIBOR (for borrowings under the S&S RCF Tranche) or EURIBOR (for borrowings
under the AH RCF Tranche) plus a margin of not less than 2.75% during the initial six months of the credit facility.
Following the initial six month period, or as from June 17, 2004, loans may be drawn under the AH RCF Tranche
and the S&S RCF Tranche with a margin which is subject to a ratings ratchet that could increase the margin to up to
3.50% if Ahold's credit ratings are further downgraded (to corporate credit rating B+ by S&P or senior implied credit
rating B1 by Moody's, or lower) or if no rating is assigned. The margin will decrease to 1.00% if Ahold's credit rating
becomes investment grade (to corporate credit rating BBB- by S&P or senior implied credit rating Baa3 by Moody's,
or higher). Ahold will be required to pay fees of no lower than 2.75% per annum on the outstanding amount of each
letter of credit, subject to the same ratings ratchet discussed above.
A commitment fee per annum (calculated on a daily basis) of 40% of the applicable margin must be paid
quarterly in arrears in respect of all commitments which are undrawn and uncancelled under the December 2003
Credit Facility. A utilization fee will be required to be paid quarterly in arrears on amounts used under the AH RCF
Tranche and the S&S RCF Tranche computed at the rate of (i) 0.25% per annum for each day the amount utilized
under the AH RCF Tranche and the S&S RCF Tranche equals or exceeds one-third of the USD committed amount,
as at the Signing Date, but is less than two-thirds of that amount; and (ii) 0.50% per annum for each day the
amount utilized under the AH RCF Tranche and the S&S RCF Tranche equals or exceeds two-thirds of the USD
committed amount, as at the Signing Date.
