Note 4 -- Long-Term Debt and Credit Arrangements

As of April 26, 2013, long-term debt was comprised solely of an interest-free loan of $1,000, due ten years from the date of borrowing, with imputed interest, which as a result is discounted to $816 on the Consolidated Balance Sheets. In fiscal 2012, long-term debt was comprised of the following:

In fiscal 2012, we obtained a $300,000 variable-rate revolving credit facility (“credit facility”), of which $13,749 is reserved for certain stand-by letters of credit. The credit facility is intended to provide us with liquidity options and to support our primary growth and return initiatives. The credit facility extends over a period of five years and requires us to pay interest on outstanding borrowings at a rate based on London Interbank Offered Rate (“LIBOR”) or the Base Rate plus a margin based on our leverage ratio, ranging from 0.75% to 2.00% per annum for LIBOR, and ranging from 0.00% to 1.00% per annum for the Base Rate. The Base Rate is the highest of (i) the Administrative Agent's prime rate (ii) the Federal Funds open rate plus 0.50% or (iii) the Daily LIBOR Rate plus 1.00%. We are also required to pay a commitment fee of 0.150% per annum to 0.275% per annum, based on our leverage ratio, on the average unused portion of the total lender commitments then in effect. We incurred financing costs of $1,000, which are being amortized over five years. Our effective interest rate for borrowings on the credit facility was 1.40% during the year ended April 26, 2013.

Under the terms of the credit agreement, at our option we may increase the aggregate amount of borrowings up to $150,000 under the revolving credit facility with the consent of the lenders participating in such increase, subject to certain customary conditions and lenders commitment to provide the increase in funding (“Accordion”).

On April 26, 2013, we exercised the Accordion in full to increase the aggregate commitments under our credit facility by $150,000. As a result, our borrowing capacity increased from $300,000 to $450,000. All other terms of the credit agreement remained unchanged.

As of April 26, 2013, we had $201,433 outstanding on the credit facility. The funds were borrowed for general corporate purposes including: to prepay our private placement debt, fund our Farm Fresh Refresh remodeling initiative and make other capital investments, repurchase shares, pay the cash consideration for the Kettle Creations acquisition and pay dividends. Our interest expense on variable rate debt may increase in future periods as the credit facility funding source is utilized. A 1 percent increase in the benchmark rate used for our credit facility would increase our annual interest expense by approximately $2,042 assuming the $201,433 outstanding at the end of fiscal 2013 was outstanding for the entire year.

On November 30, 2012, we provided the agents for the Note Purchase Agreement, dated July 28, 2004, as amended (“2004 Notes”), and the Note Purchase Agreement, dated July 28, 2008, as amended (“2008 Notes”), with a prepayment notice. The interest rates under the 2004 Notes was Series 5.12% and 5.67%, and under the 2008 Notes was 6.39% and 6.39%. Per the terms of the 2004 Notes and the 2008 Notes (collectively, “Private Placement Notes”), notice of prepayment was required at least 30 days, but not more than 60 days, prior to payment. On December 31, 2012, we prepaid the Private Placement Notes in full, consisting of $97,145 in current aggregate principal amount, plus a make-whole amount of $6,150 determined in accordance with the provisions of the Private Placement Notes. Absent their early termination and prepayment, the maturity date of the 2004 Notes and the 2008 Notes would have been July 28, 2016, and July 28, 2014, respectively. We used cash on hand and borrowings from the credit facility to prepay the Private Placement Notes.

On August 28, 2012, we obtained an interest-free loan of $1,000, due ten years from the date of borrowing, with no prepayment penalty. We have imputed interest based on our current borrowing rate. The loan was provided to assist with the construction costs of the new corporate headquarters building.

As of April 26, 2013, we were in compliance with our debt covenants and restrictions.

Interest costs of $835, $644 and $394 incurred in fiscal 2013, fiscal 2012 and fiscal 2011, respectively, were capitalized in connection with our construction activities. Interest paid in fiscal 2013, fiscal 2012 and fiscal 2011 was $12,442, $8,558 and $9,264, respectively.