Metro Inc. is one of Canada€™s leading food retailers and distributors and operates a network of supermarkets, discount stores, and drugstores. Exhibits 10-8A and B include the company€™s statement of financial position and Note 20 to the company€™s 2013 financial statements, which provides details of Metro€™s debt.

Required:
a. Metro Inc. had a $600-million revolving credit facility in place at September 28, 2013. What is a revolving credit facility?
b. The revolving credit facility is described as unsecured. What does this mean?
c. The company also had $600 million in notes outstanding (Series A and Series B notes) at September 28,
2013. When do these notes have to be repaid to the note holders?
d. What is the annual interest expense that Metro Inc. incurs on the $600 million in outstanding notes?
e. Metro Inc. has a number of objectives in relation to its management of capital. One of these corporate objectives is to have a percentage of interest-bearing, non-current debt to total combined interest-bearing, non-current debt and equity (non-current debt/total capital ratio) of less than 50%. Did the company meet this in 2013? Explain why Metro may have this objective.

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CHBIT 10-8A METRO INC.'S 2013 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Consolidated statements of financial position As at September 28, 2013 and September 29, 2012 Accounts receivable (notes 13 and 27) Inventories (note 10) Assets held for sale (note 11) Investment in an associate (note 12) Other financial assets (note 13) Investment properties (note 15) LIABILITIES AND EQUITY 1,206.30 Defined benefit liabilities (note 24) Other liablities (note 21) Accumulated other comprehensive income Equity attributable to equity holders of the parent 5 EXHIBIT 10-8B EXCERPT FROM METRO INC.'S 2013 ANNUAL REPORT 20. DEBT 2013 2012 -315.4 200.0 200.0 Revolving Credit Facility, bearing interest at a weighted average rate of 2.47% (2.48% in 2012), repayable on November 3, 2017 or earlier 2015 and redeemable at the issuer's option at fair value at any time prior to maturity October 15, 2035 and redeemable at the issuer's option at fair value at any time prior Series A Notes, bearing interest at a fixed nominal rate of 4.98%, maturing on October 15, Series B Notes, bearing interest at a fixed nominal rate of 5.97%, maturing on to maturity 3.16% (3.06% in 2012) in 2012) 400.0 400.0 Loans, maturing on various dates through 2027, bearing interest at an average rate of Obligations under finance leases, bearing interest at an effective rate of 8.6% (8.6% Deferred financing costs Current portion 28.1 32.6 39.0 43.2 (4.7) (5.2) 662.4 986.0 12.4 12.1 650.0 973.9 The revolving credit facility with a maximum of $600.0 bears interest at rates that fluctuate with changes in bankers' acceptance rates and is unsecured. As at September 28, 2013, the unused authorized revolving credit facility was $600.0 ($284.6 as at September 29, 2012). Given that the Corporation frequently increases and decreases this loan through bankers' acceptances with a minimum of 30 days and to simplity its presen consolidated statement of cash flows solely with net annual changes. Minimum required payments on debt in the upcoming fiscal years will be as follows: tation, the Corporation found that it is preferable for the understanding of its financing activities to present the Obligations Under 2014 2015 2016 2017 2018 2019 and thereafter Loans Notes Finance Leases Total 15.4 7.4 207.1 6.6 5.8 445.6 687.9 6.8 200.0 0.8 0.4 15.5 28.1 6.0 5.8 5.4 30.1 59.8 400.0 600.0 The minimum payments in respect of the obligations under finance leases included interest amounting to S20.8 on these obligations in 2013 ($24.1 in 2012) On October 1, 2013, the maturity of the revolving credit facility was extended to November 3, 2018 and this change is not taken into consideration in the present note tables.