Quarterly report pursuant to Section 13 or 15(d)

Financing Agreements

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Financing Agreements
6 Months Ended
Mar. 31, 2013
Financing Agreements  
Financing Agreements

5.              Financing Agreements

 

 

 

March 31,

 

September 30,

 

 

 

2013

 

2012

 

$700 revolving credit facility (excludes outstanding letters of credit)

 

$

375.9

 

$

123.0

 

$200 term loan

 

195.0

 

 

$150 senior unsecured notes, due July 15, 2020, net of discount

 

148.7

 

148.6

 

Total debt

 

719.6

 

271.6

 

Less: current portion of term loan

 

10.0

 

 

Total long-term debt

 

$

709.6

 

$

271.6

 

 

In November 2012, we fully exercised the $300 accordion feature under our revolving credit facility to increase our financing capacity.  This increase consisted of a $200 term loan and a $100 increase in our borrowing capacity under our revolving credit facility, to $700.  The Company also has the potential, under certain circumstances and with the lenders’ approval, to increase the total borrowing capacity under the revolving credit facility by an additional $300.  Deferred financing costs of $3.8 are being amortized to interest expense over the term of the revolving credit facility.

 

As of March 31, 2013, we (i) had $151.6 in outstanding letters of credit issued under our $700 revolving credit facility, (ii) were in compliance with all covenants set forth in the credit agreement for the revolving credit facility, and (iii) had $172.5 of remaining borrowing capacity available under the revolving credit facility.  The weighted-average interest rates on borrowings under the revolving credit facility were 1.39% and 1.38% for the three- and six-month periods ended March 31, 2013, and 0.71% for the three- and six-month periods ended March 31, 2012.  The weighted average interest rates on the term loan were 1.71% and 1.74% for the three- and six-month periods ended March 31, 2013.  In the normal course of business, the Process Equipment Group is required to provide customers bank guarantees in support of performance, warranty, advance payment, and other contract obligations.  This form of trade finance is customary in the industry and, as a result, we are required to maintain adequate capacity to provide the guarantee.

 

As of March 31, 2013, our Swiss subsidiary maintained additional availability of $15.3 through local credit facilities secured by cash or real property.  There were no borrowings under these facilities as of March 31, 2013, and availability was reduced by $3.6 for outstanding bank guarantees.  Coperion has a $64.1 guaranty facility under which availability was reduced for outstanding bank guarantees totaling $46.8 as of March 31, 2013.  We had $17.3 additional outstanding letters of credit and bank guarantees with other financial institutions and restricted cash of $1.3 at March 31, 2013.

 

On July 9, 2010, we issued $150 fixed-rate senior unsecured notes due July 15, 2020 (the “Notes”).  The Notes bear interest at a fixed rate of 5.5%, payable semi-annually in arrears.  The Notes were issued at an original issue discount of $1.6, which is being amortized to interest expense over the term of the Notes using the effective interest rate method, resulting in an annual interest rate of 5.65%.  Deferred financing costs of $2.1 are being amortized to interest expense over the term of the Notes.