Quarterly report pursuant to Section 13 or 15(d)

Financing Agreements

v2.4.0.8
Financing Agreements
9 Months Ended
Jun. 30, 2013
Financing Agreements  
Financing Agreements

5.              Financing Agreements

 

 

 

June 30,

 

September 30,

 

 

 

2013

 

2012

 

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

 

$

370.0

 

$

123.0

 

$200 term loan

 

192.5

 

 

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

 

148.8

 

148.6

 

Total debt

 

711.3

 

271.6

 

Less: current portion of term loan

 

10.0

 

 

Total long-term debt

 

$

701.3

 

$

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 June 30, 2013, we (i) had $25.1 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 $304.9 of remaining borrowing capacity available under the revolving credit facility.  The weighted-average interest rates on borrowings under the revolving credit facility were 1.37% for the three- and nine-month periods ended June 30, 2013, and 0.68% and 0.70% for the three- and nine-month periods ended June 30, 2012.  The weighted average interest rates on the term loan were 1.70% and 1.73% for the three- and nine-month periods ended June 30, 2013.

 

In the normal course of business, the Process Equipment Group provides to certain customers bank guarantees and other credit arrangements 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 guarantees. As of June 30, 2013, we had credit arrangements totaling $286.6 under which $192.0 was utilized for this purpose. This includes the 150.0 euro Syndicated Letter of Guarantee Facility entered into on June 3, 2013, under which unsecured letters of credit, bank guarantees, or other surety bonds may be issued.  There were no direct borrowings under these credit arrangements.

 

We had restricted cash of $1.2 at June 30, 2013.

 

On July 9, 2010, we issued $150.0 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.