Annual report pursuant to Section 13 and 15(d)

Financing Agreements

Financing Agreements
12 Months Ended
Sep. 30, 2011
Financing Agreements  
Financing Agreements



5.              Financing Agreements


Borrowings under financing agreements included:




September 30,








$400 revolving credit facility








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






Total long-term debt









In March 2008, we entered into a $400 five-year senior revolving credit facility (the “Facility”) with a syndicate of banks (the “Banks”).  The term of the Facility expires in March 2013.  Borrowings under the Facility bear interest at variable rates, based upon the Banks’ base rate or LIBOR plus a margin amount based upon our public debt rating.  For fiscal years ended September 30, 2011 and 2010, the weighted-average interest rates were 0.7% and 0.8%.  The availability of borrowings under the Facility is subject to our ability at the time of borrowing to meet certain specified conditions.  These conditions include compliance with covenants, absence of default, and continued accuracy of certain representations and warranties.  Financial covenants include a maximum ratio of Consolidated Indebtedness to Consolidated EBITDA of 3.5 to 1.0 and a minimum ratio of Consolidated EBITDA to interest expense of 3.5 to 1.0.  We classified the Facility as long term based upon the contractual terms of the agreement.


As of September 30, 2011, we had $7.1 outstanding letters of credit under the Facility and were in compliance with all covenants.  We had $109.9 of remaining borrowing capacity available under the Facility.  Under the Distribution Agreement with Hill-Rom, the ability to borrow against the Facility for certain strategic transactions, such as acquisitions, may be limited.  See Note 6 for more information.


Our Swiss location maintains additional availability of $19.7 through local credit facilities secured by cash or real property.  As of September 30, 2011 and 2010, there were no borrowings under these facilities and availability was reduced by $5.3 and $3.1 for outstanding bank guarantees.  At September 30, 2011 and 2010, we had additional outstanding letters of credit and bank guarantees with other financial institutions totaling $9.7 and $2.9.  We had restricted cash of $0.3 at September 30, 2010.


On July 9, 2010, we issued $150 of senior unsecured notes (Notes) due July 2020.  The Notes bear interest at a fixed rate of 5.5% per year, payable semi-annually in arrears beginning January 15, 2011.  The Notes were issued at a discount of $1.6, resulting in an initial carrying value of $148.4.  We are amortizing the discount 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 associated with the Notes of $2.1 are being amortized to interest expense on a straight-line basis over the term of the Notes.  The Notes are unsubordinated obligations of Hillenbrand, Inc. and rank equally in right of payment with all of our other existing and future unsubordinated obligations.


The indenture governing the Notes does not limit our ability to incur additional indebtedness.  It does contain certain covenants that restrict our ability to incur secured debt and to engage in certain sale and leaseback transactions.  The indenture provides holders of debt securities with remedies if we fail to perform specific obligations.  In the event of a “Change of Control Triggering Event,” each holder of the Notes has the right to require us to purchase all or a portion of their Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest.  The Notes are redeemable with prior notice to Note holders.