Quarterly report pursuant to Section 13 or 15(d)

Financing Agreements

v3.10.0.1
Financing Agreements
3 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Financing Agreements
Financing Agreements
 
December 31,
2018
 
September 30,
2018
$900 revolving credit facility (excluding outstanding letters of credit)
$
115.8

 
$
95.7

$150 senior unsecured notes, net of discount (1)
149.4

 
149.3

$100 Series A Notes (2)
99.6

 
99.6

Total debt
364.8

 
344.6

Less: current portion

 

Total long-term debt
$
364.8

 
$
344.6

 
 
 
 
(1) Includes debt issuance costs of $0.3 and $0.4 at December 31, 2018 and September 30, 2018.
(2) Includes debt issuance costs of $0.4 and $0.4 at December 31, 2018 and September 30, 2018.


With respect to the revolving credit facility, as of December 31, 2018, we had $7.2 in outstanding letters of credit issued and $777.0 of maximum borrowing capacity. $757.0 of this borrowing capacity was immediately available based on our leverage covenant at December 31, 2018, with additional amounts available in the event of a qualifying acquisition. The weighted-average interest rates on borrowings under the Facility were 2.37% for the three months ended December 31, 2018, and 1.44% for the same period in the prior year. The weighted average facility fee was 0.11% for the three months ended December 31, 2018, and 0.21% for the same period in the prior year. We have employed derivative instruments to hedge the interest rate associated with $150.0 of ten-year, fixed-rate financing we expect to issue in the future. These derivative instruments terminate in December 2020, if not settled earlier in connection with the underlying future financing.
 
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 contractual obligations. This form of trade finance is customary in the industry and, as a result, we maintain adequate capacity to provide the guarantees. As of December 31, 2018, we had credit arrangements totaling $293.8, under which $226.4 was utilized, for this purpose. These arrangements include our €150.0 Syndicated Letter of Guarantee Facility (as amended, the “LG Facility”) and other ancillary credit facilities.

The Facility, the LG Facility, and the Private Shelf Agreement, dated as of December 6, 2012, among the Company, Prudential Investment Management, Inc. and each Prudential Affiliate (as amended, the “Shelf Agreement”) (as defined therein), require us to meet certain conditions including compliance with covenants, absence of default, and continued accuracy of certain representations and warranties. Financial covenants include a maximum ratio of Indebtedness to EBITDA (as defined in the agreements, “Leverage Ratio”) of 3.5 to 1.0 including the application of cash as a reduction of Indebtedness (subject to certain limitations); a maximum Leverage Ratio resulting from an acquisition in excess of $75.0 of 4.0 to 1.0 for a period of three consecutive quarters following such acquisition; and a minimum ratio of EBITDA (as defined in the agreements) to interest expense of 3.0 to 1.0. As of December 31, 2018, we were in compliance with all covenants.

The Facility, senior unsecured notes, 4.60% Series A unsecured notes issued under the Shelf Agreement (“Series A Notes”), and LG Facility are fully and unconditionally, and jointly and severally, guaranteed by certain of the Company’s domestic subsidiaries.