Quarterly report pursuant to Section 13 or 15(d)

Debt

v2.4.0.8
Debt
 6 Months Ended
Jun. 28, 2014
Debt Disclosure [Abstract]  
Debt
Note 17 – Debt

Short-term debt at June 28, 2014, December 31, 2013 and June 29, 2013, consisted of the following:
(in millions)
June 28,
2014
 
December 31,
2013
 
June 29,
2013
Current maturities of long-term debt
$
5.0

 
$
6.4

 
$
5.2

Other short-term debt
—

 
—

 
0.8

Total short-term debt
$
5.0

 
$
6.4

 
$
6.0


Long-term debt at June 28, 2014, December 31, 2013 and June 29, 2013, consisted of the following:
(in millions)
June 28,
2014
 
December 31,
2013
 
June 29,
2013
Notes, 7.125% due 2027, net of discount of $0.5, $0.5 and $0.6
$
162.7

 
$
162.7

 
$
165.0

Senior notes, 4.625% due 2021(A)
148.7

 
150.0

 
150.0

Debentures, 7.375% due 2023, net of discount of $0.2, $0.2 and $0.3(A)
103.2

 
103.7

 
108.4

Loan with Fond du Lac County Economic Development Corporation, 2.0% due 2021, net of discount of $5.6, $5.9 and $6.3
36.1

 
36.8

 
40.4

Notes, various up to 5.892% payable through 2022
7.3

 
6.6

 
7.8

Total long-term debt
458.0

 
459.8


471.6

Current maturities of long-term debt
(5.0
)
 
(6.4
)
 
(5.2
)
Long-term debt, net of current maturities
$
453.0

 
$
453.4


$
466.4



(A) Included in Senior notes, 4.625% due 2021 and Debentures, 7.375% due 2023 at June 28, 2014, is the estimated aggregate fair value related to the fixed-to-floating interest rate swaps as discussed in Note 5 – Financial Instruments.

In May 2013, the Company completed an offering of $150.0 million aggregate principal amount of 4.625 percent Senior notes due 2021 under a private offering to qualified institutional buyers in accordance with Rule 144A, and to persons outside the U.S. pursuant to Regulation S, under the Securities Act of 1933, as amended. Interest on the notes is payable semi-annually on May 15 and November 15 of each year and started on November 15, 2013. The Company has the option to redeem some or all of the notes prior to maturity. The proceeds from this offering and cash on hand after liquidation of the Company's marketable securities were used to repurchase $249.8 million of the Company's outstanding 11.250 percent Senior Secured Notes due 2016. In connection with this repurchase, the Company recorded a Loss on early extinguishment of debt in the Condensed Consolidated Statements of Comprehensive Income of $32.3 million during the second quarter 2013.

The Company did not repurchase debt during the three months or six months ended June 28, 2014. The Company's debt-repurchase activity for the three months and six months ended June 29, 2013, respectively, was as follows:
 
Three Months Ended
 
Six Months Ended
(in millions)
June 29,
2013
 
June 29,
2013
Senior notes, 11.25%, due 2016
$
249.8

 
$
249.8

Notes, 7.125%, due 2027
—

 
1.0

Total debt repurchases
$
249.8

 
$
250.8

Loss on early extinguishment of debt
$
32.3

 
$
32.4



In June 2014, the Company amended and restated the five-year $300.0 million secured, asset-based borrowing facility it entered into during March 2011 and converted it into a five-year $300 million secured facility (Facility) which is in effect through 2019. As of June 28, 2014, available borrowing capacity totaled $293.8 million, net of $6.2 million of letters of credit outstanding under the Facility.  The Company has the ability to issue up to $100.0 million in letters of credit under the Facility.  The Company had no borrowings under the Facility during the six months ended June 28, 2014.  The Company will initially pay a facility fee of 25.0 basis points per annum, until August 2014, when the fee will be adjusted based on the Company's leverage ratio and will be within a range of 20.0 to 35.0 basis points per annum.  Once the Company achieves the Investment Grade Release Conditions, the facility fee per annum will be within a range of 12.5 to 35.0 basis points based on the Company's credit rating.  The Investment Grade Release Conditions are defined as the date upon which the Company receives an investment grade credit rating by either Standard & Poor's or Moody's and meets the leverage ratio requirements of less than or equal to 2.25:1.00 for the prior two fiscal quarters. Under the terms of the Facility, the Company has two borrowing options, including borrowing at a rate tied to adjusted LIBOR plus a spread of 150.0 basis points or a base rate plus a margin of 50.0 basis points. After the first six months, the rates will be determined by a leverage ratio, with a range of 130.0 to 190.0 basis points for LIBOR rate borrowings and a range of 30.0 to 90.0 basis points for base rate borrowings, until the occurrence of the Investment Grade Release Conditions, on and after which the rate will be determined by the Company’s credit ratings, with a range of 100.0 to 190.0 basis points for LIBOR rate borrowings and a range of 0.0 to 90.0 basis points for base rate borrowings.

The Company is required to maintain compliance with two financial covenants included in the Facility - a minimum interest coverage ratio and a maximum leverage ratio.  The minimum interest coverage ratio, as defined in the agreement, is not permitted to be less than 3.50 to 1.00. The maximum leverage ratio, as defined in the agreement, is not permitted to be more than 3.00 to 1.00, unless the Company completes an acquisition of more than $100.0 million, which increases the maximum leverage ratio to 3.25 to 1.00 for the twelve months following the acquisition. As of June 28, 2014, the Company was in compliance with these two financial covenants in the Facility.