Quarterly report pursuant to Section 13 or 15(d)

Debt

v2.4.0.6
Debt
 3 Months Ended
Mar. 31, 2012
Debt Disclosure [Abstract]  
Debt
Note 15 – Debt

Short-term debt at March 31, 2012 and December 31, 2011 consisted of the following:
(in millions)
March 31,
2012
 
December 31,
2011
Current maturities of long-term debt
$
6.1

 
$
1.5

Other short-term debt
1.2

 
0.9

Total short-term debt
$
7.3

 
$
2.4



In March 2011, the Company entered into a five-year $300.0 million secured, asset-based borrowing facility (Facility).  Borrowings under this Facility are subject to the value of the borrowing base, consisting of certain accounts receivable and inventory of the Company’s domestic subsidiaries.  As of March 31, 2012, the borrowing base totaled $314.0 million and available borrowing capacity totaled $272.4 million, net of $27.6 million of letters of credit outstanding under the Facility.  The Company has the ability to issue up to $125.0 million in letters of credit under the Facility. The Company had no borrowings under the Facility as of March 31, 2012. The Company pays a facility fee of 25.0 to 62.5 basis points per annum, which is adjusted based on a leverage ratio.  The facility fee was 25.0 basis points per annum as of March 31, 2012.  Under the terms of the Facility, the Company has multiple borrowing options, including borrowing at a rate tied to adjusted LIBOR plus a spread of 225 to 300 basis points, which is adjusted based on a leverage ratio.  The borrowing spread was 225 basis points as of March 31, 2012.  The Company may also borrow at the highest of the following, plus a spread of 125 to 200 basis points, which is adjusted based on a leverage ratio (125 basis points as of March 31, 2012): the Federal Funds rate plus 0.50 percent, the Prime Rate established by JPMorgan Chase Bank, N.A., or the one month adjusted LIBOR rate plus 1.00 percent.  

The Company’s borrowing capacity may also be affected by the fixed charge covenant included in the Facility.  The covenant requires that the Company maintain a fixed charge coverage ratio, as defined in the agreement, of greater than 1.0, whenever unused borrowing capacity plus certain cash balances (together representing Availability), falls below $37.5 million.  At the end of the first quarter of 2012, the Company had a fixed charge coverage ratio in excess of 1.0, and therefore had full access to borrowing capacity available under the Facility.  When the fixed charge covenant ratio is below 1.0, the Company is required to maintain at least $37.5 million of Availability in order to be in compliance with the covenant.  Consequently, the borrowing capacity is effectively reduced by $37.5 million whenever the fixed charge covenant ratio falls below 1.0.  Upon entering into the Facility in March 2011, the Company terminated its existing Mercury Receivables ABL Facility and its $400.0 million secured, asset-based facility, which was set to expire in May 2012.  As a result of terminating these agreements, the Company wrote off $1.1 million of deferred debt issuance costs during the first quarter of 2011.
 
Long-term debt at March 31, 2012 and December 31, 2011 consisted of the following:
(in millions)
March 31,
2012
 
December 31,
2011
Senior notes, currently 11.25%, due 2016, net of discount of $5.6 and $5.9
$
288.2

 
$
287.9

Notes, 7.125% due 2027, net of discount of $0.6 and $0.6
167.2

 
167.2

Debentures, 7.375% due 2023, net of discount of $0.3 and $0.3
114.4

 
114.4

Senior notes, currently 11.75%, due 2013
73.0

 
73.0

Loan with Fond du Lac County Economic Development Corporation, 2.0% due 2021, net of discount of $7.1 and $7.3
42.5

 
42.7

Notes, various up to 5.892% payable through 2022
9.5

 
6.7

 
694.8

 
691.9

Current maturities of long-term debt
(6.1
)
 
(1.5
)
Long-term debt
$
688.7

 
$
690.4



The Company did not repurchase debt during the first quarter of 2012. The Company’s debt-repurchase activity for the three months ended April 2, 2011 was as follows:
 
Three Months Ended
(in millions)
April 2,
2011
Senior notes, currently 11.75%, due 2013
$
18.7

Total debt repurchases
$
18.7

Loss on early extinguishment of debt
$
4.3