Quarterly report pursuant to Section 13 or 15(d)

Debt

v2.4.0.8
Debt
 9 Months Ended
Sep. 28, 2013
Debt Disclosure [Abstract]  
Debt
Note 16 – Debt

Short-term debt at September 28, 2013 and December 31, 2012, consisted of the following:
(in millions)
September 28,
2013
 
December 31,
2012
Current maturities of long-term debt
$
4.6

 
$
6.5

Other short-term debt
—

 
1.7

Total short-term debt
$
4.6

 
$
8.2



In March 2011, the Company entered into a five-year $300.0 million secured, asset-based borrowing facility (Facility).  Borrowings under this Facility are limited to the lesser of $300.0 million or the value of the borrowing base, consisting of certain accounts receivable and inventory of the Company’s domestic subsidiaries.  As of September 28, 2013, the borrowing base totaled $313.5 million, and available borrowing capacity totaled $279.0 million, net of $21.0 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 September 28, 2013.  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 September 28, 2013.  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 September 28, 2013.  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 September 28, 2013): 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 third quarter of 2013, 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.

Long-term debt at September 28, 2013 and December 31, 2012, consisted of the following:
(in millions)
September 28,
2013
 
December 31,
2012
Senior notes, 11.25% due 2016, net of discount of $4.1 in 2012
$
—

 
$
245.7

Notes, 7.125% due 2027, net of discount of $0.5 and $0.6
163.1

 
166.0

Senior notes, 4.625% due 2021
150.0

 
—

Debentures, 7.375% due 2023, net of discount of $0.3 and $0.3
103.9

 
108.4

Loan with Fond du Lac County Economic Development Corporation, 2.0% due 2021, net of discount of $6.1 and $6.6
40.0

 
41.1

Notes, various up to 5.892% payable through 2022
7.5

 
8.9

Total long-term debt
464.5

 
570.1

Current maturities of long-term debt
(4.6
)
 
(6.5
)
Long-term debt, net of current maturities
$
459.9

 
$
563.6



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, starting 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, including the proceeds from the 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 Consolidated Statements of Comprehensive Income of $32.3 million during the second quarter 2013.

The Company's debt-repurchase activity for the three months and nine months ended September 28, 2013 and September 29, 2012, respectively, was as follows:
 
Three Months Ended
 
Nine Months Ended
(in millions)
September 28,
2013
 
September 29, 2012
 
September 28, 2013
 
September 29, 2012
Senior notes, 11.25%, due 2016
$
—

 
$
—

 
$
249.8

 
$
19.0

Debentures, 7.375%, due 2023
4.5

 
6.0

 
4.5

 
6.0

Notes, 7.125%, due 2027
2.0

 
—

 
3.0

 
1.2

Senior notes, 11.25%, due 2013
—

 
71.5

 
—

 
73.0

Total debt repurchases
$
6.5

 
$
77.5

 
$
257.3

 
$
99.2

Loss on early extinguishment of debt
$
0.3

 
$
7.5

 
$
32.7

 
$
11.9