Note 6 – Long-Term Debt

Long-term debt consists of the following:

	December 31, 2012		December 31, 2011

Credit facility	$	89,000	$	155,000
Exchangeable unsecured notes, due 2102		95,042		95,042
Convertible senior debentures, due 2040		100,166		98,463
Convertible senior debentures, due 2041		51,399		50,549
Convertible senior debentures, due 2042		57,324		-
		392,931		399,054
Less current portion		-		-
	$	392,931	$	399,054

Credit Facility

The Company maintains a credit facility with a consortium of banks led by JPMorgan as administrative agent (the "Credit Facility"). The Credit Facility became effective on December 1, 2010 and provides a revolving commitment through December 1, 2015. On April 3, 2012, the Company amended the Credit Facility and entered into an incremental facility agreement that increases the total revolving commitment from $450,000 to $528,000. Following the expansion, Vishay has the ability to request up to an additional $22,000 of incremental commitments, subject to the satisfaction of certain conditions.

Borrowings under the Credit Facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on the Company's leverage ratio. For the year ended December 31, 2011 and through the second fiscal quarter of 2012, borrowings bore interest at LIBOR plus 1.65%. Since the beginning of the third fiscal quarter of 2012 and based on the Company's current leverage ratio, borrowings bear interest at LIBOR plus 1.95%. The interest rate on the Company's borrowings will increase if the Company's leverage ratio equals or exceeds 2.00 to 1 and will decrease if the Company's leverage ratio decreases below 1.50 to 1. Vishay is also required to pay facility commitment fees of 0.35% per annum on the entire commitment amount. Such facility commitment fees will increase if the Company's leverage ratio equals or exceeds 2.50 to 1.

The borrowings under the Credit Facility are secured by a lien on substantially all assets located in the United States, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed for use in, or arising under the laws of, any country other than the United States, and bank and securities accounts) of Vishay and certain significant domestic subsidiaries, and pledges of stock in certain significant domestic and foreign subsidiaries and are guaranteed by certain significant subsidiaries. Certain of the Company's subsidiaries are permitted to borrow under the Credit Facility, subject to the satisfaction of specified conditions. Any borrowings by these subsidiaries under the credit facility will be guaranteed by Vishay.

The Credit Facility includes limits or restrictions on, among other things, incurring indebtedness, incurring liens on its assets, making investments and acquisitions, making asset sales, repurchasing common stock, and paying cash dividends and making other restricted payments. The credit facility also requires the Company to comply with other covenants, including the maintenance of specific financial ratios.

On September 8, 2011, Vishay entered into an amendment to the Credit Facility that permits the Company to repurchase shares of its common stock up to a permitted capacity, conditioned upon Vishay maintaining (i) a pro forma leverage ratio of 2.75 to 1.00, (ii) a pro forma interest expense coverage ratio of 2.00 to 1.00, and (iii) $400,000 of available liquidity, as defined in the amendment. Beginning in 2012, the permitted capacity to repurchase shares of the Company's outstanding common stock under the Credit Facility began to increase each quarter by an amount equal to 20% of net income. At December 31, 2012, the Credit Facility allows the Company to repurchase up to $174,548 of its common stock. The amount and timing of any future stock repurchases remains subject to authorization of the Company's Board of Directors.

Note 6 – Long-Term Debt (continued)

The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings, the insolvency of Vishay or certain of its significant subsidiaries, and the rendering of a judgment in excess of $25,000 against Vishay or certain of its significant subsidiaries. Upon the occurrence of an event of default under the Credit Facility, Vishay's obligations under the credit facility may be accelerated and the lending commitments under the credit facility terminated.

At December 31, 2012 and 2011, there was $431,295 and $286,995, respectively, available under the Credit Facility. Letters of credit totaling $7,705 and $8,005 were outstanding at December 31, 2012 and 2011, respectively.

Convertible Senior Debentures

Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. The following table summarizes some key facts and terms regarding the three series of outstanding convertible senior debentures:

	Due 2040			Due 2041			Due 2042
Issuance date	November 9, 2010			May 13, 2011			May 31, 2012
Maturity date	November 15, 2040			May 15, 2041			June 1, 2042
Principal amount	$	275,000		$	150,000		$	150,000
Cash coupon rate (per annum)		2.25	%		2.25	%		2.25	%
Nonconvertible debt borrowing rate at issuance (per annum)		8.00	%		8.375	%		7.50	%
Initial conversion rate (per $1 principal amount)		72.0331			52.5659			84.6937
Effective conversion price (per share)	$	13.88		$	19.02		$	11.81
130% of the conversion price (per share)	$	18.04		$	24.73		$	15.35
Call date	November 20, 2020			May 20, 2021			June 7, 2022

GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects the issuer's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The resulting discount on the debt is amortized as non-cash interest expense in future periods.

The carrying values of the liability and equity components of the convertible debentures are reflected in the Company's consolidated balance sheets as follows:

	Principal amount of the debentures		Unamortized discount			Embedded derivative		Carrying value of liability component		Equity component - net carrying value
December 31, 2012
Due 2040	$	275,000		(175,456	)		622	$	100,166	$	110,094
Due 2041	$	150,000		(99,000	)		399	$	51,399	$	62,246
Due 2042	$	150,000		(92,958	)		282	$	57,324	$	57,874
Total	$	575,000	$	(367,414	)	$	1,303	$	208,889	$	230,214

December 31, 2011
Due 2040	$	275,000		(177,131	)		594	$	98,463	$	110,094
Due 2041	$	150,000		(99,843	)		392	$	50,549	$	62,246
Total	$	425,000	$	(276,974	)	$	986	$	149,012	$	172,340

Note 6 – Long-Term Debt (continued)

Interest is payable on the debentures semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances beginning ten years subsequent to issuance.

Interest expense related to the debentures is reflected on the consolidated statements of operations for the years ended December 31:

	Contractual coupon interest		Non-cash amortization of debt discount		Non-cash amortization of deferred financing costs		Non-cash change in value of derivative liability			Total interest expense related to the debentures
2012
Due 2040	$	6,188		1,675		88		28		$	7,979
Due 2041	$	3,375		843		45		7		$	4,270
Due 2042	$	1,978		510		32		46		$	2,566
Total	$	11,541	$	3,028	$	165	$	81		$	14,815

2011
Due 2040	$	6,188		1,548		88		275		$	8,099
Due 2041	$	2,128		498		29		181		$	2,836
Total	$	8,316	$	2,046	$	117	$	456		$	10,935

2010
Due 2040	$	773		188		11		(55	)	$	917

Prior to three months before the maturity date, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter after the first full quarter subsequent to issuance, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. None of these conditions had occurred as of December 31, 2012.

The debentures are convertible, subject to certain conditions, into cash, shares of Vishay's common stock or a combination thereof, at Vishay's option, at the conversion rate. At the direction of its Board of Directors, Vishay intends, upon conversion, to repay the principal amount of the debentures in cash and settle any additional amounts in shares. Vishay must provide additional shares upon conversion if there is a "fundamental change" in the business as defined in the indenture governing the debentures.

Vishay may not redeem the debentures prior to the respective call dates, except in connection with certain tax-related events. On or after the call date and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay's common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption.

Note 6 – Long-Term Debt (continued)

Exchangeable Unsecured Notes, due 2102

On December 13, 2002, Vishay issued $105,000 in nominal (or principal) amount of its floating rate unsecured exchangeable notes due 2102 in connection with an acquisition. The notes are governed by a note instrument and a put and call agreement dated December 13, 2002. The notes may be put to Vishay in exchange for shares of its common stock and, under certain circumstances, may be called by Vishay for similar consideration.

Under the terms of the put and call agreement, by reason of the spin-off, Vishay was required to take action so that the existing notes are deemed exchanged as of the date of the spin-off, for a combination of new notes of Vishay reflecting a lower principal amount of the notes and new notes issued by VPG.

Based on the relative trading prices of Vishay and VPG common stock on the ten trading days following the spin-off, Vishay retained the liability for an aggregate $95,042 principal amount of exchangeable notes effective July 6, 2010. The assumption of a portion of the liability by VPG was recorded as a reduction in parent net investment just prior to the completion of the spin-off.

The notes are subject to a put and call agreement under which the holders may at any time put the notes to Vishay in exchange for 6,176,471 shares of Vishay's common stock in the aggregate, and Vishay may call the notes in exchange for cash or for shares of its common stock at any time after January 2, 2018. The put/call rate of the Vishay notes is $15.39 per share of common stock.

The notes bear interest at LIBOR. Interest continues to be payable quarterly on March 31, June 30, September 30, and December 31 of each calendar year. The interest rate could be further reduced to 50% of LIBOR if the price of Vishay's common stock is above $40.73 per share for thirty or more consecutive trading days.

Convertible Subordinated Notes, due 2023

In 2003, Vishay sold $500,000 aggregate principal amount of 3-5/8% convertible subordinated notes due 2023. Holders of substantially all (99.6%) of the 3-5/8% notes exercised their option to require Vishay to repurchase their notes on August 1, 2008. The remaining notes, with an aggregate principal amount of $1,870, were redeemed at Vishay's option on August 1, 2010.

Note 6 – Long-Term Debt (continued)

Other Borrowings Information

Aggregate annual maturities of long-term debt, based on the terms stated in the respective agreements, are as follows:

2013	$	-
2014		-
2015		89,000
2016		-
2017		-
Thereafter		670,042

The annual maturities of long-term debt are based on the amount required to settle the obligation. Accordingly, the discounts associated with the convertible debentures due 2040, due 2041, and due 2042 are excluded from the calculation of the annual maturities of long-term debt in the table above.

In 2010, the Company repaid a $13,500 Israeli bank loan and the balance of a $90,000 term loan under a previous credit facility.

At December 31, 2012, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $18,200, which was substantially unused. At December 31, 2011, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $15,500, which was substantially unused.

Interest paid was $16,578, $14,084, and $9,120 for the years ended December 31, 2012, 2011, and 2010, respectively.

See Note 18 for further discussion on the fair value of the Company's long-term debt.