Debt and Finance Lease Obligations

6 Months Ended

Jun. 28, 2019

Long-term Debt and Lease Obligation [Abstract]

The following is a summary of long-term debt and finance lease obligations (U.S. dollars in millions):



	June 28, 2019			December 28, 2018
Senior unsecured revolving credit facility⁽¹⁾ (see Credit Facility below)	$	639.6		$	661.3
Finance lease obligations	0.8			1.1
Total debt and finance lease obligations	640.4			662.4
Less: Current maturities ⁽¹⁾	(640.0		)	(0.5		)
Long-term debt and finance lease obligations	$	0.4		$	661.9

⁽¹⁾The Senior unsecured revolving credit facility matures April 15, 2020 and is classified as current.

Credit Facility

On April 16, 2015, we entered into a five-year $800 million syndicated senior unsecured revolving credit facility maturing on April 15, 2020 (the "Credit Facility") with Bank of America, N.A. as administrative agent and Merrill Lynch, Pierce, Fenner & Smith Inc. as sole lead arranger and sole book manager. Borrowings under the Credit Facility bear interest at a spread over LIBOR that varies with our leverage ratio. The Credit Facility also includes a swing line facility and a letter of credit facility.

On September 27, 2018, we amended certain covenant ratios of our Credit Facility. On February 27, 2018, we exercised an option to increase the total commitments under the Credit Facility from $800 million to $1.1 billion. Debt issuance costs of $0.3 million are included in other noncurrent assets on our Consolidated Balance Sheets as of the six months ended June 28, 2019.

We have a renewable 364-day, $25.0 million commercial stand-by letter of credit facility with Rabobank Nederland.

The following is a summary of the material terms of the Credit Facility and other working capital facilities at June 28, 2019 (U.S. dollars in millions):



	Term	Maturity date	Interest rate	Borrowing limit		Available borrowings
Bank of America credit facility	5 years	April 15, 2020	3.95%	$	1,100.0	$	460.4
Rabobank letter of credit facility	364 days	June 18, 2019	Varies	25.0		16.6
Other working capital facilities	Varies	Varies	Varies	23.3		13.9
				$	1,148.3	$	490.9

The current margin for LIBOR advances is 1.50%. We intend to use funds borrowed under the Credit Facility from time to time for general corporate purposes, which may include the repayment, redemption or refinancing of our existing indebtedness, working capital needs, capital expenditures, funding of possible acquisitions, possible share repurchases and satisfaction of other obligations.

10. Debt and Finance Lease Obligations (continued)

The Credit Facility requires us to comply with financial and other covenants, including limitations on capital expenditures, the amount of dividends that can be paid in the future, the amount and types of liens and indebtedness, material asset sales and mergers. As of June 28, 2019, we were in compliance with all of the covenants contained in the Credit Facility. The Credit Facility is unsecured and is guaranteed by certain of our subsidiaries. The Credit Facility permits borrowings under the revolving commitment with an interest rate determined based on our leverage ratio and spread over LIBOR. In addition, we pay a fee on unused commitments.

Our Credit Facility matures on April 15, 2020 and represents our principal method of supplementing operating cash flows for our working capital and other liquidity requirements. We plan to refinance our Credit Facility before maturity, based on our history of earnings and positive cash flows along with our long-standing relationships with our current bank group and our credit rating. We believe that our operating cash flows, together with our ability to renew the Credit Facility will be adequate to meet our operating, investing and financing needs in the foreseeable future. There are no assurances that volatility and uncertainty in the global capital markets will not impair our ability to access these markets in terms that are favorable to us.

As of June 28, 2019, we applied $8.4 million to the Rabobank Nederland and Bank of America letter of credit facilities in respect of certain contingent obligations and other governmental agency guarantees combined with guarantees for purchases of raw materials and equipment and other trade related letters of credit. We also had $17.5 million in other letters of credit and bank guarantees not included in the Rabobank or Bank of America letter of credit facilities.

As of June 28, 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to our variable rate LIBOR-based borrowings from our Credit Facility. Refer to Note 15, “Derivative Financial Instruments”.