SHORT-TERM BORROWINGS AND LONG-TERM DEBT



Debt Obligations	Interest Rate Range as of February 22, 2019	Fiscal Year Maturity Range	February 22, 2019		February 23, 2018
U.S. dollar obligations:
Senior notes (1)	5.125%	2029	$	442.6	$	—
Senior notes (2)		2021	—		249.1
Revolving credit facilities (3)(5)		2022	—		—
Notes payable (4)	3.7%	2024	42.7		45.4
			485.3		294.5
Foreign currency obligations:
Revolving credit facilities (5)			—		—
Notes payable	6.0% - 9.0%		0.3		0.3
Bank overdraft	0.65%		1.4		—
Capitalized lease obligations	1.4%	2020	—		0.2
Total short-term borrowings and long-term debt			487.0		295.0
Short-term borrowings and current portion of long-term debt (6)			4.1		2.8
Long-term debt			$	482.9	$	292.2

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(1)

In Q4 2019, we issued $450 of unsecured unsubordinated senior notes, due in January 2029 (“2029 Notes”). The 2029 Notes were issued at 99.213% of par value. The bond discount of $3.5 and direct debt issuance costs of $4.0 were deferred and are being amortized over the life of the 2029 Notes. Although the coupon rate of the 2029 Notes is 5.125%, the effective interest rate is 5.6% after taking into account the impact of the direct debt issuance costs, a deferred loss on an interest rate lock related to the debt issuance and the bond discount. The 2029 Notes rank equally with all of our other unsecured unsubordinated indebtedness, and they contain no financial covenants. We may redeem some or all of the 2029 Notes at any time. The redemption price would equal the greater of (1) the principal amount of the notes being redeemed; or (2) the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the comparable U.S. Treasury rate plus 40 basis points; plus, in both cases, accrued and unpaid interest. If the notes are redeemed within 3 months of maturity, the redemption price would be equal to the principal amount of the notes being redeemed plus accrued and unpaid interest. During 2019, amortization expense related to the discount and debt issuance costs on the 2029 Notes was not material.

(2)

In Q4 2019, we redeemed the $250 outstanding aggregate principal amount of our 6.375% unsecured unsubordinated senior notes due in February 2021 (“2021 Notes”). The redemption price was equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2021 Notes, discounted to the redemption date at a rate of 3.0%, together with accrued and unpaid interest through the redemption date. The Company incurred aggregate charges of $16.9 related to the early retirement of the debt and write-off of the remaining issuance costs and discount associated with the 2021 Notes.


(3)	We have a $200 global committed bank facility, which has an interest rate of LIBOR plus an applicable margin and expires in 2022. As of February 22, 2019 and February 23, 2018, there were no borrowings outstanding under the facility, our availability to borrow under the facility was not limited, and we were in compliance with all covenants under the facility.

In addition, we have revolving credit agreements of $48.5 which can be utilized to support bank guarantees, letters of credit, overdrafts and foreign exchange contracts. As of February 22, 2019, we had $13.4 in outstanding bank guarantees and standby letters of credit against these agreements. We had no draws against our standby letters of credit during 2019 and 2018, respectively.

(4)

We have a $42.7 note payable with an original amount of $50.0 at a floating interest rate based on 30-day LIBOR plus 1.20%. The loan has a term of seven years and requires fixed monthly principal payments of $0.2 on a 20-year amortization schedule with a $32 balloon payment due in 2024. The loan is secured by two corporate aircraft, contains no financial covenants and is not cross-defaulted to our other debt facilities.

(5)

We have unsecured uncommitted short-term credit facilities of up to $5.6 of U.S. dollar obligations and up to $23.7 of foreign currency obligations with various financial institutions available for working capital purposes as of February 22, 2019. Interest rates are variable and determined at the time of borrowing. These credit facilities have no stated expiration date but may be changed or canceled by the banks at any time. There were no borrowings on these facilities as of February 22, 2019 and February 23, 2018.


(6)	The weighted-average interest rate for short-term borrowings and the current portion of long-term debt was 2.1% as of February 22, 2019 and 2.8% as of February 23, 2018.

The annual maturities of short-term borrowings and long-term debt for each of the following five years are as follows:



Fiscal Year Ending in February	Amount
2020	$	4.1
2021	2.6
2022	2.6
2023	2.6
2024	32.2
Thereafter	442.9
	$	487.0

Global Credit Facility

Our $200 committed unsecured revolving syndicated credit facility expires in 2022. At our option, and subject to certain conditions, we may increase the aggregate commitment under the facility by up to $75 by obtaining at least one commitment from one or more lenders. There are currently no borrowings outstanding under the facility.

We can use borrowings under the facility for general corporate purposes, including friendly acquisitions. Interest on borrowings is based on the rate, as selected by us, between the following two options:


•	the Eurocurrency rate plus the applicable margin as set forth in the credit agreement, for interest periods of one, two, three or six months; or


•	for floating rate loans (as defined in the credit agreement), the greater of the prime rate, the Federal funds effective rate plus 0.5%, and the Eurocurrency rate for a one month interest period plus 1%, plus the applicable margin as set forth in the credit agreement.

Up to $25 of the aggregate commitment can be borrowed under a swing line provision, at an agreed upon rate between us and the swing line lender.

The facility requires us to satisfy two financial covenants:

•

A maximum leverage ratio covenant, which is measured by the ratio of (x) indebtedness, minus the amount, if any, of unrestricted cash in excess of $25, to (y) trailing four quarter adjusted EBITDA and is required to be less than 3:1. In the context of certain permitted acquisitions, we have a one-time ability, subject to certain conditions, to increase the maximum ratio to 3.25:1 for four consecutive quarters.


•	A minimum interest coverage ratio covenant, which is measured by the ratio of (y) trailing four quarter adjusted EBITDA to (z) trailing four quarter interest expense and is required to be no less than 3.5:1.

The facility does not include any restrictions on cash dividend payments or share repurchases. As of February 22, 2019 and February 23, 2018, we were in compliance with all covenants under the facility.