Debt

9 Months Ended

Jun. 28, 2020

DEBT

Debt consists of the following:


	SBH														SB/RH
	June 28, 2020						September 30, 2019						June 28, 2020				September 30, 2019
(in millions)	Amount		Rate		Amount		Rate		Amount		Rate		Amount		Rate
Spectrum Brands Inc.
Revolver Facility, variable rate, expiring March 6, 2022	$	528.0	2.5	%	$	—	—	%	$	528.0	2.5	%	$	—	—	%
6.625% Notes, due November 15, 2022	—		—	%	117.4		6.6	%	—		—	%	117.4		6.6	%
6.125% Notes, due December 15, 2024	250.0		6.1	%	250.0		6.1	%	250.0		6.1	%	250.0		6.1	%
5.00% Notes, due October 1, 2029	300.0		5.0	%	300.0		5.0	%	300.0		5.0	%	300.0		5.0	%
5.75% Notes, due July 15, 2025	1,000.0		5.8	%	1,000.0		5.8	%	1,000.0		5.8	%	1,000.0		5.8	%
4.00% Notes, due October 1, 2026	476.8		4.0	%	465.0		4.0	%	476.8		4.0	%	465.0		4.0	%
Other notes and obligations	3.6		8.8	%	9.5		10.4	%	3.6		8.8	%	9.5		10.4	%
Obligations under capital leases	161.1		5.6	%	165.6		5.6	%	161.1		5.6	%	165.6		5.6	%
Total Spectrum Brands, Inc. debt	2,719.5				2,307.5				2,719.5				2,307.5
Spectrum Brands Holdings, Inc.
Salus - unaffiliated long-term debt of consolidated VIE	—		—	%	77.0		—	%	—		—	%	—		—	%
Total SBH debt	2,719.5				2,384.5				2,719.5				2,307.5
Unamortized discount on debt	—				(0.2)				—				—
Debt issuance costs	(28.4)				(33.0)				(28.4)				(31.5)
Less current portion	(13.9)				(136.9)				(13.9)				(136.9)
Long-term debt, net of current portion	$	2,677.2			$	2,214.4			$	2,677.2			$	2,139.1

Revolver Facility

The Revolver Facility is subject to either adjusted LIBOR plus margin ranging from 1.75% to 2.25% per annum, or base rate plus margin ranging from 0.75% to 1.25% per annum. During the three month period ended June 28, 2020, the Company increased its overall capacity of the Revolver Facility by $90.0 million, resulting in a total capacity of $890.0 million. All amounts under the additional capacity are subject to either LIBOR plus margin ranging between 2.00% to 2.50% per annum, or base rate plus margin ranging from 1.00% to 1.50%. As a result of borrowings and payments under the Revolver Facility, the Company had borrowing availability of $341.3 million at June 28, 2020, net of outstanding letters of credit of $20.7 million.

Subsequent to the balance sheet date, on June 30, 2020, the Company entered into the Amended and Restated Credit Agreement (the “Credit Agreement”), which refinances the Company’s previously existing credit facility and includes certain modified terms from the previously existing revolving credit facility, including extending the maturity to June 30, 2025, reducing the revolving facility under the Credit Agreement from $890 million to $600 million (with a U.S. dollar tranche and a multicurrency tranche), and changing the interest rate margins applicable to the facility to either adjusted LIBOR plus margin ranging from 1.75% to 2.75% per annum, or base rate plus margin ranging from 0.75% to 1.75% per annum. The Credit Agreement is otherwise provided on the same terms and conditions as the previously existing Revolver Facility. The Company incurred $5.1 million in connection with the Credit Agreement, which will be capitalized as debt issuance costs in the fourth quarter of the year ending September 30, 2020 and amortized over the remaining term of the Credit Agreement.

6.625% Notes

Effective November 15, 2019, SBI completed the tender and call of its 6.625% Senior Unsecured Notes with an outstanding principal of $117.4 million, recognizing a loss on extinguishment of the debt of $2.6 million including a non-cash charge of $1.1 million attributable to the write-off of deferred financing costs associated with the debt.

5.500% Notes

Subsequent to the balance sheet date, on June 30, 2020, SBI issued $300.0 million aggregate principal amount of 5.50% Senior Notes due 2030 (the "5.50% Notes") and entered into the indenture governing the 5.50% Notes (the “2030 Indenture”). The 5.50% Notes mature on July 15, 2030 and are unconditionally guaranteed, on a senior unsecured basis, by SB/RH and by SBI’s existing and future domestic subsidiaries that guarantee indebtedness under the Credit Agreement . The proceeds from the 5.50% Notes were used for repayment of the Revolver Facility obligation.

SBI may redeem all or part of the 5.50% Notes at any time on or after July 15, 2025 at certain fixed redemption prices as set forth in the 2030 Indenture. In addition, prior to July 15, 2025, SBI may redeem the Notes at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, plus accrued and unpaid interest. Before July 15, 2023, the Company may redeem up to 35% of the aggregate principal notes with cash equal to the net proceeds that SBI raises in equity offerings at specified redemption price as set forth in the 2030 Indenture. Further, the 2030 Indenture requires SBI to make an offer to repurchase all outstanding 5.50% Notes upon the occurrence of a change of control of SBI, as defined in the 2030 Indenture.

The 2030 Indenture contains covenants limiting, among other things, the incurrence of additional indebtedness, payments of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates.

In addition, the 2030 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or an acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency.

The Company incurred $4.9 million of fees in connection with the offering of the 5.50% Notes, which will be capitalized as debt issuance costs in the fourth quarter of the year ending September 30, 2020 and amortized over the remaining life of the 5.50% Notes.

Salus

The obligations of the Salus CLO securitization were secured by the assets of the variable interest entity (the "VIE"), which primarily consisted of asset-based loan receivables and carry residual interest subject to maintenance of certain covenants. The obligations of the CLO were non-recourse to the Company. As of September 30, 2019, the CLO’s assets consisted of $0.4 million of cash that was being held to cover wind-down and legal expenses. The CLO has effectively distributed the remaining assets and as of June 3, 2020, the CLO was discharged of its obligation under the indentures as there were no assets that remained with the CLO to service the outstanding debt and no recourse to the Company. Following the discharge of the debt, there are no substantial net assets remaining with the VIE. During the three and nine period ended June 28, 2020, the CLO realized a non-cash gain on extinguishment of debt of $76.2 million attributable to the discharge of the debt, consisting of $77.0 million for the carrying value of the outstanding debt upon discharge, and $0.1 million for the unamortized discount on the associated debt and $0.7 million for debt issuance costs.