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Debt
 6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Debt Debt 
The table below summarizes the carrying amounts and weighted average interest rates of the Company’s debt (in thousands, except percentages):  
 June 30, 2021December 31, 2020
 Carrying
Amount		Interest
Rate		Carrying
Amount		Interest
Rate
Long-term debt, current and noncurrent:    
Borrowing under Wells Fargo Credit Facility$20,341 1.93 %$21,030 2.01 %
Mitsubishi Bank loans6,167 
1.07% -1.47%
7,662 
1.05%-1.45%
Mitsubishi Bank and Yamanashi Chuo Bank loan4,112 1.07 %5,002 1.07 %
Total long-term debt30,620 33,694 
Finance lease liability141 189 
Total long-term debt30,761 33,883 
Unaccreted discount and issuance costs(240) (324) 
Total long-term debt, net of unaccreted discount and issuance costs$30,521  $33,559  
Reported as:    
Current portion of long-term debt$3,033  $3,232  
Long-term debt, net of current portion27,488  30,327  
Total debt, net of unaccreted discount and issuance costs$30,521  $33,559  
Notes payable and short-term borrowing 
On June 17, 2021, NeoPhotonics (China) Co., Ltd., ("NeoPhotonics China"), a subsidiary of the Company, entered into a credit line agreement with Shanghai Pudong Development Bank Shenzhen Branch (“SPDB”) providing for a line of credit to NeoPhotonics China in an amount of RMB 120,000,000 (approximately $18.6 million) for short-term loans at varying interest rates.
On June 17, 2021, NeoPhotonics Dongguan Co., Ltd (“NeoPhotonics Dongguan”), also a subsidiary of the Company, entered into a credit line agreement with SPDB providing for a line of credit to NeoPhotonics Dongguan in an amount of RMB 30,000,000 (approximately $4.6 million) for short-term loans at varying interest rates.
These two agreements have superseded the previous credit line agreements entered into by NeoPhotonics China and NeoPhotonics Dongguan, respectively, with SPDB, and expire in February 2022.
The Company regularly issues notes payable to its suppliers in China. These notes are supported by non-interest bearing bank acceptance drafts issued under the Company’s existing line of credit facilities and are due three to six months after issuance. As a condition of the notes payable arrangements, the Company is required to keep a compensating balance at the issuing banks that is a percentage of the total notes payable balance until the amounts are settled.
Under these line of credit facilities, there were no bank acceptance drafts issued at June 30, 2021 and December 31, 2020.
As of June 30, 2021 and December 31, 2020, there were no non-interest bearing bank acceptance drafts issued in connection with our notes payable to our suppliers in China under these line of credit facilities. There were no compensating balances relating to these credit facilities as of June 30, 2021 and December 31, 2020, respectively. Compensating balances are classified as restricted cash on the Company’s condensed consolidated balance sheets.
Credit facilities
On June 29, 2021, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent for a lender group . The A&R Credit Agreement amends and restates in full that certain Credit Agreement dated as of September 8, 2017 (as amended, the "Former Credit Agreement"), by and among the Company and Wells Fargo. The A&R Credit Agreement provides for continuation of the $50 million revolving credit facility (the "Credit Facility"). Prior to the signing of the A&R Credit Agreement, the Company had drawn $21 million under the Former Credit Agreement, which amount was rolled over and is now treated as outstanding under the Credit Facility.
The Credit Facility provides for borrowings equal to the lower of (a) a maximum revolver amount of $50.0 million, or (b) an amount up to 90% of eligible accounts receivable plus 100% of qualified cash balances up to $15.0 million, less certain discretionary adjustments ("Borrowing Base"). The maximum revolver amount may be increased by up to $25.0 million, subject to certain conditions.
The Credit Facility matures on June 30, 2026 and borrowings bear interest, at the Company's options, at an interest rate of either (a) the LIBOR rate, plus an applicable margin ranging from 1.50% to 1.75% per annum, based upon the average excess availability (as defined in the Credit Facility), or (b) the prime lending rate, plus an applicable margin ranging from 0.50% to 0.75% per annum, based upon the average excess availability. The Company is also required to pay a commitment fee equal to 0.25% of the unused portion of the Credit Facility, monthly, in arrears.
The Credit Facility requires a mandatory prepayment of the borrowings to the extent the outstanding balance is greater than the lesser of (a) the most recently calculated Borrowing Base, or (b) the maximum revolver amount. The Company is required to maintain a combination of certain defined cash balances and unused borrowing capacity under the Credit Facility of at least $20.0 million, of which at least $5.0 million shall include unused borrowing capacity. The Agreement also restricts the Company's ability to dispose of assets, to permit change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments and make certain restricted payments. Borrowings under the Credit Facility are collateralized by substantially all of the Company's assets.
The Company was in compliance with the covenants of the Credit Facility as of June 30, 2021 and December 31, 2020 (under the terms of the Former Credit Agreement). As of June 30, 2021, the outstanding balance under the Credit Facility was $20.3 million and the weighted average rate under the LIBOR option was 1.93%. The remaining borrowing capacity as of June 30, 2021 was $14.0 million, of which $5.0 million is required to be maintained as unused borrowing capacity.
During the three months ended June 30, 2021, $0.1 million of accrued interest was included as a component of the principal amount of Wells Fargo Credit Facility.
Mitsubishi Bank loans
On February 25, 2015, the Company entered into certain loan agreements and related agreements with MUFG Bank, Ltd. (the “Mitsubishi Bank”) that provided for (i) a term loan in the aggregate principal amount of 500.0 million JPY ($4.4 million) (the “Term Loan A”) and (ii) a term loan in the aggregate principal amount of one billion JPY (approximately $9.0 million) (the “Term Loan B” and together with the Term Loan A, the “2015 Mitsubishi Bank Loans”). The 2015 Mitsubishi Bank Loans are secured by a mortgage on certain real property and buildings owned by the Company’s Japanese subsidiary. Interest on the 2015 Mitsubishi Bank Loans accrues and is paid monthly based upon the annual rate of the monthly Tokyo Interbank Offer Rate ("TIBOR") plus 1.40%. The Term Loan A required interest only payments until the maturity date of February 23, 2018, with a lump sum payment of the aggregate principal amount on the maturity date. The Term Loan B requires equal monthly payments of principal equal to 8.3 million JPY (approximately $0.1 million) until the maturity date of February 25, 2025, with a lump sum payment of the balance of 8.4 million JPY (approximately $0.1 million) on the maturity date. Interest on the Term Loan B is accrued based upon monthly TIBOR plus 1.40% and is secured by real estate collateral. In conjunction with the execution of the Bank Loans, the Company paid a loan structuring fee, including consumption tax, of 40.5 million JPY (approximately $0.4 million). The Term Loan A of 500.0 million JPY (approximately $4.4 million) was repaid to the Mitsubishi Bank in January 2018.
The 2015 Mitsubishi Bank Loans contain customary representations and warranties and customary affirmative and negative covenants applicable to the Company’s Japanese subsidiary, including, among other things, restrictions on cessation in business, management, mergers or acquisitions. The 2015 Mitsubishi Bank Loans contain financial covenants relating to minimum net assets, maximum ordinary loss and a coverage ratio covenant. The Company was in compliance with the related covenants as of June 30, 2021 and December 31, 2020. Outstanding principal balance for the Mitsubishi Term Loans was 366.7 million JPY (approximately $3.3 million) as of June 30, 2021.
In March 2017, the Company entered into a loan agreement and related agreements with the Mitsubishi Bank for a term loan of 690.0 million JPY (approximately $6.2 million) (the “2017 Mitsubishi Bank Loan”) to acquire manufacturing equipment for its Japanese subsidiary. This loan is secured by the manufacturing equipment owned by the Company's subsidiary in Japan. Interest on the 2017 Mitsubishi Bank Loan is based on the annual rate of the monthly TIBOR rate plus 1.00%. The 2017 Mitsubishi Bank Loan matures on March 29, 2024 and requires monthly interest and principal payments over 72 months commencing in April 2018. The loan contains customary covenants relating to minimum net assets, maximum ordinary loss and a coverage ratio covenant. The Company was in compliance with these covenants as of June 30, 2021 and December 31, 2020. The loan was available from March 31, 2017 to March 30, 2018 and 690.0 million JPY (approximately $6.2 million) under this loan was fully drawn in March 2017. Outstanding principal balance for the 2017 Mitsubishi Bank Loan was approximately 316.3 million JPY (approximately $2.9 million) as of June 30, 2021. 
Mitsubishi Bank and Yamanashi Chuo Bank loan
In January 2018, the Company entered into a term loan agreement with Mitsubishi Bank and The Yamanashi Chuo Bank, Ltd. for a term loan in the aggregate principal amount of 850.0 million JPY (approximately $7.7 million) (the “Term Loan C”). The purpose of the Term Loan C is to obtain machinery for the core parts of the manufacturing line and payments for related expenses by the Company's subsidiary in Japan. The Term Loan C requires no additional security. The Term Loan C was available from January 29, 2018 to January 29, 2025. The full amount of the Term Loan C was drawn in January 2018. Interest on the Term Loan C is based upon the annual rate of the three months TIBOR rate plus 1.00%. The Term Loan C requires quarterly interest payments, along with the principal payments, over 82 months commencing in April 2018. The Term Loan C loan agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Japanese Subsidiary, including, among other things, restrictions on cessation in business, management, mergers or acquisitions. The Term Loan C loan agreement contains financial covenants relating to minimum net assets and maximum ordinary loss. The Company was in compliance with these covenants as of June 30, 2021 and December 31, 2020. Outstanding principal balance for the Mitsubishi Bank and Yamanashi Chuo Bank Loan was approximately 455.4 million JPY (approximately $4.1 million) as of June 30, 2021.
As of June 30, 2021, maturities of total long-term debt were as follows (in thousands):
2021 (remaining six months)$1,616 
20223,080 
20233,037 
20242,260 
2025427 
Thereafter20,341 
 $30,761