Debt

12 Months Ended

Sep. 30, 2020

Long‑term debt consists of the following:



	September 30, 2020			September 30, 2019
First Lien Term Loan, due December 20, 2024	$	819,276		$	928,753
Equipment Financing, due September 30, 2023 to July 5, 2029, interest rates ranging from 3.59% to 8.07%	63,918			45,960
Notes Payable, due July 31, 2023	611			807
Mortgage, due June 30, 2028	1,665			1,635
Total debt	$	885,470		$	977,155
Less unamortized discount and lender fees	(9,436		)	(12,138		)
Total net debt	$	876,034		$	965,017
Less current portion	(14,339		)	(13,418		)
Total long‑term debt	$	861,695		$	951,599

Term Facilities and Revolving Credit Facility

On January 15, 2014, EWT Holdings III Corp. (“EWT III”), an indirect wholly-owned subsidiary of the Company, entered into a First Lien Credit Agreement and Second Lien Credit Agreement (the “Credit Agreements” or, after the prepayment and termination of the Second Lien Credit Agreement, the “First Lien Credit Agreement” or “Credit Agreement”) among EWT III, EWT Holdings II Corp., the lenders party thereto and Credit Suisse AG as administrative agent and collateral agent. The First Lien Credit Agreement provided for a seven-year term loan facility, and the Second Lien Credit Agreement provided for an eight-year term loan facility. The term loan facilities originally consisted of the “First Lien Term Loan” and “Second Lien Term Loan” in aggregate principal amounts of $505,000 and $75,000, respectively. The First Lien Credit Agreement also made available to the Company a $75,000 revolving credit facility (the “Revolver”), which provided for a

letter of credit sub-facility up to $35,000. During the year ended September 30, 2018, certain subsidiaries of the Company entered into two amendments to the Credit Agreement which provided for, among other things, the refinancing of the Existing Term Loans with the proceeds of refinancing term loans, extension of the maturity date to December 20, 2024, the reduction in the interest rate spreads on the Term Loan borrowing to 3.00% and an additional $150,000 borrowed in incremental term loans. In addition, the revolving credit commitment and letters of credit sublimit were increased to $125,000 and $45,000, respectively. The other terms of the Existing Credit Agreement, including rates, remain generally the same. As a result of the incremental borrowings, quarterly principal payments increased to $2,369. At September 30, 2019, the interest rate on borrowings was 5.11%, comprised of 2.11% LIBOR plus the 3.00% spread.

In January 2020, the Company utilized $100,000 of the proceeds from the sale of the Memcor product line to repay a portion of the Company’s First Lien Term Loans. As a result of the prepayment, the Company wrote off $1,795 of deferred financing fees during the three months ended March 31, 2020. On February 18, 2020, EWT III entered into Amendment No. 7 (the “Amendment”), among EWT III, as the borrower, EWT Holdings II Corp, as parent guarantor, the subsidiary guarantors party thereto, the financial institutions party thereto, and Credit Suisse AG, as administrative agent and collateral agent, relating to the Credit Agreement. As a result of the Amendment, the Company incurred $760 of fees which were recorded as deferred financing fees on the Consolidated Balance Sheets. Prior to the Amendment, First Lien Term Loans in an aggregate principal amount of approximately $826,000 (the “Existing Term Loans”) were outstanding under the Credit Agreement. Pursuant to the Amendment, the Existing Term Loans were refinanced. Additionally, the Amendment amended the Credit Agreement to, among other things:

(i)

reduce the interest rate spread applicable to term loans based on LIBOR from (A) 2.75% to 2.50% per annum during any period during which EWT III maintains a public corporate family rating better than or equal to B1 from Moody’s and B+ from S&P, in each case with a stable outlook (a “Ratings Condition Period”), and (B) 3.00% to 2.75% per annum for any period other than a Ratings Condition Period;


(ii)	reduce the interest rate spread applicable to term loans based on the Base Rate from (A) 1.75% to 1.50% per annum during any Ratings Condition Period and (B) 2.00% to 1.75% per annum during any period other than a Ratings Condition Period;


(iii)	remove the 1.00% floor for term loans based on LIBOR and the 2.00% floor for term loans based on the Base Rate;


(iv)	schedule existing indebtedness and investments, allowing EWT III and its subsidiaries to incur incremental indebtedness and make incremental investments under the applicable baskets;


(v)	increase the generally permitted investments basket; and


(vi)	extend the 1.00% prepayment premium for refinancing in connection with certain repricing transactions through August 18, 2020.

The Company makes quarterly principal payments of $2,369. At September 30, 2020, the interest rate on borrowings was 2.91%, comprised of 0.16% LIBOR plus the 2.75% spread.

Total deferred fees related to the First Lien Term Loan are $9,436 and $12,138, net of amortization, as of September 30, 2020 and September 30, 2019, respectively. These fees are included as a contra liability to debt on the Consolidated Balance Sheets.

The following summarizes the Company’s outstanding borrowings under the Revolver and outstanding letters of credit as of September 30, 2020 and September 30, 2019, respectively.



	September 30, 2020		September 30, 2019
Borrowing availability under the Revolver	$	125,000	$	125,000
Outstanding borrowings under the Revolver	—		—
Outstanding letters of credit under the Revolver	12,963		12,956
Unused amounts under the Revolver	$	112,037	$	112,044

Additional letters of credit under a separate arrangement	$	52	$	204

The First Lien Credit Agreement contains limitations on incremental borrowings, is subject to leverage ratios and allows for optional prepayments. Under certain circumstances, the Company may be required to remit excess cash flows as defined based upon exceeding certain leverage ratios. The Company did not exceed such ratios during the year ended September 30, 2020, does not anticipate exceeding such ratios during the year ending September 30, 2021, and therefore does not anticipate any additional repayments during the year ending September 30, 2021.

Repayment Schedule

Aggregate maturities of all long‑term debt, including current portion of long‑term debt and excluding finance lease obligations as of September 30, 2020, are presented below:



Year Ended September 30,
2021	$	16,451
2022	16,763
2023	17,043
2024	15,500
2025	788,844
Thereafter	30,869
Total	$	885,470