Debt

3 Months Ended

Sep. 30, 2020

On July 10, 2020, the Company completed its offering and sale of $400 million in aggregate principal amount of 6.375% Senior Notes due 2028 (the “Notes”). The Notes accrue interest at the rate of 6.375% per annum, with interest payable in cash semi-annually in arrears on each January 15 and July 15, commencing January 15, 2021. The Notes will mature on July 15, 2028. The Notes are senior unsecured indebtedness of the Company, ranking equally in right of payment with all its existing and future senior unsecured indebtedness and senior to any future subordinated indebtedness. The Company utilized a portion of the net proceeds from the issuance of the Notes to repay in full $250.0 million in aggregate principal amount of its senior unsecured notes due July 2021. The Company used or intends to use the remaining net proceeds from the issuance of the Notes for general corporate purposes.

The Company maintains a $400.0 million unsecured revolving credit facility (“Credit Agreement”) that extends to March 2022. Interest on the borrowings under the Credit Agreement accrue at variable rates, based upon LIBOR or a defined “Base Rate”. Both are determined based upon the credit rating of the Company’s senior unsecured long-term debt (the “Debt Rating”). The applicable margin to be added to LIBOR ranges from 1.00% to 1.75% (1.25% as of September 30, 2020), and for Base Rate-determined loans, from 0.00% to 0.75% (0.25% as of September 30, 2020). The Company also pays a quarterly commitment fee ranging from 0.125% to 0.400% (0.20% as of September 30, 2020), determined based upon the Debt Rating, of the unused portion of the $400.0 million commitment under the Credit Agreement. In addition, the Company must pay certain letter of credit fees, ranging from 1.00% to 1.75% (1.50% as of September 30, 2020), with respect to letters of credit issued under the Credit Agreement. The Company has the right to voluntarily prepay and re-borrow loans and to terminate or reduce the commitments under the facility. As of September 30, 2020, the Company had $6.0 million of issued letters of credit and no short-term borrowings under the Credit Agreement with the balance of $394.0 million available to the Company. As of September 30, 2020, the borrowing rate for the Credit Agreement was 1.65%.

The Company is subject to certain financial and restrictive covenants under the Credit Agreement, which, among other things, require the maintenance of a minimum interest coverage ratio of 3.50 to 1.00. The interest coverage ratio is defined in the Credit Agreement as, for any period, the ratio of consolidated earnings before interest, taxes, depreciation and amortization and non-cash net pension expense (“EBITDA”) to consolidated interest expense for such period. The Credit Agreement also requires the Company to maintain a debt to capital ratio of less than 55 percent. The debt to capital ratio is defined in the Credit Agreement as the ratio of consolidated indebtedness, as defined therein, to consolidated capitalization, as defined therein. As of September 30, 2020 and June 30, 2020, the Company was in compliance with all of the covenants of the Credit Agreement.

Long-term debt outstanding as of September 30, 2020 and June 30, 2020 consisted of the following:


($ in millions)	September 30, 2020		June 30, 2020
Senior unsecured notes, 5.20% due July 2021 (face value of $250.0 million at June 30, 2020)	$	—	$	252.3
Senior unsecured notes, 4.45% due March 2023 (face value of $300.0 million at September 30, 2020 and June 30, 2020)	299.3		299.5
Senior unsecured notes, 6.375% due July 2028 (face value of $400.0 million at September 30, 2020)	394.5		—
Total	693.8		551.8
Less: amounts due within one year	—		—
Long-term debt, net of current portion	$	693.8	$	551.8

At September 30, 2020, capitalized debt issuance costs in connection with the offering and sale of the Notes totaled $5.6 million. Debt issuance costs are amortized to interest expense over the life of the debt instrument, which is eight years. The Company's debt issuance cost amortization was $0.1 million for the three months ended September 30, 2020.

For the three months ended September 30, 2020 and 2019, interest costs totaled $17.7 million and $7.4 million, respectively, of which $2.8 million and $2.0 million, respectively, were capitalized as part of the cost of property, plant, equipment and software. Interest expense for the three months ended September 30, 2020 also includes $10.5 million of debt prepayment costs on the Notes due July 2021 offset by gains of $2.3 million on related interest rate swaps that were terminated in connection with prepayment.