Borrowings

12 Months Ended

Sep. 27, 2019

BORROWINGS

The following table summarizes the Company's short-term borrowings:



	September 27, 2019
(In millions, except for percentages)	Amount		Weighted-Average Interest Rate
Short-term borrowings:
Revolving Credit Facility	$	410.0	3.05	%
Total short-term borrowings	$	410.0

As of September 28, 2018, the Company did not have any short-term borrowings.

On April 3, 2018, the Company entered into a credit agreement (the "Credit Agreement") with certain lenders and Bank of America, N.A. as the administrative agent. The Credit Agreement provided for a five-year revolving credit facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $1.8 billion. The Revolving Credit Facility also includes a $50.0 million sub-facility for the issuance of letters of credit and permits swing line loans of up to $25 million. Under the Revolving Credit Facility, the Company has the right to (i) request to increase the aggregate commitments by an aggregate amount for all such requests of up to $100.0 million and (ii) request an additional increase in the commitments or establish one or more term loans, provided that, in each case, the lenders are willing to provide such new or increased commitments and certain other conditions are met. The proceeds of the Revolving Credit Facility may be used for working capital, capital expenditures, Company share repurchases, permitted acquisitions and other corporate purposes.

On November 1, 2019, the Company entered into Amendment No. 2 to Credit Agreement (the “Amendment”) to its Credit Agreement dated as of April 3, 2018. See Note 18, "Subsequent Events" for more information on the Amendment to the Credit Agreement.

Borrowings under the Revolving Credit Facility accrue interest based on either (i) the Eurodollar Rate plus a margin of 1.000% to 1.375% based on a net leverage ratio involving funded indebtedness and EBITDA, or (ii) a base rate of (a) the federal funds rate plus 0.50%, (b) BofA’s announced prime rate, or (c) the Eurodollar Rate plus 1.00%, whichever is highest, plus a margin of 0.000% to 0.375% based on the same leverage ratio, depending upon instructions from the Company. Borrowings under the Eurodollar Rate have a contract repayment date of twelve months, or less. Borrowings under the base rate can be made on an overnight basis and have a final maturity of five years.

The Company must pay a commitment fee on the unused portion of the Revolving Credit Facility at a rate from 0.125% to 0.25% based on a net leverage ratio. The Company may prepay, reduce or terminate the commitments without penalty. Swing line loans under the Revolving Credit Facility will bear interest at the base rate plus the then applicable margin for base rate loans. The Company paid commitment fees of $2.3 million, $0.9 million and $0.7 million in fiscal years 2019, 2018 and 2017, respectively, related to its borrowings.

The Credit Agreement provides that certain material domestic subsidiaries must guarantee the Revolving Credit Facility, subject to certain limitations on the amount secured. As of September 27, 2019, no subsidiary guarantees were required to be executed under the Credit Agreement.

The Credit Agreement contains provisions that limit the Company's ability to, among other things, incur future indebtedness, contingent obligations or liens, guarantee indebtedness, make certain investments and capital expenditures, sell stock or assets and pay dividends, and consummate certain mergers or acquisitions.

The Credit Agreement contains affirmative and negative covenants applicable to the Company and its subsidiaries that are typical for credit facilities of this type, and that are subject to materiality and other qualifications, carve-outs, baskets and exceptions. The Company agreed to maintain a financial covenant which requires a maximum consolidated net leverage ratio. The Company was in compliance with all financial covenants under the Credit Agreement for fiscal year 2019.

Other Borrowings

VMS’s Japanese subsidiary (“VMS KK”) has an unsecured uncommitted credit agreement with Sumitomo that enables VMS KK to borrow and have outstanding at any given time a maximum of 3.0 billion Japanese Yen (the “Sumitomo Credit Facility”). In February 2019, the Sumitomo Credit Facility was extended and will expire in February 2020. Borrowings under

the Sumitomo Credit Facility accrue interest based on the basic loan rate announced by the Bank of Japan plus a margin of 0.5%. As of September 27, 2019, the Company did not have an outstanding principal balance on its Sumitomo Credit Facility.

Total Company interest paid on borrowings was $3.2 million, $4.6 million and $9.0 million in fiscal years 2019, 2018 and 2017, respectively.