Debt

12 Months Ended

Dec. 31, 2019

4. Debt

Long-term Debt

Long-term debt consisted of the following unsecured obligations at December 31:

(in thousands)	2019			2018
3.66% senior notes due November 2023	$	75,000		$	75,000
3.65% senior notes due May 2024		27,000			27,000
4.19% senior notes due November 2025		25,000			25,000
1.27% Euro-denominated senior notes due May 2024		56,066			57,333
1.71% Euro-denominated senior notes due May 2027		44,853			45,866
3.06% Euro-denominated senior notes due November 2023		42,887			43,856
1.85% Euro-denominated senior notes due November 2022		74,968			76,662
2.53% British Pound-denominated notes due November 2023		33,143			31,884
2.76% British Pound-denominated notes due November 2025		33,143			31,884
Term loan		51,438			132,313
Revolving Credit Facilities		134,393			142,061
Various other notes		783			923
		598,674			689,782
Less debt fees		(175	)		(229	)
Total long-term debt	$	598,499		$	689,553

In October 2019, the Company amended its accounts receivable securitization program with Wells Fargo Bank N.A. (Wells Fargo) to reduce the program amount from $70 million to $65 million. Under the amended program, Wells Fargo has extended a secured loan (Secured Loan) of up to $65 million to the Company secured by Wells Fargo’s undivided interests in certain of the Company’s trade accounts receivables. The interest rate on the Secured Loan is LIBOR plus 0.70%. The Company has the intent and ability either to repay the Secured Loan with available funds from the Company’s existing long-term revolving credit facility, or to extend its accounts receivable program with Wells Fargo when it matures. Accordingly, the Secured Loan has been classified as long-term debt on the Company’s Consolidated Balance Sheet and is included with the Revolving Credit Facilities above. As of December 31, 2019, the amount was fully drawn.

In July 2018, the Company borrowed 50 million British Pounds and 45 million Euros under its revolving credit facility to act as a partial hedge of the Company’s net asset positions in British Pounds and Euros. See Note 5, Derivatives and Hedging Activity, for additional information. The proceeds of these borrowings were used to repay the U.S. dollar denominated borrowings under the Company’s revolving credit facility.

In November 2018, the Company replaced the 50 million British Pounds revolver borrowing with 50 million British Pounds of private placement notes. The two notes were issued for 25 million British Pounds each, maturing in November 2023 and November 2025, and bearing interest rates of 2.53% and 2.76%, respectively. At the same time, the Company issued $25 million of private placement notes, maturing in November 2025, and bearing an interest rate of 4.19%, the proceeds of which were used to repay maturing private placement debt.

In May 2017, the Company executed an amended and restated credit agreement with a syndicate of banks to, among other things, (a) increase Sensient’s term loan facility by $30 million (from $115 million to $145 million), (b) extend the maturity of Sensient’s $350 million multi-currency revolving credit facility from November 2020 to May 2022, and (c) modify certain other provisions of the credit agreement as set forth therein. At December 31, 2019, the Company’s term loan borrowings total $51.4 million, with repayments continuing into 2022. Borrowings under both the revolving credit and term loan facilities bear interest at a variable rate, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.

The borrowings under the Term Loan had an average interest rate of 3.83% and 3.48% for the years ended December 31, 2019 and 2018, respectively.

The borrowings under the Revolving Credit Facility, excluding borrowings on the accounts receivable securitization program, had an average interest rate of 1.44% and 2.08% for the years ended December 31, 2019 and 2018, respectively.

The aggregate amounts of contractual maturities on long-term debt subsequent to December 31, 2019, are as follows: 2020, $128.3 million; 2021, $14.6 million; 2022, $118.3 million; 2023, $151.2 million; 2024, $83.2 million; and thereafter, $102.9 million.

The Company has approximately $12.8 million of long-term term loan debt and $50.5 million of debt outstanding on an uncommitted Euro revolving credit facility that mature in 2020. The Company is able and intends to refinance these maturities under the long-term revolving credit facility. Accordingly, that maturing debt has been classified as long-term debt in the Consolidated Balance Sheet.

The Company had $319.5 million available under the revolving credit facility and $58.1 million available under other lines of credit from several banks at December 31, 2019.

Substantially all of the senior financing obligations contain restrictions concerning interest coverage, borrowings, and investments. The Company is in compliance with all of these restrictions at December 31, 2019. The following table summarizes the Company’s most restrictive loan covenants calculated in accordance with the applicable agreements as of December 31, 2019:

	Actual	Required
Debt to EBITDA⁽¹⁾ (Maximum)	2.86	<3.50
Interest Coverage (Minimum)	5.25	>2.00

⁽¹⁾

Debt to EBITDA is defined in the Company’s debt covenants as total funded debt divided by the Company’s consolidated operating income excluding non-operating gains and losses and depreciation and amortization.

The Company had stand-by and trade letters of credit outstanding of $2.6 million and $6.4 million as of December 31, 2019 and 2018, respectively.

Short-term Borrowings

The Company’s short-term borrowings consisted of the following items at December 31:

(in thousands)	2019		2018
U.S. credit facilities	$	20,280	$	19,768
Loans of foreign subsidiaries		332		278
Total	$	20,612	$	20,046

The weighted average interest rates on short-term borrowings were 2.53% and 3.24% at December 31, 2019 and 2018, respectively.