NOTE 11: Debt

Long-term debt at the end of fiscal 2017 and 2016 consisted of the following:

In Thousands	2017			2016

U.S. credit facility	$	50,000		$	155,000
U.S. Term Loan, due April 2020		225,000			237,500
3.625% Senior Notes, due April 2023		389,862			370,920
Government refundable advances		45,549			44,994
Debt issuance costs		(4,654	)		(5,609	)
Obligation under capital leases		71,091			67,765
		776,848			870,570
Less current maturities		17,424			16,774
Carrying amount of long-term debt	$	759,424		$	853,796

U.S. Credit Facility

On April 9, 2015, the Company amended the secured credit facility to extend the expiration to April 9, 2020, increase the revolving credit facility to $500 million, and provide for a delayed-draw term loan facility of $250 million. The Company recorded $2.3 million in debt issuance costs. The credit facility is secured by substantially all the Company’s assets, and interest is based on standard inter-bank offering rates. The interest rate ranges from LIBOR plus 1.25% to LIBOR plus 2.00%, depending on the leverage ratios at the time the funds are drawn. At September 29, 2017, the Company had $50.0 million outstanding under the secured credit facility at an interest rate of LIBOR plus 1.50%, which was 2.74%. An additional $27.5 million of unsecured foreign currency credit facilities have been extended by foreign banks for a total of $527.5 million available companywide. Available credit under the above credit facilities was $461.6 million at fiscal 2017 year end, when reduced by outstanding borrowings of $50.0 million and letters of credit of $15.9 million.

U.S. Term Loan, due April 2020

On August 3, 2015, the Company borrowed $250 million under the delayed-draw term loan provided for under the amended credit facility (U.S. Term Loan, due 2020). The interest rate on the U.S. Term Loan, due 2020, ranges from LIBOR plus 1.25% to LIBOR plus 2.00%, depending on the leverage ratios at the time the funds are drawn. At September 29, 2017, the interest rate was LIBOR plus 1.50%, which equaled 2.74%. The loan amortizes at 1.25% of the original principal balance quarterly through March 2020, with the remaining balance due in April 2020.

3.625% Senior Notes, due April 2023

In April 2015 TA Mfg. Limited, a wholly owned subsidiary, issued €330.0 million in 3.625% Senior Notes, due April 2023 (2023 Notes) requiring semi-annual interest payments in April and October of each year until maturity. The net proceeds from the sale of the notes, after deducting $5.9 million of debt issuance costs, were $350.8 million. The 2023 Notes are general unsecured senior obligations of the Company. The 2023 Notes are unconditionally guaranteed on a senior basis by the Company and certain subsidiaries of the Company that are guarantors under the Company’s existing secured credit facility. The 2023 Notes are subject to redemption at the option of the Company at any time prior to April 15, 2018, at a price equal to 100% of the principal amount, plus any accrued interest to the date of redemption and a make-whole provision. The Company may also redeem up to 35% of the 2023 Notes before April 15, 2018, with the net cash proceeds from equity offerings. The 2023 Notes are also subject to redemption at the option of the Company, in whole or in part, on or after April 15, 2018, at redemption prices starting at 102.719% of the principal amount plus accrued interest during the period beginning April 15, 2018, and declining annually to 100% of principal and accrued interest on or after April 15, 2021.

Based on quoted market prices, the fair value of the Company’s 2023 Notes was $403.2 million and $365.3 million as of September 29, 2017, and September 30, 2016, respectively. The carrying amounts of the secured credit facility and the U.S. Term Loan, due 2020, approximate fair value. The estimate of fair value for the 2023 Notes was based on Level 2 inputs as defined in the fair value hierarchy.

In connection with the redemption of debt in fiscal 2015, the Company incurred an $8.75 million redemption premium and wrote off $2.7 million in unamortized debt issuance costs as a loss on extinguishment of debt.

Government Refundable Advances

Government refundable advances consist of payments received from the Canadian government to assist in research and development related to commercial aviation based at our Canadian operation, CMC. The repayment of this advance is based on year-over-year commercial aviation revenue growth at CMC beginning in 2014. Imputed interest on the advance was 2.5% at September 29, 2017. The debt recognized was $45.5 million and $45.0 million as of September 29, 2017, and September 30, 2016, respectively.

Obligation Under Capital Lease

The Company leases building and equipment under capital leases. The present value of the minimum capital lease payments, net of the current portion, totaled $69.0 million as of September 29, 2017.

As of September 29, 2017, aggregate annual maturities of long-term debt and future non-cancelable minimum lease payments under capital lease obligations were as follows:

In Thousands

Fiscal Year
2018	$	23,374
2019		20,221
2020		260,854
2021		12,065
2022		12,522
2023 and thereafter		525,484
Total		854,520

Less: debt issuance costs		4,654
amount representing interest on capital leases		73,018
Total long-term debt	$	776,848

A number of underlying agreements contain various covenant restrictions which include maintenance of net worth, payment of dividends, interest coverage, and limitations on additional borrowings. The Company was in compliance with these covenants at September 29, 2017.