Financing Agreements

6 Months Ended

Mar. 31, 2020

Short-Term Borrowings

Securitization Facilities

The Company has a 364-day accounts receivable securitization program (the “Securitization Facility”) for borrowings up to $110.0 million and a 364-day facility for borrowings up to $90.0 million (the “Note Securitization Facility”) with certain financial institutions. Under the terms of each the Securitization Facility and Note Securitization Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount of permissible borrowings outstanding is determined based on the amount of qualifying accounts receivable at any point in time. Borrowings outstanding under the Securitization Facility and Note Securitization Facility bear interest at LIBOR plus the applicable margin of 0.8% and 1.0% and are included as a component of Short-term borrowings, while the accounts receivable securing these obligations remain as a component of Trade accounts receivable, net of allowances.

As of March 31, 2020 these facilities had an expiration date of May 1, 2020, but were renewed on April 27, 2020 through April 26, 2021. The terms and conditions of the renewed facilities are substantially similar to the expired facilities. Borrowings outstanding under the renewed Securitization Facility and renewed Note Securitization Facility bear interest at LIBOR plus the applicable margin of 0.8% and 0.9%.

Long-Term Debt

Long-Term Debt Redemption

In September 2019, we issued senior unsecured notes of $425.0 million maturing September 2027 that bear interest at a fixed rate of 4.375% annually and capitalized debt issuance costs of $6.3 million. On October 7, 2019, we used the net proceeds from the offering of these notes, together with funds borrowed from the Revolving Credit Facility maturing in August 2024 (“2024 Revolving Credit Facility”), to redeem all of our previously outstanding senior unsecured 5.75% notes due September 2023 and to pay the prepayment premium of $12.2 million. We recorded a loss on extinguishment of debt of $15.6 million, which was comprised of the $12.2 million prepayment premium and $3.4 million of debt issuance costs previously capitalized.

As of March 31, 2020, there were $185.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,007.8 million after giving effect to the $7.2 million of outstanding standby letters of credit. As of September 30, 2019, there were $80.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,112.8 million after giving effect to $7.2 million of outstanding standby letters of credit.

See Note 6. Financing Agreements within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Fair Value

The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our variable rate short-term debt instruments, our senior secured Term Loan A facility maturing in August 2024 (“2024 TLA Facility”) and our 2024 Revolving Credit Facility approximate fair value.

The estimated fair values of our long-term debt instruments are described in the table below:


	March 31, 2020		September 30, 2019
Senior unsecured 5.00% notes due on February 14, 2025	$	303.1	$	312.4
Senior unsecured 4.375% notes due on September 15, 2027	419.1		435.4
Unsecured debentures	44.8		48.1
Total	$	767.0	$	795.9

The estimated fair values of our long-term unsecured debentures were based on observable inputs such as quoted prices in markets that are not active. The estimated fair values of the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements were classified as Level 2.

Debt Covenants

As of March 31, 2020, we were in compliance with all debt covenants under our financing agreements.