Note 14: Indebtedness

In November 2016, the Company entered into new credit agreements to fund a significant portion of its acquisition of Luvata HTS (see Note 2 for additional information). The Company executed an amended and restated credit agreement with a syndicate of banks that provides for both U.S. dollar- and euro-denominated term loan facilities and a multi-currency $175.0 million revolving credit facility expiring in November 2021, which replaced the Company’s then-existing revolver that would have expired in August 2018. Based upon the terms of the credit agreement and currency denomination, borrowings under both the term loans and revolving credit facilities bear interest at a variable rate, primarily either the London Interbank Offered Rate (“LIBOR”) or Euro Interbank Offered Rate (“EURIBOR”), plus 137.5 to 250 basis points (3.1 percent weighted-average at December 31, 2016) depending on the Company’s leverage ratio, as described below. At December 31, 2016, the Company’s term loan borrowings totaled $271.1 million, with repayments beginning in the fourth quarter of fiscal 2017 and continuing through fiscal 2022. Also in November 2016, the Company issued $50.0 million of 5.8 percent Senior Notes with repayments ending in fiscal 2027.

Long-term debt consisted of the following:

	Fiscal year of maturity		December 31, 2016			March 31, 2016
Term loans		2017-2022	$	271.1		$	-
6.8% Senior Notes		2017-2021		121.0			125.0
5.8% Senior Notes		2022-2027		50.0			-
Foreign credit agreements		2018-2020		0.3			0.4
Other (a)		2017-2030		8.0			8.6
				450.4			134.0
Less: current portion				(30.0	)		(8.5	)
Less: unamortized debt issuance costs				(7.2	)		-
Total long-term debt			$	413.2		$	125.5

(a)	Other long-term debt includes capital lease obligations and other financing-type obligations.

Long-term debt matures as follows:

Fiscal Year
Remainder of 2017	$	7.5
2018		31.7
2019		38.5
2020		43.7
2021		98.2
2022 & Beyond		230.8
Total	$	450.4

At December 31, 2016, the Company reported its revolving credit facility borrowings of $37.5 million as short-term debt on the consolidated balance sheet. At December 31, 2016, domestic letters of credit totaled $2.0 million, resulting in available borrowings under the Company’s revolving credit facility of $135.5 million. The Company also maintains credit agreements for its foreign subsidiaries, with outstanding short-term borrowings at December 31, 2016 and March 31, 2016 of $33.1 million and $28.6 million, respectively. At December 31, 2016, the Company’s foreign unused lines of credit totaled $20.0 million. In aggregate, the Company had total available lines of credit of $155.5 million at December 31, 2016.

Provisions in the Company’s amended and restated credit agreement, Senior Note agreements, and various foreign credit agreements require the Company to maintain compliance with various covenants and include certain cross-default clauses. Under its primary debt agreements in the U.S., the Company has provided liens on substantially all domestic assets. In addition, the term loans require prepayments, as defined in the credit agreement, in the event the Company’s annual excess cash flow exceeds defined levels or in the event of certain asset sales. The Company is also subject to a leverage ratio covenant, which requires the Company to limit its consolidated indebtedness, less a portion of its cash balance, both as defined by the credit agreement, to no more than three and one-quarter times consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”). As permitted by the credit agreements and in connection with the Company’s acquisition of Luvata HTS, this leverage ratio has been temporarily raised to no more than three and three-quarters times Adjusted EBITDA through the second quarter of fiscal 2018, and thereafter to no more than three and one-half times Adjusted EBITDA through the first quarter of fiscal 2019. The Company is also subject to an interest expense coverage ratio, which requires the Company to maintain Adjusted EBITDA of at least three times consolidated interest expense. The Company was in compliance with its debt covenants as of December 31, 2016.

The Company estimates the fair value of long-term debt using discounted future cash flows at rates offered to the Company for similar debt instruments of comparable maturities. At December 31, 2016 and March 31, 2016, the carrying value of Modine’s long-term debt approximated fair value, with the exception of the Senior Notes, which had an aggregate fair value of approximately $174.0 million and $139.0 million, respectively. The fair value of the Senior Notes and term loans are categorized as Level 2 within the fair value hierarchy. Refer to Note 3 for the definition of a Level 2 fair value measurement.