Long-Term Debt

3 Months Ended

Oct. 31, 2020

The components of long-term debt are as follows:


	October 31, 2020		July 31, 2020
Term loan	$	1,530,305	$	1,597,091

Unsecured notes	29,245		29,620
Other debt	80,361		84,500
Gross long-term debt	1,639,911		1,711,211
Debt issuance costs, net of amortization	(42,373)		(44,563)
Total long-term debt, net of debt issuance costs	1,597,538		1,666,648
Less: current portion of long-term debt	(12,519)		(13,817)
Total long-term debt, net, less current portion	$	1,585,019	$	1,652,831

On February 1, 2019, the Company entered into a seven-year term loan (“term loan”) agreement, which consists of both a United States Dollar-denominated term loan tranche and a Euro-denominated term loan tranche, and a $750,000 revolving asset-based credit facility (“ABL”). Subject to earlier termination, the term loan matures on February 1, 2026 and the ABL matures on February 1, 2024.

As of October 31, 2020, the entire outstanding U.S. term loan tranche balance of $941,900 was subject to a LIBOR-based rate totaling 3.938%, but the interest rate on $631,800 of that balance was fixed at 6.216% through an interest rate swap, dated March 18, 2019, by swapping the underlying 1-month LIBOR rate for a fixed rate of 2.466%. As of July 31, 2020, the entire outstanding U.S. term loan tranche balance of $941,900 was subject to a LIBOR-base rate of 3.938%, but the interest rate on $673,400 of that balance was fixed at 6.216% through an interest rate swap, dated March 18, 2019, by swapping the underlying 1-month LIBOR rate for a fixed rate of 2.466%. The total interest rate on both the October 31, 2020 and July 31, 2020 outstanding Euro term loan tranche balance of $588,405 and $655,191, respectively, was 4.00%.

The Company must make mandatory prepayments of principal under the term loan agreement upon the occurrence of certain specified events, including certain asset sales, debt issuances and receipt of annual cash flows in excess of certain amounts. No such specified events occurred during the three months ended October 31, 2020 or 2019.

Availability under the ABL agreement is subject to a borrowing base based on a percentage of applicable eligible receivables and eligible inventory. The ABL carries interest at an annual base rate plus 0.25% to 0.75%, or LIBOR plus 1.25% to 1.75%, based on adjusted excess availability as defined in the ABL agreement. This agreement also includes a 0.25% unused facility fee. The Company may, generally at its option, pay any borrowings under the ABL, in whole or in part, at any time and from time to time, without premium or penalty. There were no borrowings outstanding on the ABL agreement as of October 31, 2020 or July 31, 2020.

The unused availability under the ABL is generally available to the Company for general operating purposes and, based on October 31, 2020 eligible accounts receivable and inventory balances, net of amounts drawn, totaled approximately $720,000.

The unsecured notes of 25,000 Euro ($29,245) relate to long-term debt of our European segment. There are two series, 20,000 Euro ($23,396) with an interest rate of 1.945% maturing in March 2025, and 5,000 Euro ($5,849) with an interest rate of 2.534% maturing February 2028. Other debt relates primarily to real estate loans with varying maturity dates through September 2032 and interest rates ranging from 1.40% to 3.43%.

Total contractual gross debt maturities are as follows:


For the remainder of the fiscal year ending July 31, 2021	$	10,266
For the fiscal year ending July 31, 2022	11,875
For the fiscal year ending July 31, 2023	11,996
For the fiscal year ending July 31, 2024	12,121
For the fiscal year ending July 31, 2025	35,395
For the fiscal year ending July 31, 2026 and thereafter	1,558,258
	$	1,639,911

For the three months ended October 31, 2020 and October 31, 2019, interest expense on the term loan, ABL and other debt facilities was $20,588 and $24,349, respectively. The Company incurred fees to secure the term loan and ABL, and those amounts are being amortized ratably over the respective seven and five-year terms of those agreements. The Company recorded total charges related to the amortization of these term loan and ABL fees, which are included in interest expense, of $2,723 and $2,685 for the three months ended October 31, 2020 and October 31, 2019, respectively. The unamortized balance of the ABL facility fees was $9,106 at October 31, 2020 and $9,807 as of July 31, 2020 and is included in Other long-term assets in the Condensed Consolidated Balance Sheets.

The fair value of the Company’s term loan debt at October 31, 2020 and July 31, 2020 was $1,516,474 and $1,565,866, respectively. The carrying value of the Company’s Term loan debt, excluding debt issuance costs, was $1,530,305 and $1,597,091 at October 31, 2020 and July 31, 2020, respectively. The fair value of the Company's debt is primarily estimated using Level 2 inputs as defined by ASC 820, primarily based on quoted market prices for the term loan debt. The fair value of other debt held by the Company approximates fair value.