Indebtedness

12 Months Ended

Oct. 31, 2021


6			Indebtedness

The following is a summary of the company's indebtedness (in thousands):


October 31	2021		2020
Revolving credit facility	$	—	$	—
$270 million term loan	270,000		—
$200 million term loan	—		100,000
$300 million term loan	—		180,000
$190 million term loan	—		90,000
3.81% series A senior notes	100,000		100,000
3.91% series B senior notes	100,000		100,000
7.8% debentures	100,000		100,000
6.625% senior notes	124,040		123,978
Less: unamortized discounts, debt issuance costs, and deferred charges	2,798		2,855
Total long-term debt	691,242		791,123
Less: current portion of long-term debt	—		99,873
Long-term debt, less current portion	$	691,242	$	691,250

Principal payments required on the company's outstanding indebtedness, based on the maturity dates defined within the company's debt arrangements, for each of the next five fiscal years are as follows: fiscal 2022, $0.0 million; fiscal 2023, $0.0 million; fiscal 2024, $0.0 million; fiscal 2025, $27.0 million; fiscal 2026, $243.0 million; and after fiscal 2026, $425.0 million.

Revolving Credit Facility

On October 5, 2021, the company entered into an amended and restated credit agreement ("amended credit agreement") that provided for, among other things, a five-year unsecured revolving credit facility with a borrowing capacity of up to $600.0 million ("revolving credit facility") that matures on October 5, 2026 and replaced the company's prior $600.0 million unsecured senior revolving credit facility scheduled to mature on June 19, 2023. Included in the revolving credit facility is a $10.0 million sublimit for standby letters of credit and a $30.0 million sublimit for swingline loans. At the company's election, and with the approval of the named borrowers on the revolving credit facility and the election of the lenders to fund such increase, the aggregate maximum principal amount available under the revolving credit facility may be increased by an amount of up to $300.0 million. Funds are available under the revolving credit facility for working capital, capital expenditures, and other lawful corporate purposes, including, but not limited to, acquisitions and common stock repurchases, subject in each case to compliance with certain financial covenants as defined in the credit agreement. As of October 31, 2021, the company had no outstanding borrowings under the revolving credit facility and $3.1 million outstanding under the sublimit for standby letters of credit, resulting in $596.9 million of unutilized availability under the revolving credit facility. As of October 31, 2020, the company had no outstanding borrowings under the prior revolving credit facility and $2.5 million outstanding under the prior sublimit for standby

letters of credit, resulting in $597.5 million of unutilized availability under the prior revolving credit facility.

Outstanding loans under the revolving credit facility (other than swingline loans), if applicable, bear interest at a variable rate generally based on LIBOR or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on LIBOR, in each case subject to an additional basis point spread as defined in the credit agreement. Swingline loans under the revolving credit facility bear interest at a rate determined by the swingline lender or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on LIBOR, in each case subject to an additional basis point spread as defined in the credit agreement. Interest is payable quarterly in arrears. During fiscal 2020 and 2019, the company incurred interest expense of $0.8 million, and $1.9 million, respectively, on the outstanding borrowings under the prior revolving credit facility. No interest expense was incurred under the company's current and prior revolving credit facilities during fiscal 2021.

The company's revolving credit facility contains customary covenants, including, without limitation, financial covenants, such as the maintenance of a maximum leverage ratio; and negative covenants, which among other things, limit cash dividends, disposition of assets, consolidations and mergers, liens, and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The company was in compliance with all covenants related to the credit agreement for the company's revolving credit facility as of October 31, 2021.

$270.0 Million Term Loan Credit Agreement

The amended credit agreement executed on October 5, 2021 also provided for a five-year unsecured term loan in an aggregate principal amount of $270.0 million, the entire amount of which was funded on October 5, 2021 and matures on October 5, 2026 ("$270.0 million term loan"). Under the amended credit agreement, incremental term loan commitments may be established at the company's election and the approval of the borrowers on the $270.0 million term loan by an amount of up to $100.0 million.

Beginning December 31, 2024, the company is required to make quarterly principal amortization payments on the $270.0 million term loan equal to $6.75 million. On October 5, 2026, the aggregate principal amount of any remaining outstanding borrowings under the $270.0 million term loan is required to be repaid. The $270.0 million term loan may be prepaid and terminated at the company's election at any time without penalty or premium. Amounts repaid or prepaid may not be reborrowed. As of October 31, 2021, there was $270.0 million of outstanding borrowings under the $270.0 million term loan.

Outstanding borrowings under the $270.0 million term loan bear interest at a variable rate generally based on LIBOR or

an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on LIBOR, in each case subject to an additional basis point spread as defined in the credit agreement. Interest is payable quarterly in arrears. For the fiscal year ended October 31, 2021, the company incurred interest expense of $0.2 million on the outstanding borrowings under the $270.0 million term loan. No interest expense was incurred during fiscal 2020 and 2019.

The $270.0 million term loan contains customary covenants, including, without limitation, financial covenants generally consistent with those applicable under the company's revolving credit facility and the company was in compliance with all covenants as of October 31, 2021.

$500.0 Million Term Loan Credit Agreement

In March 2019, the company entered into a term loan credit agreement with a syndicate of financial institutions for the purpose of partially funding the CMW purchase price and the related fees and expenses incurred in connection with such acquisition. The term loan credit agreement provided for a $200.0 million three-year unsecured senior term loan facility maturing on April 1, 2022 ("$200.0 million term loan) and a $300.0 million five-year unsecured senior term loan facility maturing on April 1, 2024 ("$300.0 million term loan" and collectively with the $200.0 million term loan, the "$500.0 million term loan"). The funds under the $500.0 million term loan were received on the CMW closing date.

As of October 31, 2020, the company had prepaid $100.0 million and $120.0 million of the outstanding principal balances of the $200.0 million term loan and $300.0 million term loan, respectively. Thus, as of October 31, 2020, there was $100.0 million and $180.0 million of outstanding borrowings under the $200.0 million term loan and $300.0 million term loan, respectively. During the second quarter of fiscal 2021, the company prepaid $10.0 million of the remaining outstanding borrowings under the $300.0 million term loan. As a result of the execution of the amended credit agreement during the fourth quarter of fiscal 2021, the remaining $100.0 million and $170.0 million outstanding principal balances under the $200.0 million term loan and $300.0 million term loan, respectively, were paid in full. As a result of the prepayment, there were no outstanding borrowings under the $200.0 million three-year unsecured senior term loan facility and $300.0 million five-year unsecured senior term loan facility, respectively, as of October 31, 2021.

Interest was previously calculated on outstanding borrowings under the $500.0 million term loan by utilizing a variable rate generally based on LIBOR or an alternative variable rate, based on the highest of the Bank of America prime rate, the federal funds rate, or a rate generally based on LIBOR, in each case subject to an additional basis point spread as defined in the $500.0 million term loan. Interest was payable quarterly in arrears. During the fiscal years ended October 31, 2021, 2020, and 2019, the company incurred

$3.1 million, $5.2 million, and $7.5 million, respectively, of interest expense on the outstanding borrowings of the $500.0 million term loan.

$190.0 Million Term Loan Credit Agreement

On March 30, 2020, the company entered into a $190.0 million term loan credit agreement ("$190.0 million term loan") with certain financial institutions for the purpose of refinancing certain of its outstanding borrowings incurred in connection with the company's acquisition of Venture Products on March 2, 2020, as well as a precautionary measure to increase the company's liquidity and preserve financial flexibility in light of the uncertainty in the global financial and commercial markets as a result of COVID-19. The $190.0 million term loan provided for a $190.0 million three-year unsecured senior term loan facility maturing on June 19, 2023.

As of October 31, 2020, the company had prepaid $100.0 million of the outstanding principal balance of the $190.0 million term loan, resulting in a remaining outstanding principal balance of $90.0 million. During the first quarter of fiscal 2021, the company prepaid the remaining $90.0 million outstanding principal balance of the $190.0 million term loan. As a result of the prepayment, there were no outstanding borrowings under the $190.0 million term loan as of October 31, 2021.

Interest was previously calculated on outstanding borrowings under the $190.0 million term loan by utilizing a variable rate based on LIBOR or an alternative variable rate with a minimum rate of 0.75 percent, subject to an additional basis point spread as defined in the term loan credit agreement. Interest was payable quarterly in arrears. For the fiscal years ended October 31, 2021 and 2020, the company incurred interest expense of approximately $0.3 million and $2.4 million, respectively, on the outstanding borrowings under the $190.0 million term loan.

3.81% Series A and 3.91% Series B Senior Notes

On April 30, 2019, the company entered into a private placement note purchase agreement with certain purchasers ("holders") pursuant to which the company agreed to issue and sell an aggregate principal amount of $100.0 million of 3.81% Series A Senior Notes due June 15, 2029 ("Series A Senior Notes") and $100.0 million of 3.91% Series B Senior Notes due June 15, 2031 ("Series B Senior Notes" and together with the Series A Senior Notes, the "Senior Notes"). On June 27, 2019, the company issued $100.0 million of the Series A Senior Notes and $100.0 million of the Series B Senior Notes pursuant to the private placement note purchase agreement. The Senior Notes are unsecured senior obligations of the company.

No principal is due on the Senior Notes prior to their stated due dates. The company has the right to prepay all or a portion of either series of the Senior Notes in amounts equal to not less than 10.0 percent of the principal amount of the Senior Notes then outstanding upon notice to the holders of the series of Senior Notes being prepaid for 100.0 percent of

the principal amount prepaid, plus a make-whole premium, as set forth in the private placement note purchase agreement, plus accrued and unpaid interest, if any, to the date of prepayment. In addition, at any time on or after the date that is 90 days prior to the maturity date of the respective series, the company has the right to prepay all of the outstanding Senior Note of such series for 100.0 percent of the principal amount so prepaid, plus accrued and unpaid interest, if any, to the date of prepayment. Upon the occurrence of certain change of control events, the company is required to offer to prepay all Senior Notes for the principal amount thereof plus accrued and unpaid interest, if any, to the date of prepayment.

Interest on the Senior Notes is payable semiannually on the 15th day of June and December in each year. The company incurred interest expense on the Senior Notes of $7.7 million, $7.7 million, and $2.6 million, respectively, for the fiscal years ended October 31, 2021, 2020, and 2019.

The private placement note purchase agreement contains customary representations and warranties of the company, as well as certain customary covenants, including, without limitation, financial covenants, such as the maintenance of minimum interest coverage and maximum leverage ratios, and other covenants, which, among other things, provide limitations on transactions with affiliates, mergers, consolidations and sales of assets, liens and priority debt. The company was in compliance with all representations, warranties, and covenants related to the private placement note purchase agreement as of October 31, 2021.

7.8% Debentures

In June 1997, the company issued $175.0 million of debt securities consisting of $75.0 million of 7.125 percent coupon 10-year notes and $100.0 million of 7.8 percent coupon 30-year debentures. The $75.0 million of 7.125 percent coupon 10-year notes were repaid at maturity during fiscal 2007. In connection with the issuance of $175.0 million in long-term debt securities, the company paid $23.7 million to terminate three forward-starting interest rate swap agreements with notional amounts totaling $125.0 million. These swap agreements had been entered into to reduce exposure to interest rate risk prior to the issuance of the new long-term debt securities. As of the inception of one of the swap agreements, the company had received payments that were recorded as deferred income to be recognized as an adjustment to interest expense over the term of the new debt securities. As of the date the swaps were terminated, this deferred income totaled $18.7 million. The excess termination fees over the deferred income recorded was deferred and is being recognized as an adjustment to interest expense over the term of the debt securities issued.

Interest on the debentures is payable semiannually on the 15th day of June and December in each year. The company incurred interest expense of $8.0 million, $8.0 million, and $7.9 million, respectively, for the fiscal years ended October 31, 2021, 2020 and 2019.

6.625% Senior Notes

On April 26, 2007, the company issued $125.0 million in aggregate principal amount of 6.625 percent senior notes due May 1, 2037 and priced at 98.513 percent of par value. The resulting discount of $1.9 million is being amortized over the term of the notes using the straight-line method as the results obtained are not materially different from those that would result from the use of the effective interest method. Although the coupon rate of the senior notes is 6.625 percent, the effective interest rate is 6.741 percent after taking into account the issuance discount. The senior notes are unsecured senior obligations of the company and rank equally with the company's other unsecured and unsubordinated indebtedness. The indentures under which the senior notes were issued contain customary covenants and event of default provisions. The company may redeem some or all of the senior notes at any time at the greater of the full principal amount of the senior notes being redeemed or the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the treasury rate plus 30 basis points, plus, in both cases, accrued and unpaid interest. In the event of the occurrence of both (i) a change of control of the company, and (ii) a downgrade of the notes below an investment grade rating by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Services within a specified period, the company would be required to make an offer to purchase the senior notes at a price equal to 101 percent of the principal amount of the senior notes plus accrued and unpaid interest to the date of repurchase.

Interest on the senior notes is payable semiannually on the 1st day of May and November in each year. For each of the fiscal years ended October 31, 2021, 2020, and 2019, the company incurred interest expense of $8.4 million, respectively.