Financing Arrangements

Long-term debt consists of the following:



				Carrying Value at
	Maturity Date	Interest Rate at December 31, 2017		December 31, 2017			December 31, 2016
				(In millions)
Senior Notes due 2027	April 15, 2027	6.625	%	$	350.0		$	—
Senior Notes due 2021	April 1, 2021	8.125	%	—			250.0
Revolving credit facility	April 17, 2022	3.30	%	124.7			132.8
Term loan				—			23.4
Industrial Equipment Group European Facilities	December 21, 2021	3.25	%	27.0			26.4
Capital leases	Various	Various		20.3			18.8
Other	Various	Various		19.9			23.6
Gross debt				541.9			475.0
Less: current portion of long-term debt				(15.4		)	(25.8		)
Less: short-term debt				(2.3		)	(5.0		)
Less: unamortized debt issuance costs				(8.7		)	(5.2		)
Total long-term debt, net				$	515.5		$	439.0

On April 17, 2017, Park-Ohio Industries, Inc. (“Park-Ohio”), the operating subsidiary of Park-Ohio Holdings Corp., completed the issuance, in a private placement, of $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “Notes”). Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, and the Notes mature on April 15, 2027. The Notes are unsecured senior obligations of Park-Ohio and are guaranteed on an unsecured senior basis by the 100% owned material domestic subsidiaries of Park-Ohio. Proceeds from the Notes issuance were used to repay in full the previously-outstanding 8.125% Senior Notes due 2021 in the aggregate principal amount of $250.0 million, the term loan and a portion of the borrowings outstanding under the revolving credit facility.

The Notes are general unsecured senior obligations of the Company and are fully and unconditionally guaranteed on a joint and several basis by all material 100% owned domestic subsidiaries of the Company. Provisions of the indenture governing the Senior Notes and the Credit Agreement contain restrictions on the Company’s ability to incur additional indebtedness, to create liens or other encumbrances, to make certain payments, investments, loans and guarantees and to sell or otherwise dispose of a substantial portion of assets or to merge or consolidate with an unaffiliated entity. At December 31, 2017, the Company was in compliance with all financial covenants of the Credit Agreement.

On April 17, 2017, Park-Ohio also entered into a seventh amended and restated credit agreement (the “Amended Credit Agreement”) with a group of banks to increase the revolving credit facility to $350.0 million and extend the maturity date of borrowings under the facility to April 17, 2022. Furthermore, Park-Ohio has the option, pursuant to the Amended Credit Agreement, to increase the availability under the revolving credit facility by an aggregate incremental amount up to $100.0 million. As of December 31, 2017, $112.7 million was borrowed on the U.S. portion of the facility; $12.0 million of an available $25.0 million was borrowed on the European sub-limit portion of the facility; and the Company had approximately $194.2 million of unused borrowing capacity under the revolving credit facility. None of the available $35.0 million of the Canadian sub-limit has been borrowed as of December 31, 2017.

In connection with the April 2017 repurchase of Senior Notes due 2021 and amendment of our credit agreement, we recorded an $11.0 million loss on extinguishment of debt, representing premiums paid on early extinguishment of $8.0 million, the write-off of unamortized prior debt issuance costs of $2.5 million, and related fees and expenses of $0.5 million.

On December 21, 2016, the Company, through its subsidiary, IEGE Industrial Equipment Holding Company Limited, entered into a financing agreement with Banco Bilbao Vizcaya Argentaria, S.A. The financing agreement provides the Company a loan up to $27.0 million as of December 31, 2017, as well as a revolving credit facility for up to $12.1 million to fund working capital and general corporate needs. The full $27.0 million loan is outstanding as of December 31, 2017. No amounts have been drawn on the revolving credit facility as of December 31, 2017.

On October 21, 2015, the Company, through its subsidiary, Southwest Steel Processing LLC, entered into a financing agreement with the Arkansas Development Finance Authority. The agreement provides the Company the ability to borrow up to $11.0 million for expansion of its manufacturing facility in Arkansas. The loan matures in September 2025. The Company has borrowed $5.3 million under this agreement as of December 31, 2017.

On August 13, 2015, the Company entered into a capital lease agreement (the “Lease Agreement”). The Lease Agreement provides the Company up to $50.0 million for capital leases. Capital lease obligations of $20.3 million were borrowed under the Lease Agreement as of December 31, 2017 to acquire machinery and equipment. See Note 10 for additional disclosure.

The following table represents fair value information of the Notes, classified as Level 1, at December 31, 2017 and 2016. The fair value was estimated using quoted market prices.



	December 31, 2017
	(In millions)
Carrying amount	$	350.0
Fair value	$	380.6

Maturities of short-term and long-term debt, excluding capital leases, during each of the five years subsequent to December 31, 2017 are as follows:



	(In millions)
2018	$	8.6
2019	$	9.8
2020	$	9.5
2021	$	15.3
2022	$	125.9

Foreign subsidiaries of the Company had $40.2 million of borrowings at December 31, 2017 and $42.4 million at December 31, 2016, and outstanding bank guarantees of approximately $15.1 million at December 31, 2017 and 2016 under their credit arrangements.

The weighted average interest rate on all debt was 6.11% at December 31, 2017 and 6.10% at December 31, 2016.