NOTE 5 - DEBT

Debt consists of the following:

	January 27, 2019			October 28, 2018


3.25% convertible senior notes due in April 2019	$	57,482		$	57,453
Project Loan due in December 2025		14,824			-
Working Capital Loan due in January 2022		10,105			-
Short term debt due in February 2019		3,720

		86,131			57,453
Current portion		(61,647	)		(57,453	)

	$	24,484		$	-

In January 2015, we privately exchanged $57.5 million in aggregate principal amount of our 3.25% convertible senior notes with a maturity date of April 1, 2016, for new 3.25% convertible senior notes with an aggregate principal amount of $57.5 million with a maturity date of April 1, 2019. The conversion rate of the new notes is the same as that of the exchanged notes, which were issued in March 2011 with a conversion rate of approximately 96 shares of common stock per $1,000 note principal, equivalent to a conversion price of $10.37 per share of common stock, and is subject to adjustment upon the occurrence of certain events, which are described in the indenture dated January 22, 2015. Note holders may convert each $1,000 principal amount of notes at any time prior to the close of business on the second scheduled trading day immediately preceding April 1, 2019, and we are not required to redeem the notes other than upon conversion prior to their maturity date. Interest on the notes accrues in arrears, and is paid semiannually through the notes’ maturity date.

In November 2018, Xiamen American Japan Photronics Mask Co., Ltd. (“PDMCX”), an indirect majority owned joint venture subsidiary of Photronics, Inc., was approved for credit of $50 million, subject to certain limitations related to PDMCX registered capital at the time of borrowing, pursuant to which PDMCX will enter into separate loan agreements (“the Project Loans”) for each borrowing . The Project Loans, which are denominated in renminbi, are being used to finance certain capital expenditures in China. PDMCX has agreed to grant a lien on the land, building and certain equipment owned by PDMCX as collateral for the Project Loans. As of January 27, 2019, PDMCX had borrowed $14.8 million against this approval. This borrowing will be repaid in semiannual installments, which will commence in June 2020 and end in December 2022. In February 2019, PDMCX borrowed an additional $11.4 million, which will be repaid semiannually; repayments will commence in June 2023 and end in December 2025. The interest rates on the Project Loans are based on the benchmark lending rate of the People’s Bank of China (4.9% at January 27, 2019). Interest incurred on these loans will be reimbursed through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provide for such reimbursements up to a prescribed limit.

In November 2018, PDMCX was approved for credit of $25.0 million, subject to certain limitations related to PDMCX registered capital at the time of borrowing, pursuant to which PDMCX may enter into separate loan agreements. No guarantees are required as part of this approval. As of January 27, 2019, PDMCX had borrowed $13.8 million against this approval of which $3.7 million were 90-day loans. The remaining $10.1 million borrowed (the “Working Capital Loans”) is to be repaid semiannually from the dates of the individual borrowings, with repayments commencing in May 2019 and ending in January 2022. The 90-day loans were repaid in our second quarter of 2019. These loans, which are denominated in renminbi and U.S. dollars are being used for general financing purposes, including payments of import and value added taxes. The interest rates on the 90-day loans were the market rate on the date of issuance (4.9%), and interest rates on the Working Capital Loans are approximately 5%, and are based on the RMB Loan Prime Rate of the National Interbank Funding Center, plus a spread of 67.75 basis points. Interest incurred on the loans will be reimbursed through incentives provided by the Xiamen Torch Hi-Tech Industrial Development Zone, which provide for such reimbursements up to a prescribed limit.

In September 2018, we entered into an amended and restated credit agreement (“the new agreement”) that expires in September 2023. The new agreement, which replaced our prior credit facility, has a $50 million borrowing limit, with an expansion capacity to $100 million, and is secured by substantially all of our assets located in the United States and common stock we own in certain of our foreign subsidiaries. The new agreement limits the amount we can pay in cash dividends on Photronics, Inc. stock, and contains the following financial covenants: minimum interest coverage ratio, total leverage ratio and minimum unrestricted cash balance, all of which we were in compliance with at January 27, 2019. We had no outstanding borrowings against the new agreement at January 27, 2019, and $50 million was available for borrowing. The interest rate on the new agreement (2.5% at January 27, 2019) is based on our total leverage ratio at LIBOR plus a spread, as defined in the credit facility.