7. Borrowing Arrangements

Short-Term Debt

	December 31
(Dollars in thousands)	2013		2012
Borrowings under Japanese Working Capital Loan	$	1,900	$	18,611
Borrowings under Japanese Term Loan	—		954
Borrowings under China Credit Facility	272		—
Total	$	2,172	$	19,565

Long-Term Debt

	December 31
(Dollars in thousands)	2013		2012
U.S. Credit Facility Borrowings	$	26,250	$	44,250
Borrowings under Japanese Term Loan	5,699		—
Belgian Loan Borrowings	165		158
Total	$	32,114	$	44,408

Credit Agreement

On November 6, 2013, the Company entered into a new U.S. Credit Agreement (Credit Agreement). The Credit Agreement replaces the Company’s Prior U.S. Credit Facility (Prior Credit Facility). The Credit Agreement provides for a senior unsecured revolving credit facility (Revolver) in an amount up to $225.0 million which expires on November 6, 2018. The Company may request that the Revolver be extended for up to two additional one-year periods. A portion of the Revolver not in excess of $75.0 million shall be available for standby or letters of credit for trade, $15.0 million shall be available for swing loans, and $50.0 million shall be available for loans or letters of credit in certain foreign denominated currencies. The Company may have the option to increase the Revolver in an amount not to exceed $75.0 million with the consent of the Lenders. Availability under the Revolver is conditioned upon various customary conditions. Total availability under the Revolver at December 31, 2013 was $196.6 million after considering outstanding letters of credit and borrowings.

The Credit Agreement also provides for senior unsecured delayed draw term loans (Delayed Draw Term Loans) in an aggregate amount up to $75.0 million which expires on November 6, 2020. The Delayed Draw Term Loans are available for two years from the Closing Date. The Company may only request a maximum of three Delayed Draw Term Loans with a minimum borrowing of $15.0 million and no amount repaid may be re-borrowed. Total availability under the Delayed Draw Term Loan at December 31, 2013 was $75.0 million.

A quarterly nonrefundable commitment fee is payable by the Company based on the unused availability under the Revolver and the undrawn portion of the Delayed Draw Term Loans and is currently equal to 0.15%.

The interest rate on amounts owed under the Revolver and Delayed Draw Term Loans will be, at the Company’s option, either (i) a fluctuating Base Rate based on the highest of (A) the prime rate announced from time to time by the Agent, (B) the daily federal funds open rate plus 0.50% and (C) a daily LIBOR rate plus 1.00%, (ii) a rate based on the published rated offered by leading banks in the London interbank deposit market (or other foreign country for non-Euro or U.S. denominated currencies) divided by a number equal to 1.00 minus the applicable LIBOR Reserve Percentage comparable borrowings and reserve requirements prescribed by the Board of Governors of the Federal Reserve System of the United States, in each case, plus an applicable margin based on the Company’s leverage ratio as set forth in the Credit Agreement. The interest rate per annum on outstanding borrowings as of December 31, 2013 ranged from 1.17% to 3.25%.

The Company incurred issuance costs of $0.7 million for the Credit Agreement which were deferred and are being amortized over the term of the Revolver and Delayed Draw Term Loan facilities.

Total outstanding borrowings under the Revolver were $26.3 million at December 31, 2013 and are shown as long-term debt within the consolidated balance sheet. There were no outstanding borrowings under the Delayed Draw Term Loan at December 31, 2013. The borrowings and repayments are presented on a gross basis within the Company’s consolidated statement of cash flows.

Certain of the Company’s Domestic Subsidiaries unconditionally guarantee all indebtedness and obligations related to borrowings under the Credit Agreement. The Company’s obligations under the Credit Agreement are unsecured.

The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type. The Company is permitted to pay dividends so long as there remains $50.0 million of availability under the Credit Agreement and debt is less than or equal to 2.75x earnings before interest, taxes, depreciation and amortization. In addition, the Credit Agreement includes limitations on the Company and its subsidiaries with respect to indebtedness, additional liens, disposition of assets or subsidiaries, and transactions with affiliates. The Company must comply with certain financial covenants including minimum interest coverage ratio and maximum leverage ratio as defined within the Credit Agreement. The Credit Agreement also provides for customary events of default, including failure to pay principal or interest when due, breach of representations and warranties, certain insolvency or receivership events affecting the Company and its subsidiaries and a change in control of the Company. If an event of default occurs, the Lenders will be under no further obligations to make loans or issue Letters of Credit. Upon the occurrence of certain events of default, all outstanding obligations of the Company automatically will become immediately due and payable, and other events of default will allow the Agent to declare all or any portion of the outstanding obligations of the Company to be immediately due and payable.

Prior Credit Facility

The Company’s Prior Credit Facility was terminated on November 6, 2013 and as a result, approximately $0.1 million of the previously deferred issuance costs were written off. The Prior Credit Facility was due to expire on May 8, 2014 and contained a revolving credit capacity of $125.0 million.

Availability under the Prior Credit Facility was dependent upon various customary conditions. A quarterly nonrefundable commitment fee was payable by the Company based on the unused availability under the Amended Credit Agreement and was equal to 0.25%. Total availability under the Prior Credit Facility at December 31, 2012 was $122.8 million after considering outstanding letters of credit and borrowings.

The interest rate on amounts owed under the Prior Credit Facility were, at the Company’s option, either (i) a fluctuating base rate based on the highest of (A) the prime rate announced from time to time by the lenders, (B) the rate announced by the Federal Reserve Bank of New York on that day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day plus 3.00% or (C) a daily LIBOR rate plus 2.75%, or (ii) LIBOR-based borrowings in one, two, three, or six month increments at the applicable LIBOR rate plus 1.25%. A margin could have been added to the applicable interest rate based on the Company’s leverage ratio. The interest rate per annum on outstanding borrowings as of December 31, 2012 ranged from 1.25% to 1.50%.

Total outstanding borrowings under the Prior Credit Facility were $44.3 million at December 31, 2012 and are shown as long-term debt within the consolidated balance sheet. The borrowings and repayments are presented on a gross basis within the Company’s consolidated statement of cash flows.

The Prior Credit Facility contained customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to indebtedness, liens, guaranties, loans and investments, dividends, mergers and acquisitions, dispositions of assets and transactions with affiliates. The Company had to comply with certain financial covenants including a minimum interest coverage ratio, maximum leverage ratio, and minimum net worth, as defined within the Prior Credit Facility. The Prior Credit Facility also provided for customary events of default, including failure to pay principal or interest when due, failure to comply with covenants, the fact that any representation or warranty made by the Company was false or misleading in any material respect, certain insolvency or receivership events affecting the Company and its subsidiaries and a change in control of the Company. If an event of default occurred, the lenders were under no further obligation to make loans or issue letters of credit. Upon the occurrence of certain events of default, all outstanding obligations of the Company automatically would have become immediately due and payable, and other events of default would allow the lenders to declare all or any portion of the outstanding obligations of the Company to be immediately due and payable.

Belgian Loan and Credit Facility

On November 30, 2009, the Company entered into a Loan Agreement (the Belgian Loan) in order to help finance the expansion of the Company’s Feluy, Belgium facility. The Belgian Loan provided total borrowings up to 6.0 million Euros, which could be drawn on in 120 thousand Euro bond installments at 25% of the total amount invested in the expansion until December 31, 2011. Bond options not called by December 31, 2011 were obsolete and the loan was limited to the amount actually called by that date. The maturity date is seven years from the date of the first draw down which occurred on April 13, 2011 and the interest rate is 5.35%. The Belgian Loan is guaranteed by a mortgage mandate on the Feluy site and is subject to customary reporting requirements, though no financial covenants exist. The Company had 120 thousand Euros, or $0.2 million, of outstanding borrowings under the Belgian Loan as of December 31, 2013 and December 31, 2012, respectively. No further bonds can be called on.

The Company also maintains an unsecured Belgian credit facility totaling 2.0 million Euros. There are no financial covenants and the Company had no outstanding borrowings under the Belgian credit facility as of December 31, 2013 and 2012. Bank guarantees of 1.0 million Euros and 1.2 million Euros were issued as of December 31, 2013 and December 31, 2012, respectively.

United Kingdom Credit Facility

The Company maintains a United Kingdom credit facility for the issuance of various letters of credit and guarantees totaling 0.6 million British Pounds Sterling. Bank guarantees of 0.4 million British Pounds Sterling were issued as of December 31, 2013 and 2012, respectively.

Japanese Loans

Calgon Carbon Japan (CCJ) maintains a Term Loan Agreement (the Japanese Term Loan) and a Working Capital Loan Agreement (the Japanese Working Capital Loan). The Company is jointly and severally liable as the guarantor of CCJ’s obligations and the Company permitted CCJ to grant a security interest and continuing lien in certain of its assets, including inventory and accounts receivable, to secure its obligations under both loan agreements.

The Japanese Term Loan provided for a principal amount of 722.0 million Japanese Yen, or $7.7 million at inception. This loan matured on March 31, 2013 and was repaid. CCJ signed an agreement on May 10, 2013 to renew the Japanese Term Loan, which provides for borrowings up to 1.0 billion Japanese Yen, and bears interest based on the Uncollateralized Overnight Call Rate plus 0.6%, which totaled 0.7% per annum at December 31, 2013. This loan matures on May 10, 2017. The borrowings and repayments are presented on a gross basis within the Company’s consolidated statements of cash flows. At December 31, 2013, CCJ had 600 million Japanese Yen or $5.7 million outstanding and recorded as long-term debt within the consolidated balance sheet. At December 31, 2012, CCJ had 82.0 million Japanese Yen or $1.0 million outstanding and recorded as short-term debt within the consolidated balance sheet.

The Japanese Working Capital Loan provides for borrowings up to 1.5 billion Japanese Yen, and bears interest based on the Short-term Prime Rate, which was 1.475% per annum at December 31, 2013. This loan matured on March 31, 2013 and was renewed until March 31, 2014. Borrowings and repayments under the Japanese Working Capital Loan have generally occurred in short term intervals, as needed, in order to ensure adequate liquidity while minimizing outstanding borrowings. The borrowings and repayments are presented on a gross basis within the Company’s consolidated statements of cash flows. At December 31, 2013, CCJ had 200 million Japanese Yen or $1.9 million outstanding and recorded as short-term debt within the consolidated balance sheet. At December 31, 2012, CCJ had 1.6 billion Japanese Yen or $18.6 million outstanding and recorded as short-term debt within the consolidated balance sheet.

Chinese Credit Facility

The Company maintains an unsecured Chinese credit facility for working capital requirements totaling 10.0 million Renminbi (RMB) or $1.6 million that matures on July 19, 2014. The interest rate per annum on outstanding borrowings as of December 31, 2013 was 5.32%. Total outstanding borrowings under this facility were 1.7 million RMB or $0.3 million at December 31, 2013 and are shown as short-term debt within the consolidated balance sheet. There were no borrowings under this facility at December 31, 2012.

Maturities of Debt

The Company intends to make principal payments on debt outstanding at December 31, 2013 of $2.2 million in 2014, $5.7 million in 2017, and $26.4 million in 2018.

Interest Expense

The Company’s interest expense for the years ended December 31, 2013, 2012, and 2011 totaled $0.5 million, $0.1 million, and zero, respectively. These amounts are net of interest costs capitalized of $0.4 million, $0.7 million, and $1.0 million for the years ended December 31, 2013, 2012, and 2011, respectively.