5. Borrowing Arrangements


Long-Term Debt	September 30, 2016		December 31, 2015
U.S. Credit Agreement Borrowings	$	96,375	$	107,700
Japanese Credit Agreement Borrowings		5,919		—
Japanese Term Loan Borrowings		—		3,741
Total Long-Term Debt		102,294		111,441
Less Current Portion of Long-Term Debt		(7,500)		(7,500)
Net Long-Term Debt	$	94,794	$	103,941

U.S. Amended Credit Agreement

On October 4, 2016, the Company entered into the First Amended and Restated Credit Agreement (Amended Credit Agreement) which amended the Company’s existing U.S. Credit Agreement (Credit Agreement) described below. The Amended Credit Agreement increases the Company’s total borrowing capacity to $400 million, comprised of a $300 million revolving credit facility (Amended Revolver) and a $100 million term loan facility (Term Loan). The Amended Credit Agreement extends the term of the Amended Revolver to October 4, 2021 and the maturity date of the Term Loan to October 4, 2023.

The Amended Revolver contains a $75 million sublimit for the issuance of letters of credit, and a $15 million sublimit for swing loans. The Company also has the option to increase the Amended Revolver by a maximum of $100 million with the consent of the Lenders. Availability under the Amended Credit Agreement was conditioned upon various customary conditions.

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

The interest rate options under the Amended Revolver and Term Loans are the same as under the Company’s Credit Agreement described below. In addition, the affirmative and negative covenants under the Amended Credit Agreement are also very similar, as are the events of default and the resulting consequences. The Amended Credit Agreement also contains the same dividend restriction, as well as the minimum interest coverage ratio and maximum leverage ratio financial ratio requirements.

The Company borrowed the full $100 million under the Term Loan on October 4, 2016 and repaid all amounts owed under the Credit Agreement. Beginning January 1, 2017, the Company will be required to make quarterly repayments under the Term Loan equal to 1.25% of the outstanding balance until January 1, 2019, at which time the quarterly repayments will increase to 2.0% until the remaining balance is due on the October 4, 2023 maturity date. Refer to Note 15 for further information on subsequent borrowings under the Amended Credit Agreement.

U.S. Credit Agreement

On November 6, 2013, the Company entered into the U.S. Credit Agreement (Credit Agreement) which provided for a senior unsecured revolving credit facility (Revolver) in an amount up to $225.0 million. As a result of amendments, the expiration date of the Revolver was November 6, 2020. A portion of the Revolver not in excess of $75.0 million was available for standby or letters of credit for trade, $15.0 million was available for swing loans, and $50.0 million was available for loans or letters of credit in certain foreign denominated currencies. The Company also had 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 was conditioned upon various customary conditions. In April 2016, an amendment was signed to the Credit Agreement that increased the threshold for a “Permitted Acquisition.” Refer to Note 15 for further information.

The Credit Agreement also provided for senior unsecured delayed draw term loans (Delayed Draw Term Loans) in an aggregate amount up to $75.0 million which were scheduled to expire on November 6, 2020. The full amount of the Delayed Draw Term Loans was outstanding as of December 31, 2015. Beginning January 1, 2016, the Company began making quarterly repayments. As a result, $7.5 million is shown as the current portion of long-term debt within the condensed consolidated balance sheet as equal quarterly repayments were scheduled to continue until the remaining balance was due on the November 6, 2020 expiration date.

Upon entering into the Credit Agreement, the Company incurred issuance costs of $0.8 million which were deferred and were being amortized over the term of the Revolver and Delayed Draw Term Loan facilities. A quarterly nonrefundable commitment fee was payable by the Company based on the unused availability under the Revolver and was equal to 0.18%.

The interest rate on amounts owed under the Revolver and Delayed Draw Term Loans was, at the Company’s option, either (i) a fluctuating Base Rate or (ii) an adjusted LIBOR rate plus in each case, an applicable margin based on the Company’s leverage ratio as set forth in the Credit Agreement. The interest rate charged on amounts owed under swing loans was either (i) a fluctuating Base Rate or (ii) such other interest rates as the lender and the Company may agree to from time to time. The interest rate per annum on outstanding borrowings ranged from 1.77% to 1.93% as of September 30, 2016, and 1.20% to 1.35% as of September 30, 2015.

Total outstanding borrowings under the Revolver were $27.0 million and $32.7 million as of September 30, 2016 and December 31, 2015, respectively. Total availability under the Revolver as of September 30, 2016 and December 31, 2015 was $195.4 million and $189.9 million, respectively, after considering borrowings and the outstanding letters of credit of $2.6 million and $2.4 million as of September 30, 2016 and December 31, 2015, respectively. Total outstanding borrowings under the Delayed Draw Term Loans were $69.4 million and $75.0 million as of September 30, 2016 and December 31, 2015, respectively. There was no remaining availability under the Delayed Draw Term Loans. The outstanding borrowings are shown as current portion of long-term debt and long-term debt within the condensed consolidated balance sheets, and borrowings and repayments are presented on a gross basis within the Company’s condensed consolidated statements of cash flows.

Certain domestic subsidiaries of the Company unconditionally guaranteed all indebtedness and obligations related to borrowings under the Credit Agreement. The Company’s obligations under the Credit Agreement were unsecured.

The Credit Agreement contained customary affirmative and negative covenants for credit facilities of this type. The Company was permitted to pay dividends so long as the sum of availability under the Credit Agreement and the amount of U.S. cash on hand was at least $50.0 million, and debt was less than or equal to 2.75x earnings before interest, taxes, depreciation and amortization. In addition, the Credit Agreement included limitations on the Company and its subsidiaries with respect to indebtedness, additional liens, disposition of assets or subsidiaries, and transactions with affiliates. The Company had to comply with certain financial covenants including a minimum interest coverage ratio and a maximum leverage ratio as defined within the Credit Agreement. The Company was in compliance with all such covenants as of September 30, 2016. The Credit Agreement also provided 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 occurred, the lenders would be 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 become immediately due and payable, and other events of default would allow the agent to declare all or any portion of the outstanding obligations of the Company to be immediately due and payable.

Japanese Credit Agreement

On March 24, 2016, Calgon Carbon Japan (CCJ) entered into a 2.0 billion Japanese Yen unsecured revolving loan facility agreement (Japanese Credit Agreement) which expires on March 24, 2019. The Japanese Credit Agreement replaced the Term Loan Agreement (Japanese Term Loan) and Working Capital Loan (Japanese Working Capital Loan) agreement that CCJ previously had in place which are described below. As of September 30, 2016, CCJ had 600 million Japanese Yen, or $5.9 million outstanding. The outstanding borrowings are shown as long-term debt within the condensed consolidated balance sheets, and borrowings and repayments are presented on a gross basis within the Company’s condensed consolidated statements of cash flows.

A quarterly nonrefundable commitment fee is payable by CCJ based on the unused availability under the Japanese Credit Agreement and is equal to 0.18%. Total availability under the Japanese Credit Agreement was 1.4 billion Japanese Yen as of September 30, 2016. The Japanese Credit Agreement bears interest based on the Tokyo Interbank Offered Rate of interest (TIBOR), plus an applicable margin based on the Company’s leverage ratio as defined in the U.S. Credit Agreement, which averaged 1.31% per annum as of September 30, 2016. The Company is jointly and severally liable as the guarantor of CCJ’s obligations under the Japanese Credit Agreement. CCJ may make voluntary prepayments of principal and interest after providing prior written notice and before the full amount then outstanding is due and payable on the March 24, 2019 expiration date.

Prior Japanese Loans

Prior to March 31, 2016, CCJ maintained a Japanese Term Loan and a Japanese Working Capital Loan. These agreements were terminated on March 31, 2016 and replaced by the Japanese Credit Agreement described above. The Company was 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 amount of the assets available to be pledged was in excess of the outstanding obligation as of December 31, 2015.

The Japanese Term Loan provided for a principal amount of 1.0 billion Japanese Yen and bore interest based on the Uncollateralized Overnight Call Rate plus an applicable margin which averaged 0.7% per annum as of December 31, 2015. This loan was originally scheduled to mature on May 10, 2017. As of December 31, 2015, CCJ had 450 million Japanese Yen or $3.7 million outstanding. The outstanding borrowings were shown as long-term debt within the condensed consolidated balance sheets, and borrowings and repayments were presented on a gross basis within the Company’s condensed consolidated statements of cash flows.

The Japanese Working Capital Loan provided for borrowings up to 1.5 billion Japanese Yen, and bore interest based on the Short-term Prime Rate. This loan was scheduled to mature on March 31, 2016. Borrowings and repayments under the Japanese Working Capital Loan generally occurred in short term intervals, as needed, in order to ensure adequate liquidity while minimizing outstanding borrowings. As of December 31, 2015, CCJ had no outstanding borrowings under this facility.

Chinese Credit Facility

The Company maintained an Uncommitted Revolving Loan Facility Letter (Facility Letter) which provided for an uncommitted line of credit totaling 5.0 million Renminbi (RMB) or $0.8 million. This Facility Letter was scheduled to expire on July 19, 2016, but was canceled in April 2016. The Company was jointly and severally liable as the guarantor under the Facility Letter. There were no outstanding borrowings under this facility as of December 31, 2015.

Belgian Credit Facility

The Company 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 either September 30, 2016 or December 31, 2015. Bank guarantees of 1.1 million Euros and 0.9 million Euros were issued as of September 30, 2016 and December 31, 2015, 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 both September 30, 2016 and December 31, 2015.