5. Borrowing Arrangements


	June 30, 2017		December 31, 2016
U.S. Credit Agreement borrowings	$	244,140	$	225,000
Japanese Credit Agreement borrowings		2,227		—
Total long-term debt		246,367		225,000
Less current portion of long-term debt		(5,000)		(5,000)
Net long-term debt	$	241,367	$	220,000

U.S. Credit Agreement

On October 4, 2016, the Company entered into the First Amended and Restated Credit Agreement (Credit Agreement) which provides for total borrowing capacity of $400 million, comprised of a $300 million revolving credit facility (Revolver) that expires on October 4, 2021 and a $100 million term loan facility (Term Loan) that expires on October 4, 2023.

The Revolver contains a $75 million sublimit for the issuance of letters of credit, and a $15 million sublimit for swing loans. The Company has the option to increase the Revolver by a maximum of $100 million with the consent of the Lenders. Availability under the Credit Agreement was conditioned upon various customary conditions. Upon entering into the Credit Agreement, the Company incurred issuance costs of $0.8 million, of which approximately $0.1 million was expensed. The remainder of the issuance costs were deferred, and along with other previously deferred costs, are being amortized over the terms of the Revolver and Term Loan facilities. A quarterly nonrefundable commitment fee is payable by the Company based on the unused availability under the Revolver and was equal to 0.25% as of June 30, 2017.

The Company borrowed the full $100 million under the Term Loan on October 4, 2016. During the fourth quarter of 2016, the Company borrowed $160 million under the Revolver to finance the acquisition of the New Business. Required quarterly repayments under the Term Loan began January 1, 2017, and are 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. As a result, $5.0 million is shown as the current portion of long-term debt within the condensed consolidated balance sheets as of both June 30, 2017 and December 31, 2016.

The interest rate on amounts owed under the Credit Agreement will be, 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 will be 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 3.06% to 3.31% as of June 30, 2017, and 1.70% to 1.86% as of June 30, 2016.

Total outstanding borrowings under the Revolver were $146.6 million and $125.0 million as of June 30, 2017 and December 31, 2016, respectively. Total availability under the Revolver as of June 30, 2017 and December 31, 2016 was $150.9 million and $172.5 million, respectively, after considering borrowings and the outstanding letters of credit of $2.5 million as of both June 30, 2017 and December 31, 2016. Total outstanding borrowings under the Term Loan were $97.5 million and $100.0 million as of June 30, 2017 and December 31, 2016, respectively. There is no remaining availability under the Term Loan. 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 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. As a result of an amendment signed in February 2017, the Company is permitted to pay annual dividends of up to $14 million, so long as the sum of availability under the Credit Agreement and the amount of U.S. cash on hand is at least $50 million. 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 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 June 30, 2017. 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 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. As of June 30, 2017, CCJ had 250 million Japanese Yen, or $2.2 million outstanding, while no amounts were outstanding as of December 31, 2016. 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 was equal to 0.23% as of June 30, 2017. Total availability under the Japanese Credit Agreement was 1.75 billion Japanese Yen or $15.6 million as of June 30, 2017, while the availability was 2.0 billion Japanese Yen, or $17.1 million as of December 31, 2016. The Japanese Credit Agreement bears interest based on the Tokyo Interbank Offered Rate of interest, plus an applicable margin based on the Company’s leverage ratio as defined in the U.S. Credit Agreement, which averaged 1.80% per annum as of June 30, 2017. 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.

Other Credit Facilities

The Company also maintains smaller credit facilities denominated in the local currencies of the various countries in which it operates. These facilities totaled approximately $6 million as of June 30, 2017 and December 31, 2016. There are no financial covenants related to these facilities and the Company had no outstanding borrowings under them as of either June 30, 2017 or December 31, 2016. Bank guarantees totaling $4.1 million and $3.5 million were issued as of June 30, 2017 and December 31, 2016, respectively. In addition, the Company had surety bonds outstanding of $1.1 million as of both June 30, 2017 and December 31, 2016.