Borrowings and Credit Arrangements

3 Months Ended

Dec. 29, 2018

The Company’s borrowings consisted of the following:


	June 27, 2020		September 28, 2019
Current debt obligations, net of debt discount and deferred issuance costs:
Term Loan	$	65.5	$	37.4
Revolver	500.0		—
Securitization Program	—		234.0

Total current debt obligations	$	565.5	$	271.4
Long-term debt obligations, net of debt discount and deferred issuance costs:
Term Loan	1,398.0		1,452.4

2025 Senior Notes	938.9		937.3
2028 Senior Notes	394.4		393.9
Total long-term debt obligations	$	2,731.3	$	2,783.6
Total debt obligations	$	3,296.8	$	3,055.0

2018 Amended and Restated Credit Agreement

On December 17, 2018, the Company and certain of its subsidiaries refinanced its term loan and revolving credit facility by entering into an Amended and Restated Credit and Guaranty Agreement as of December 17, 2018 (the "2018 Credit Agreement") with Bank of America, N.A. in its capacity as Administrative Agent, Swing Line Lender and L/C Issuer, and certain other lenders. The 2018 Credit Agreement amended and restated the Company's prior credit and guaranty agreement dated as of October 3, 2017 (the "2017 Credit Agreement"). The borrowings of the 2018 Amended Term Loan bear interest at an annual rate equal to the Eurocurrency Rate (i.e., the LIBOR rate) plus an Applicable Rate, which was equal to 1.375% as of June 27, 2020. The borrowings of the 2018 Amended Revolver bear interest at a rate equal to the LIBOR Daily Floating Rate plus an Applicable Rate equal to 1.375%.

Pursuant to ASC 470, Debt (ASC 470), the accounting related to entering into the 2018 Credit Agreement and using the proceeds to pay off the 2017 Credit Agreement was evaluated on a creditor-by-creditor basis to determine whether each transaction should be accounted for as a modification or extinguishment. Certain creditors under the 2017 Credit Agreement did not participate in this refinancing transaction and ceased being creditors of the Company. As a result, the Company recorded a debt extinguishment loss of $0.8 million in the first quarter of fiscal 2019. For the remainder of the creditors, this transaction was accounted for as a modification because on a creditor-by-creditor basis the present value of the cash flows between the two debt instruments before and after the transaction was less than 10%. Pursuant to ASC 470, subtopic 50-40, third-party costs of $0.8 million related to this transaction were recorded as interest expense and $1.9 million was recorded as a reduction to debt representing deferred issuance costs and debt discount for fees paid directly to the lenders.

In response to the market uncertainties created by the COVID-19 pandemic in March 2020, the Company borrowed $750 million under its revolver, $250 million of which was used to pay off amounts outstanding under the asset securitization agreement, in order to have sufficient cash on hand. During the third quarter of fiscal 2020, the Company paid down$250.0 million on its revolver, and it intends to repay the remainder within one year. The Company has $1.0 billion available under its revolver as of June 27, 2020.

Interest expense, weighted average interest rates, and the interest rate at the end of period under the Credit Agreements were as follows:


	Three Months Ended									Nine Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
Interest expense	$	11.4		$	16.4		$	38.0		$	51.9
Weighted average interest rate	1.68		%	3.85		%	2.52		%	3.84		%
Interest rate at end of period	1.55		%	3.78		%	1.55		%	3.78		%

The 2018 Credit Agreement contains two financial covenants; a total leverage ratio and an interest coverage ratio, both of which are measured as of the last day of each fiscal quarter. These terms, and calculations thereof, are defined in further detail in the 2018 Credit Agreement. As of June 27, 2020, the Company was in compliance with these covenants.

Senior Notes

On October 10, 2017, the Company completed a private placement of $350 million aggregate principal amount of its 4.375% Senior Notes due 2025 (the "2025 Senior Notes") at an offering price of 100% of the aggregate principal amount of the 2025 Senior Notes.

On January 19, 2018, the Company completed a private placement of $1.0 billion aggregate principal amount of senior notes, allocated between (i) an additional $600 million aggregate principal amounts of its 2025 Senior Notes pursuant to a supplement to the indenture governing the Company's existing 2025 Senior Notes at an offering price of 100% of the aggregate principal amount of the 2025 Senior Notes and (ii) $400 million aggregate principal amounts of its 4.625% Senior Notes due 2028 (the "2028 Senior Notes") at an offering price of 100% of the aggregate principal amount of the 2028 Senior Notes.

2025 Senior Notes

The total aggregate principal balance of 2025 Senior Notes is $950 million. The 2025 Senior Notes are general senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by certain domestic subsidiaries and mature on October 15, 2025.

2028 Senior Notes

The aggregate principal balance of the 2028 Senior Notes is $400 million. The 2028 Senior Notes are general senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by certain domestic subsidiaries and mature on February 1, 2028.

Interest expense for the 2028 Senior Notes and 2025 Senior Notes is as follows:


			Three Months Ended						Nine Months Ended
			June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	Interest Rate		Interest Expense		Interest Expense		Interest Expense		Interest Expense
2028 Senior Notes	4.625	%	$	4.8	$	4.8	$	14.4	$	14.4
2025 Senior Notes	4.375	%	10.9		10.9		32.7		32.7
Total			$	15.7	$	15.7	$	47.1	$	47.1

Accounts Receivable Securitization Program

In response to the market uncertainties created by the COVID-19 pandemic, on March 26, 2020, the Company paid-off the total amount outstanding of $250.0 million previously borrowed under the Accounts Receivable Securitization Program (the "Securitization Program"). On April 13, 2020, the Company amended the Credit and Security agreement with the lenders, temporarily suspending the ability to borrow and the need to comply with covenants for up to a year. As of June 27, 2020, the Company did not have any borrowings under this program.