Long-Term Debt and Commitments

12 Months Ended

Dec. 31, 2019

Long-Term Debt and Commitments [Abstract]

Note 15. Long-Term Debt and Commitments

The following is a summary of long-term debt:

	December 31,
(millions of dollars)	2019		2018
Term Loan Facility- Variable Tranche due February 14, 2024, net of unamortized discount and deferred financing costs of $16.0 million and $19.4 million	$	642.0	$	638.6
Term Loan Facility- Fixed Tranche due May 9, 2021, net of unamortized discount and deferred financing costs of $0.2 million and $0.3 million	$	177.8	$	262.6
Netherlands Term Loan due 2020		1.1		3.4
Netherlands Term Loan due 2022		1.0		1.4
Japan Loan Facilities		4.5		5.1
Total	$	826.4	$	911.1
Less: Current maturities		2.1		3.3
Long-term debt	$	824.3	$	907.8

On May 9, 2014, in connection with the acquisition of AMCOL International Corporation (“AMCOL”), the Company entered into a credit agreement providing for a $1,560 million senior secured term loan facility (the “Term Facility”) and a $200 million senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Facilities”).

On June 23, 2015, the Company entered into an amendment (the “First Amendment”) to the credit agreement to reprice the $1.378 billion then outstanding on the Term Facility. As amended, the Term Facility had a $1.078 billion floating rate tranche and a $300 million fixed rate tranche. On February 14, 2017, the Company entered into an amendment (the “Second Amendment”) to the credit agreement to reprice the $788 million floating rate tranche then outstanding, which extended the maturity and lowered the interest costs by 75 basis points. On April 18, 2018, the Company entered into an amendment (the “Third Amendment”) to the credit agreement to refinance the Revolving Facility. As amended, the Revolving Facility has been increased to $300 million in aggregate commitments. Following the amendments, the loans outstanding under the floating rate tranche of the Term Facility will mature on February 14, 2024, the loans outstanding under the fixed rate tranche of the Term Facility will mature on May 9, 2021 and the loans outstanding (if any) and commitments under the Revolving Facility will mature and terminate, as the case may be, on April 18, 2023. Loans under the floating rate tranche of the Term Facility bear interest at a rate equal to an adjusted LIBOR rate (subject to a floor of 0.75%) plus an applicable margin equal to 2.25% per annum. Loans under the fixed rate tranche of the Term Facility bear interest at a rate of 4.75%. Loans under the Revolving Facility bear interest at a rate equal to an adjusted LIBOR rate plus an applicable margin equal to 1.625% per annum. Such rates are subject to decrease by up to 25 basis points in the event that, and for so long as, the Company’s net leverage ratio (as defined in the credit agreement) is less than certain thresholds. The floating rate tranche of the Term Facility was issued at par and the fixed rate tranche of the Term Facility was issued at a 0.25% discount in connection with the First Amendment. The variable rate tranche of the Term Facility was issued at a 0.25% discount in connection with the Second Amendment. The variable rate tranche has a 1% required amortization per year. The Company will pay certain fees under the credit agreement, including customary annual administration fees. The obligations of the Company under the Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the assets of the Company and the Guarantors.

The credit agreement contains certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions. In addition, the credit agreement contains a financial covenant that requires the Company, if on the last day of any fiscal quarter loans or letters of credit were outstanding under the Revolving Facility (excluding up to $15 million of letters of credit), to maintain a maximum net leverage ratio (as defined in the credit agreement) of, initially, 5.25 to 1.00 for the four fiscal quarter period preceding such day. Such maximum net leverage ratio requirement is subject to decrease during the duration of the facility to a minimum level (when applicable) of 3.50 to 1.00. In connection with the Sivomatic acquisition, the Company incurred $113.0 million of short-term debt under the Revolving Facility. As of December 31, 2019, there were $100 million in outstanding loans and $9.7 million in letters of credit outstanding under the Revolving Facility. The Company is in compliance with all the covenants associated with the Revolving Facility as of the end of the period covered by this report.

During 2019, the Company repaid $85 million on its Term Facility.

As part of the Sivomatic acquisition, the Company assumed $10.7 million in long-term debt, recorded at fair value, consisting of two term loans, one of which matures in 2020 and the other of which matures in 2022. These loans carry an interest rate of Euribor plus 2.0% and have quarterly repayments. During 2019, the Company repaid $2.6 million on these loans.

The Company has a committed loan facility in Japan. As of December 31, 2019, there was an outstanding balance of $4.5 million on this facility. Principal will be repaid in accordance with the payment schedules ending in 2021. The Company repaid $0.6 million on this loan in 2019. In 2019, the Company also repaid $2.2 million on committed loan facilities for the funding of new manufacturing facilities in China. As of December 31, 2019, the China facilities were repaid in full.

As of December 31, 2019, the Company had $42.0 million in uncommitted short-term bank credit lines, of which approximately $1.2 million was in use.

Short-term borrowings as of December 31, 2019 and 2018 were $101.2 million and $105.2 million, respectively. The weighted average interest rate on short-term borrowings outstanding as of December 31, 2019 and December 31, 2018 was 3.9% and 4.0%, respectively.

The aggregate maturities of long-term debt are as follows: $2.1 million in 2020; $182.3 million in 2021; $0.2 million in 2022, $— million in 2023; $658.0 million in 2024 and $— million thereafter.

During 2019, 2018 and 2017, respectively, the Company incurred interest costs of $46.0 million, $48.6 million and $45.4 million, including $0.6 million, $0.5 million and $0.2 million, respectively, which were capitalized. Interest paid approximated the incurred interest cost.