6.	Borrowings

Borrowings consist of the following:

December 31,
(dollars in thousands)	Interest Rate	Maturity Date	2019		2018
Borrowings under ABL Facility	floating (2)	December 7, 2022 (1)	$	17,386	$	19,868
Term Loan B	floating (3)	April 9, 2021		375,800		380,200
Total borrowings				393,186		400,068
Less — unamortized discount and finance fees				1,346		2,368
Total borrowings — net				391,840		397,700
Less — long term debt due within one year				16,124		4,400
Total long-term portion of borrowings — net			$	375,716	$	393,300

___________________________

(

)

Maturity date will be

January 9, 2021,

if Term Loan B is

not

refinanced by this date.

(

)

The interest rate on the ABL Facility borrowings was

1.75

percent at

December 31, 2019.

(

)

See interest rate swaps under “Term Loan B” below and note 12.

Annual maturities for all of our total borrowings for the next

five

years and beyond are as follows:

2020		2021		2022		2023		2024		Thereafter
$16,124		$359,676		$17,386		$—		$—		$—

Amended and Restated ABL Credit Agreement

Libbey Glass and Libbey Europe entered into an Amended and Restated Credit Agreement, dated as of

February

2010

and amended as of

April

29,

2011,

May 18, 2012,

April 9, 2014

and

December 7, 2017 (

as amended, the ABL Facility), with a group of

four

financial institutions. The ABL Facility provides for borrowings of up to

$100.0

million, subject to certain borrowing base limitations, reserves and outstanding letters of credit.

All borrowings under the ABL Facility are secured by:

•

first

-priority security interest in substantially all of the existing and future personal property of Libbey Glass and its domestic subsidiaries (ABL Priority Collateral);

•

first

-priority security interest in:

•

100

percent of the stock of Libbey Glass and

100

percent of the stock of substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries;

•

100

percent of the non-voting stock of substantially all of Libbey Glass’s

first

-tier present and future foreign subsidiaries; and

•

percent of the voting stock of substantially all of Libbey Glass’s

first

-tier present and future foreign subsidiaries;

•

first

-priority security interest in substantially all proceeds and products of the property and assets described above; and

•

second

-priority security interest in substantially all of the owned real property, equipment and fixtures in the United States of Libbey Glass and its domestic subsidiaries, subject to certain exceptions and permitted liens (Term Priority Collateral).

Additionally, borrowings by Libbey Europe under the ABL Facility are secured by:

•

first

-priority lien on substantially all of the existing and future real and personal property of Libbey Europe and its Dutch subsidiaries; and

•

first

-priority security interest in:

•

100

percent of the stock of Libbey Europe and

100

percent of the stock of substantially all of the Dutch subsidiaries; and

•

100

percent (or a lesser percentage in certain circumstances) of the outstanding stock issued by the

first

-tier foreign subsidiaries of Libbey Europe and its Dutch subsidiaries.

Swingline borrowings are limited to

$10.0

million, with swingline borrowings for Libbey Europe being limited to the U.S. equivalent of

$5.0

million. Loans comprising each CBFR (CB Floating Rate) Borrowing, including each Swingline Loan, bear interest at the CB Floating Rate plus the Applicable Rate, and euro-denominated swingline borrowings (Eurocurrency Loans) bear interest calculated at the Netherlands swingline rate, as defined in the ABL Facility, subject to a LIBOR floor of

0.0

percent. The Applicable Rates for CBFR Loans and Eurocurrency Loans vary depending on our aggregate remaining availability. The Applicable Rates for CBFR Loans and Eurocurrency Loans were

0.75

percent and

1.75

percent, respectively, at

December

31,

2019.

Libbey pays a quarterly Commitment Fee, as defined by the ABL Facility, on the total credit provided under the ABL Facility. The Commitment Fee was

0.25

percent at

December

31,

2019.

compensating balances are required by the ABL Facility. The ABL Facility does

not

require compliance with a fixed charge coverage ratio covenant, unless aggregate unused availability falls below

$10.0

million. If our aggregate unused ABL availability were to fall below

$10.0

million, the fixed charge coverage ratio requirement would be

1:00

1:00.

Libbey Glass and Libbey Europe have the option to increase the ABL Facility by

$25.0

million. At

December

31,

2019,

Libbey Europe had outstanding borrowings under the ABL Facility of

$17.4

million, and Libbey Glass had

outstanding borrowings. At

December

31,

2018,

Libbey Glass and Libbey Europe had outstanding borrowings under the ABL Facility of

$3.5

million and

$16.4

million, respectively. Interest is payable on the last day of the interest period, which can range from

one

month to

six

months depending on the maturity of each individual borrowing on the ABL facility.

The borrowing base under the ABL Facility is determined by a monthly analysis of the eligible accounts receivable and inventory. The borrowing base is the sum of (a)

percent of eligible accounts receivable and (b) the lesser of (i)

percent of the net orderly liquidation value (NOLV) of eligible inventory, (ii)

percent of eligible inventory, or (iii)

$75.0

million.

The ABL Facility also provides for the issuance of up to

$15.0

million of letters of credit that, when outstanding, are applied against the

$100.0

million limit. At

December

31,

2019,

$10.0

million in letters of credit and other reserves were outstanding. Remaining unused availability under the ABL Facility was

$68.2

million at

December

31,

2019,

compared to

$71.6

million under the ABL Facility at

December

31,

2018.

Term Loan B

April 9, 2014,

Libbey Glass consummated its

$440.0

million Senior Secured Term Loan B of Libbey Glass due

2021

(Term Loan B). The net proceeds of the Term Loan B were

$438.9

million, after the

0.25

percent original issue discount of

$1.1

million. The Term Loan B had related fees of approximately

$6.7

million that will be amortized to interest expense over the life of the loan.

The Term Loan B is evidenced by a Senior Secured Credit Agreement, dated

April 9, 2014 (

Credit Agreement), between Libbey Glass, the Company, the domestic subsidiaries of Libbey Glass listed as guarantors therein (Subsidiary Guarantors and together with the Company, Guarantors), and the lenders. Under the terms of the Credit Agreement, aggregate principal of

$1.1

million is due on the last business day of each quarter. The Term Loan B bears interest at the rate of LIBOR plus

3.0

percent, subject to a LIBOR floor of

0.75

percent. The interest rate was

4.71

percent per year at

December

31,

2019

and

5.39

percent at

December

31,

2018,

and will mature on

April

2021.

Although the Credit Agreement does

not

contain financial covenants, the Credit Agreement contains other covenants that restrict the ability of Libbey Glass and the Guarantors to, among other things:

•

incur, assume or guarantee additional indebtedness;

•

pay dividends, make certain investments or other restricted payments;

•

create liens;

•

enter into affiliate transactions;

•

merge or consolidate, or otherwise dispose of all or substantially all the assets of Libbey Glass and the Guarantors; and

•

transfer or sell assets.

may

voluntarily prepay, in whole or in part, the Term Loan B without premium or penalty but with accrued interest. Beginning with the year-ended

December 31, 2015,

the Credit Agreement requires us to make an annual mandatory prepayment offer to lenders of

0.0

50.0

percent of our excess cash flow, depending on our excess cash flow and leverage ratios as defined in the Credit Agreement. The calculation is made at the end of each year and the mandatory prepayment offer to lenders is made

later than

ten

business days after the filing of our annual compliance certificate to the lenders. The amount of any required mandatory prepayment offer is reduced by the amounts of any optional prepayments we made during the applicable year or prior to the prepayment offer in the year the offer is required to be made. The anticipated payment associated with our

2019

financial results is included in long-term debt due within

one

year on the Consolidated Balance Sheet.

The Credit Agreement provides for customary events of default, including cross default with the ABL Facility. In the case of an event of default as defined in the Credit Agreement, all of the outstanding Term Loan B will become due and payable immediately without further action or notice. The Term Loan B and the related guarantees under the Credit Agreement are secured by (i)

first

priority liens on the Term Priority Collateral and (ii)

second

priority liens on the ABL Collateral.

April 1, 2015

and

September 24, 2018,

we executed interest rate swaps on our Term Loan B as part of our risk management strategy to mitigate the risks involved with fluctuating interest rates. The interest rate swaps effectively convert a portion of our Term Loan B debt from a variable interest rate to a fixed interest rate, thus reducing the impact of interest rate changes on future income. See note 12 for further discussion on the interest rate swaps.

Libbey Mexico Line of Credit

June 17, 2019,

Crisa Libbey Mexico S. de R.L. de C.V. entered into a

$3.0

million working capital line of credit with Banco Santander Mexico to cover seasonal working capital needs, guaranteed by its parent company, Libbey Mexico, S. de R.L. de C.V. The line of credit matures on

December 14, 2020,

and has a floating interest rate of LIBOR plus

3.20

percent. At

December 31, 2019,

there were

borrowings under this line of credit. Interest with respect to borrowings on the line of credit is due monthly.

AICEP Loan

From time to time since

July 2012,

Libbey Portugal has entered into loan agreements with Agencia para Investmento Comercio Externo de Portugal, EPE (AICEP), the Portuguese Agency for investment and external trade. This loan was fully repaid in

July 2018,

and the interest rate was

0.0

percent.

Notes Payable

We have an overdraft line of credit for a maximum of

€0.8

million. At

December

31,

2019

and

2018,

there were

borrowings under the facility, which had an interest rate of

1.50

percent. Interest with respect to the note is paid monthly.