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Subsequent Event
9 Months Ended
Sep. 30, 2011
Subsequent Event [Abstract] 
Subsequent Event

19. SUBSEQUENT EVENT

 

On October 11, 2011, the Company entered into the Fourth Amended and Restated Credit Agreement with a syndicate of ten banks (2011 Senior Credit Agreement).   The 2011 Senior Credit Agreement amends and restates the 2009 Senior Credit Agreement as identified in Notes 8 and 9 of the consolidated financial statements.

 

The 2011 Senior Credit Agreement provides for a revolving credit facility and letters of credit not to exceed the lesser of (i) $200 million and (ii) a borrowing base determined by reference to the trade receivables, inventories, and property, plant, and equipment of the Company's significant domestic subsidiaries. The Company can request additional financing from the banks to increase the revolving credit facility to $250 million under the terms of the 2011 Senior Credit Agreement. The Company also has the opportunity to enter into a term loan in the principal amount of $35 million subject to conditions set forth in the 2011 Senior Credit Agreement.

 

The terms of the 2011 Senior Credit Agreement provide that the revolving credit facility will terminate on the earlier of October 10, 2016 or six months prior to the maturity date of the Company's 8% Notes, which are due December 1, 2015. All revolving credit borrowings must be repaid on or before the maturity date. The term loan would be payable in quarterly installments and mature three years after the term loan funding date on which date the outstanding balance of the term loan is payable in full.

 

Only one financial covenant is contained within the 2011 Senior Credit Agreement, which requires the Company to maintain a fixed charge ratio (as defined in the agreement) of 1.25 to 1.00 or higher.  Interest rates on the revolving credit facility and term loan will continue to be based on the London Interbank Offering Rate (LIBOR) plus an additional margin of 200 to 250 basis points on the revolving credit facility and 300 to 350 basis points on the term loan.  In addition, the revolving credit facility is subject to an annual commitment fee calculated at 0.375% of the daily average undrawn balance of the revolving credit facility.