Debt

The following table presents the Company's outstanding debt at December 28, 2013 and December 29, 2012:



In thousands	December 28, 2013		December 29, 2012
Senior Secured Notes	$	560,000	$	560,000
ABL Facility	—		—
Term Loans	293,545		—
Argentina credit facilities:
Argentina Credit Facility — Nacion	8,341		11,674
Argentina Credit Facility — Galicia	3,082		—
China credit facilities:
China Credit Facility — Healthcare	—		15,981
China Credit Facility — Hygiene	24,920		10,977
India Loans	3,216		—
Capital lease obligations	1,092		244
Total long-term debt	894,196		598,876
Short-term borrowings	2,472		813
Total debt	$	896,668	$	599,689

The fair value of the Company's long-term debt was $933.8 million at December 28, 2013 and $640.0 million at December 29, 2012. The fair value of long-term debt is based upon quoted market prices in inactive markets or on available rates for debt with similar terms and maturities (Level 2).

At December 28, 2013, long-term debt maturities are as follows:



In thousands	Amount
2014	$	13,917
2015	28,147
2016	7,135
2017	3,469
2018	283,269
2019 and thereafter	560,000
Total	$	895,937

Senior Secured Notes

In connection with the Merger, the Company issued $560.0 million of 7.75% Senior Secured Notes on January 28, 2011. The notes are due in 2019 and are fully and unconditionally guaranteed, jointly and severally on a senior secured basis, by each of the Polymer Group's wholly-owned domestic subsidiaries. Interest on the notes is paid semi-annually on February 1 and August 1 of each year.

The indenture governing the Senior Secured Notes, among other restrictions, limits the Company's ability and the ability of the Company's restricted subsidiaries to: (i) incur or guarantee additional debt or issue disqualified stock or preferred stock; (ii) pay dividends and make other distributions on, or redeem or repurchase, capital stock; (iii) make certain investments; (iv) repurchase stock; (v); incur certain liens; (vi) enter into transactions with affiliates; (vii) merge or consolidate; (viii) enter into agreements that restrict the ability of subsidiaries to make dividends or other payments to Polymer Group, Inc.; (ix) designate restricted subsidiaries as unrestricted subsidiaries; and (x) transfer or sell assets. However, subject to certain exceptions, the indenture permits the Company and its restricted subsidiaries to incur additional indebtedness, including senior indebtedness and secured indebtedness. The indenture also does not limit the amount of additional indebtedness that Parent or its parent entities may incur.

Under the indenture governing the Senior Secured Notes and under the credit agreement governing the senior secured asset-based revolving credit facility, the Company's ability to engage in activities such as incurring additional indebtedness, making investments, refinancing certain indebtedness, paying dividends and entering into certain merger transactions is governed, in part, by the Company's ability to satisfy tests based on Adjusted EBITDA as defined in the indenture.

ABL Facility

On October 5, 2012, the Company entered into a senior secured asset-based revolving credit facility (the "ABL Facility") to provide for borrowings not to exceed $50.0 million, subject to borrowing base availability. The ABL Facility provides borrowing capacity available for letters of credit and borrowings on a same-day basis and is comprised of (i) a revolving tranche of up to $42.5 million (“Tranche 1”) and (ii) a first-in, last out revolving tranche of up to $7.5 million (“Tranche 2”). Provided that no default or event of default was then existing or would arise therefrom, the Company had the option to request that the ABL Facility be increased by an amount not to exceed $20.0 million, subject to certain rights of the administrative agent, swing line lender and issuing banks with respect to the lenders providing commitments for such increase. The facility was set to expire on January 28, 2015.

On November 26, 2013, the Company entered into an amendment to the ABL Facility which increased the Tranche 1 revolving commitments in total by $30.0 million, extended the maturity date to October 5, 2016 as well as made certain other changes to the agreement. In addition, the Company maintained the option to request that the ABL Facility be increased subject to certain rights of the administrative agent, swing line lender and issuing banks with respect to the lenders providing commitments for such increase. However, the option was amended to be an amount not to exceed $80.0 million. The effectiveness of the amendment was subject to the satisfaction of certain specified closing conditions by no later than January 30, 2014, all of which were satisfied prior to the required deadline.

Based on current borrowing base availability, the borrowings under the ABL Facility will bear interest at a rate per annum equal to, at our option, either (A) Adjusted London Interbank Offered Rate (“LIBOR”) (adjusted for statutory reserve requirements) plus (i) 2.00% in the case of Tranche 1 or (ii) 4.00% in the case of Tranche 2; or (B) the higher of (a) the administrative agent's Prime Rate and (b) the federal funds effective rate plus 0.5% (“ABR”) plus (x) 1.00% in the case of Tranche 1 or (y) 3.00% in the case of the Tranche 2. As of December 28, 2013, the Company had no outstanding borrowings under the ABL Facility. The borrowing base availability was $48.5 million based on initial advanced rate formulas prior to the completion of the field exam. Outstanding letters of credit in the aggregate amount of $11.0 million left $37.5 million available for additional borrowings. The aforementioned letters of credit were primarily provided to certain administrative service providers and financial institutions. None of these letters of credit had been drawn on as of December 28, 2013. The field exam was completed in February 2014. As a result, proforma availability as of December 28, 2013 would have increased to $58.5 million.

The ABL Facility contains certain customary representations and warranties, affirmative covenants and events of default, including among other things payment defaults, breach of representations and warranties, covenant defaults, cross-defaults and cross acceleration to certain indebtedness, bankruptcy and insolvency defaults, certain events under ERISA, certain monetary judgment defaults, invalidity of guarantees or security interests, and change of control. If such an event of default occurs, the lenders under the ABL Facility would be entitled to take various actions, including the acceleration of amounts due under the ABL Facility and all actions permitted to be taken by a secured creditor.

Term Loans

On December 19, 2013, the Company entered into a Senior Secured Credit Agreement (the "Term Loans") with a maturity date upon the earlier of (i) six years from the date of borrowing and (ii) the 91st day prior to the scheduled maturity of our 7.75% Senior Secured Notes. The Term Loans provides for a commitment by the lenders to make secured term loans in an aggregate amount not to exceed $295.0 million, the proceeds of which were used to partially repay amounts outstanding under the Secured Bridge Facility and the Unsecured Bridge Facility.

Borrowings bear interest at a fluctuating rate per annum equal to, at our option, (i) a base rate equal to the highest of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Citicorp North America, Inc. as its "prime rate" and (c) the LIBOR rate for a one-month interest period plus 1.0% (provided that in no event shall such base rate with respect to the Term Loans be less than 2.0% per annum), in each case plus an applicable margin of 3.25% or (ii) a LIBOR rate for the applicable interest period (provided that in no event shall such LIBOR rate with respect to the Term Loans be less than 1.0% per annum) plus an applicable margin of 4.25%. The applicable margin for the Term Loans is subject to a 25 basis point step-down upon the achievement of certain a senior secured net leverage ratio. The Company is required to repay installments on the Term Loans in quarterly installments in aggregate amounts equal to 1.0% per annum of their funded total principal amount, with the remaining amount payable on the maturity date.

The agreement governing the Term Loans, among other restrictions, limit our ability and the ability of our restricted subsidiaries to: (i) incur or guarantee additional debt or issue disqualified stock or preferred stock; (ii) pay dividends and make other distributions on, or redeem or repurchase, capital stock; (iii) make certain investments; (iv) repurchase stock; (v) incur certain liens; (vi) enter into transactions with affiliates; (vii) merge or consolidate; (viii) enter into agreements that restrict the ability of subsidiaries to make dividends or other payments to Polymer; (ix) designate restricted subsidiaries as unrestricted subsidiaries; and (x) transfer or sell assets. In addition, the Term Loans contain certain customary representations and warranties, affirmative covenants and events of default.

Secured Bridge Facility

On September 17, 2013, and subsequently amended on November 27, 2013, the Company entered into a Senior Secured Bridge Credit Agreement (the "Secured Bridge Facility") with a final maturity date of February 1, 2019. The Secured Bridge Facility provided for a commitment by the lenders to make secured bridge loans in an aggregate amount not to exceed $268.0 million, the proceeds of which were used to partially fund the acquisition of Fiberweb. The acquisition, which became effective on November 15, 2013, was funded on November 27, 2013.

Borrowings bear interest at a rate equal to the Eurodollar rate plus an applicable margin of 6.00% for the initial three-month period following the date of borrowing, increasing by 0.50% after each subsequent three-month period, subject to a specified maximum rate. Amounts outstanding were senior secured obligations of ours and unconditionally guaranteed, jointly and severally on a senior secured basis, by Holdings and Polymer’s 100% owned domestic subsidiaries. As a result of the Term Loans and the equity contribution from Blackstone, all outstanding borrowings under the Secured Bridge Facility were repaid and the facility was subsequently terminated.

Unsecured Bridge Facility

On November 27, 2013, the Company entered into a Senior Unsecured Bridge Credit Agreement (the "Unsecured Bridge Facility") with a final maturity date of February 1, 2019. The Unsecured Bridge Facility provided for a commitment by the lenders to make secured bridge loans in an aggregate amount not to exceed $50.0 million, the proceeds of which were used to partially fund the acquisition of Fiberweb. The acquisition, which became effective on November 15, 2013, was funded on November 27, 2013.

Borrowings bear interest at a rate equal to the Eurodollar rate plus an applicable margin of 9.25% for the initial three-month period following the date of borrowing, increasing by 0.50% after each subsequent three-month period, subject to a specified maximum rate. Amounts outstanding were senior secured obligations of ours and unconditionally guaranteed, jointly and severally on a senior secured basis, by Holdings and Polymer’s 100% owned domestic subsidiaries. As a result of the Term Loans and the equity contribution from Blackstone, all outstanding borrowings under the Unsecured Bridge Facility were repaid and the facility was subsequently terminated.

Argentina Credit Facility - Nacion

In January 2007, the Company's subsidiary in Argentina entered into an arrangement with banking institutions in Argentina in order to finance the installation of a new spunmelt line at its facility near Buenos Aires, Argentina. The maximum borrowings available under the facility, excluding any interest added to principal, were 33.5 million Argentine pesos with respect to an Argentine peso-denominated loan and $26.5 million with respect to a U.S. dollar-denominated loan. The loans are secured by pledges covering (i) the subsidiary's existing equipment lines; (ii) the outstanding stock of the subsidiary; and (iii) the new machinery and equipment being purchased, as well as a trust assignment agreement related to a portion of receivables due from certain major customers of the subsidiary.

The interest rate applicable to borrowings under these term loans is based on LIBOR plus 290 basis points for the U.S. dollar-denominated loan and Buenos Aires Interbanking Offered Rate plus 475 basis points for the Argentine peso-denominated loan. Principal and interest payments began in July 2008 with the loans maturing as follows: annual amounts of $3.5 million beginning in 2011 and continuing through 2015, and the remaining $1.7 million in 2016.

In connection with the Merger, the Company repaid and terminated the Argentine peso-denominated loan. In addition, the U.S. denominated loan was adjusted to reflect its fair value as of the date of the Merger. As a result, the Company recorded a contra-liability in Long-term debt and will amortize the balance over the remaining life of the facility. At December 28, 2013, the face amount of the outstanding indebtedness under the U.S. dollar-denominated loan was $8.6 million, with a carrying amount of $8.3 million and a weighted average interest rate of 3.14%.

Argentina Credit Facility - Galicia

On September 27, 2013, the Company's subsidiary in Argentina entered into an arrangement with a banking institution in Argentina in order to partially finance the upgrade of a manufacturing line at its facility located near Buenos Aires, Argentina. The maximum borrowings available under the facility, excluding any interest added to principal, is 20.0 million Argentine pesos (approximately $3.5 million). The three-year term of the agreement began with the date of the first draw down on the facility, which occurred in the third quarter of 2013, with payments required in twenty-five equal monthly installments beginning after one year. Borrowings will bear interest at 15.25%. As of December 28, 2013, the outstanding balance under the facility was $3.1 million. The remainder of the upgrade is expected to be financed by existing cash balances and cash generated from operations.

China Credit Facility — Healthcare

In the third quarter of 2010, the Company's subsidiary in China entered into a three-year U.S. dollar denominated construction loan agreement (the “Healthcare Facility”) with a banking institution in China to finance a portion of the installation of the new spunmelt line at its manufacturing facility in Suzhou, China. The three-year term of the agreement began with the date of the first draw down on the Healthcare Facility, which occurred in fourth quarter of 2010. The interest rate applicable to borrowings is based on three-month LIBOR plus an amount to be determined at the time of funding based on the lender's internal head office lending rate (400 basis points at the time the credit agreement was executed), but in no event would the interest rate be less than 1-year LIBOR plus 250 points.

The maximum borrowings available under the facility, excluding any interest added to principal, were $20.0 million. The Company repaid $4.0 million of the principle balance in the fourth quarter of 2012. As a result, the outstanding balance under the Healthcare Facility was $16.0 million at December 29, 2012 with a weighted average interest rate of 5.44%. The final principle payment was made during the fourth quarter using a combination of existing cash balances and cash generated from operations. As a result, the Company had no outstanding borrowing under the Healthcare Facility at December 28, 2013.

China Credit Facility — Hygiene

In the third quarter of 2012, the Company's subsidiary in China entered into a three-year U.S. dollar denominated construction loan agreement (the “Hygiene Facility”) with a banking institution in China to finance a portion of the installation of a new spunmelt line at its manufacturing facility in Suzhou, China. The interest rate applicable to borrowings under the Hygiene Facility is based on three-month LIBOR plus an amount to be determined at the time of funding based on the lender's internal head office lending rate (520 basis points at the time the credit agreement was executed).

The maximum borrowings available under the facility, excluding any interest added to principal, were $25.0 million. At December 29, 2012, the outstanding balance under the Hygiene Facility was $11.0 million with a weighted average interest rate of 5.51%. At December 28, 2013, the outstanding balance under the Hygiene Facility was $24.9 million with a weighted-average interest rate of 5.46%. The Company's first payment on the outstanding principal is due in the first quarter of 2014, which the Company expects to fund using existing cash balances and cash generated from operations.

Other Indebtedness

The Company periodically enters into short-term credit facilities in order to finance various liquidity requirements. At December 28, 2013 and December 29, 2012, outstanding amounts related to such facilities were $0.4 million and $0.8 million, respectively, which are being used to finance insurance premium payments. The weighted average interest rate on these borrowings was 2.67% and 2.46%, respectively. Borrowings under these facilities are included in Short-term borrowings in the Consolidated Balance Sheets.

As a result of the acquisition of Fiberweb, the Company assumed control of Terram Geosynthetics Private Limited, a joint venture located in Mundra, India in which the Company maintains a 65% controlling interest. As part of the net assets acquired, the Company assumed $3.8 million of debt that was entered into with a banking institution in India. Amounts outstanding primarily relate to a 14.70% term loan, due in 2017, used to purchase fixed assets. Other amounts relate to a short-term credit facility used to finance working capital requirements and an existing automobile loan.

The Company also has documentary letters of credit not associated with the ABL Facility, Healthcare Facility or the Hygiene Facility. These letters of credit were primarily provided to certain raw material vendors and amounted to $8.5 million and $6.7 million at December 28, 2013 and December 29, 2012, respectively. None of these letters of credit have been drawn upon.