13. Debt and Interest Costs

Long-term debt and interest rates in effect consisted of the following:

	December 31,
($ in millions)	2015			2014

Notes Payable
6.75% Senior Notes, due September 2020	$	—		$	500.0
5.75% Senior Notes, due May 2021	—			500.0
5.25% Senior Notes, due July 2025	1,000.0			—
5.00% Senior Notes, due March 2022	750.0			750.0
4.375% Senior Notes, due December 2020	1,000.0			—
4.375% Senior Notes, euro denominated, due December 2023	760.3			—
4.00% Senior Notes, due November 2023	1,000.0			1,000.0
3.50% Senior Notes, euro denominated, due December 2020	434.5			—
Multi-currency revolver, due February 2018	—			—
Bridge Facility	—			—
Senior Credit Facilities, due June 2018 (at variable rates)
Term C Loan, euro denominated (2014 - 1.65%)	—			92.9
Latapack-Ball Notes Payable, denominated in various currencies
(2015 - 4.35%; 2014 - 4.14%)	167.5			204.2
Other (including discounts and premiums)	(4.5		)	1.7

	5,107.8			3,048.8

Less: Current portion of long-term debt	(53.6		)	(55.0		)

	$	5,054.2		$	2,993.8

At December 31, 2015, taking into account outstanding letters of credit and excluding availability under the accounts receivable securitization program, approximately $2.2 billion was available under the company’s long-term, multi-currency committed revolving credit facilities, which are available until February 2018. In addition to these facilities, the company had approximately $452 million of short-term uncommitted credit facilities available at December 31, 2015, of which $23.7 million was outstanding and due on demand. At December 31, 2014, the company had $10.1 million outstanding under short-term uncommitted credit facilities. The weighted average interest rate of the outstanding short-term facilities was 0.9 percent at December 31, 2015, and 1.5 percent at December 31, 2014.

Short-term debt and current portion of long-term debt on the balance sheet includes the company’s borrowings under its existing accounts receivable securitization agreement, with no amounts outstanding at December 31, 2015, and $110 million outstanding at December 31, 2014. This agreement, which has been amended and extended from time to time, is scheduled to mature in June 2017 and allows the company to borrow against a maximum amount of accounts receivable that varies between $90 million and $140 million depending on the seasonal accounts receivable balance in the company’s North American packaging businesses.

Following is a summary of debt refinancing and other costs included in the consolidated statements of earnings:

	Years Ended December 31,
($ in millions)	2015			2014			2013
Debt Refinancing and Other Costs:
Redemption of 6.75% and 5.75% senior notes, due September 2020 and May 2021, respectively	$	(55.8	)	$	—		$	—
Unsecured, committed bridge facility	(22.8		)	—			—
Economic hedge - interest rate risk	(15.9		)	—			—
Partial extinguishment of committed bridge facility	(10.7		)	—			—
Partial extinguishment of revolving credit facility	(5.0		)	—			—
Interest expense on 3.5% and 4.375% senior notes	(4.6		)	—			—
Refinance of senior credit facilities	(1.7		)	—			—
Redemption of 7.375% senior notes, due September 2019	—			(33.1		)	—
Early repayment of Term A loan	—			—			(26.5		)
Other individually insignificant	—			—			(1.5		)

	$	(116.5	)	$	(33.1	)	$	(28.0	)

In February 2015, Ball entered into a new $3 billion revolving credit facility to replace the existing approximate $1 billion revolving credit facility, repay its $92.9 million Term C loan, repay the outstanding balance on the existing revolving credit facility, redeem the 2020 and 2021 senior notes and repay the existing private placement debt of Rexam upon closing of the announced, proposed acquisition of Rexam. The new revolving credit facility expires in February 2018 and accrues interest at LIBOR plus an applicable margin based on the net leverage ratio of the company, which varies from 1.25 percent to 1.75 percent. In June 2015, Ball issued $1 billion of 5.25 percent senior notes due in July 2025. Ball used the net proceeds of the offering and other available cash to repay borrowings under its revolving credit facility and reduced the borrowing capacity under the revolving credit facility from $3 billion to $2.25 billion. In connection with this partial extinguishment, the company recorded a charge of $5.0 million, which is included in debt refinancing and other costs, a component of total interest expense, in the consolidated statements of earnings.

Also in February 2015, the company entered into a £3.3 billion unsecured bridge loan agreement, pursuant to which lending institutions have agreed, subject to limited conditions, to provide financing necessary to pay the cash portion of the consideration payable to Rexam shareholders upon consummation of the proposed acquisition of Rexam and related fees and expenses. The unsecured bridge loan agreement will bear interest that can vary depending on the amount borrowed and the duration that the facility is outstanding. These charges of $22.8 million are included in debt refinancing and other costs, a component of total interest expense, in the consolidated statements of earnings. The interest for the unsecured bridge loan agreement can vary, not to exceed 7.0 percent per annum. The availability under the unsecured bridge loan agreement was reduced to £1.9 billion, which resulted in the write-off of $10.7 million of unamortized deferred financing costs, which is included in debt refinancing and other costs.

In March 2015, Ball redeemed its outstanding 6.75 percent senior notes and 5.75 percent senior notes due in September 2020 and May 2021, respectively, at a price per note of 103.375 percent and 106.096 percent, respectively, of the outstanding principal amounts plus accrued interest. The redemption resulted in a pre-tax charge in interest expense of $55.8 million, composed of the redemption premiums and the write-offs of related debt financing costs.

In December 2015, the company issued $1 billion of 4.375 percent senior notes, €400 million of 3.5 percent senior notes, all due in December 2020, and €700 million of 4.375 percent senior notes, due in December 2023. The company intends to use the proceeds to pay a portion of the cash consideration payable in the proposed Rexam acquisition. Until the Rexam acquisition is consummated, the interest on these senior notes is recorded in debt refinancing and other costs, which totalled $4.6 million. In the event the Rexam acquisition is not consummated on or prior to November 15, 2016, these senior notes will be callable by the lender, requiring the company to effect the redemption of all of the outstanding notes of each series at the applicable redemption price of face value plus accrued and unpaid interest. This would result in use of restricted cash to redeem these senior notes and pay any additional fees.

In December 2013, Ball announced the redemption of its outstanding 7.375 percent senior notes due in September 2019 in the amount of $315.4 million. The redemption occurred on January 10, 2014, at a price per note of 108.01 percent of the outstanding principal amount plus accrued interest. The redemption of the bonds resulted in a pretax charge in the first quarter of 2014 of $33.1 million for the call premium and the write off of unamortized financing costs and premiums. These charges are included in debt refinancing and other costs, a component of interest expense, in the consolidated statement of earnings.

In June 2013, we amended the senior credit facilities and extended the term from December 2015 to June 2018. In connection with the amendment, we recorded a charge of $0.4 million for the write-off of unamortized financing costs, which is included in debt refinancing and other costs, a component of total interest expense, in the consolidated statements of earnings.

In May 2013, Ball: (1) issued $1 billion of 4.00 percent senior notes due in November 2023; (2) tendered for the redemption of its 7.125 percent senior notes originally due in September 2016 in the amount of $375 million, at a redemption price per note of 105.322 percent of the outstanding principal amount plus accrued interest; and (3) repaid the $125 million Term A loan, which was a component of the senior credit facilities. The redemption of the senior notes, all of which occurred in the second quarter of 2013, and the early repayment of the Term A loan resulted in charges of $26.5 million for the tender and call premiums, as well as the write-off of unamortized financing costs and issuance discounts. These charges are included in debt refinancing and other costs, a component of interest expense, in the consolidated statement of earnings.

The fair value of the long-term debt was estimated to be $5.2 billion at December 31, 2015, which approximated the carrying value of $5.1 billion. The fair value was estimated to be $3.1 billion at December 31, 2014, which approximated the carrying value of $3.0 billion. The fair value reflects the market rates at each period end for debt with credit ratings similar to the company’s ratings and is classified as Level 2 within the fair value hierarchy. Rates currently available to the company for loans with similar terms and maturities are used to estimate the fair value of long-term debt based on discounted cash flows.

Long-term debt obligations outstanding at December 31, 2015, have maturities (net of discounts of $8.5 million related to 2018) of $53.6 million, $47.6 million, $23.5 million, $11.3 million and $1,446.5 million in the years ending December 31, 2016 through 2020, respectively, and $3,525.3 million thereafter.

Ball provides letters of credit in the ordinary course of business to secure liabilities recorded in connection with certain self-insurance arrangements. Letters of credit outstanding at December 31, 2015 and 2014, were $15.8 million and $16.3 million, respectively.

Interest payments (net of capitalized interest) were $130.0 million, $168.6 million and $187.5 million in 2015, 2014 and 2013, respectively.

The senior notes and senior credit facilities are guaranteed on a full, unconditional and joint and several basis by certain of the company’s wholly owned domestic subsidiaries. Certain foreign denominated tranches of the senior credit facilities are similarly guaranteed by certain of the company’s wholly owned foreign subsidiaries. Note 23 contains further details, as well as required condensed consolidating financial information for the company, segregating the guarantor subsidiaries and non-guarantor subsidiaries as defined in the senior notes agreements.

The U.S. note agreements, bank credit agreement and accounts receivable securitization agreement contain certain restrictions relating to dividend payments, share repurchases, investments, financial ratios, guarantees and the incurrence of additional indebtedness. The most restrictive of the company’s debt covenants require the company to maintain a leverage ratio (as defined) of no greater than 4.00.

The company was in compliance with all loan agreements and debt covenants at December 31, 2015 and 2014, and has met all debt payment obligations.