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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt |
Note 7. Debt
The following is a summary of the Company’s long-term indebtedness (in thousands):
Senior Credit Facility
Prior to the refinancing of the Company's Senior Credit Facility on March 29, 2019, the Company’s previous Senior Credit Facility matured on May 8, 2020, and provided a $300 million revolver, a $300 million term loan and a $450 million expansion option, subject to certain conditions. Borrowings were subject to a pricing grid, which could result in increases or decreases to the borrowing spread, depending on the Company’s leverage ratio, ranging from a spread of 1.00% to 2.25% in the case of loans bearing interest at LIBOR and from 0.00% to 1.25% in the case of loans bearing interest at the base rate. In addition, a non-use fee was payable quarterly on the average unused credit line under the revolver ranging from 0.15% to 0.35% per annum.
On March 29, 2019, the Company refinanced its Senior Credit Facility resulting in a new $600 million Senior Credit Facility, comprised of a $400 million revolving line of credit and a $200 million term loan. The new facility, which matures in March 2024, includes a reduction in pricing and expands the revolving credit facility from $300 million to $400 million. Borrowings under the new Senior Credit Facility bear interest based on LIBOR or a base rate, with interest rate spreads above LIBOR or the base rate being subject to adjustments based on the Company's net leverage ratio, ranging from 1.125% to 2.00% in the case of loans bearing interest at LIBOR and from 1.25% to 1.00% in the case of loans bearing interest at the base rate. In addition, a non-use fee is payable quarterly in the average unused revolving credit facility ranging from 0.15% to 0.30% per annum, based on the Company's net leverage ratio. Quarterly term loan principal payments of $1.25 million began on August 31, 2019, will escalate to $5.0 million by May 31, 2022, with the remaining principal due at maturity. During fiscal 2019 and in line with its capital allocation strategy, the Company electively prepaid $23.8 million against the remaining principal balance of the term loan subsequent to the refinancing.
The new Senior Credit Facility contains financial covenants that are consistent with the prior facility, with enhancements that improve overall liquidity, and provides the option for future expansion through a $300 million accordion on the revolver. The two financial covenants included are a maximum leverage ratio of 3.75:1 and a minimum interest coverage ratio of 3.50:1. For each covenant, certain transactions lead to adjustments to the underlying ratio, including a reduction of the minimum interest coverage ratio from 3.5 to 3.0 for any fiscal quarter ending within twelve months after the sale of the EC&S segment and an increase to the leverage ratio from 3.75 to 4.25 during the four fiscal quarters after a significant acquisition.
Borrowings under the credit agreement are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors and certain equity interests owned by the foreign law pledgors. In preparation for the divestiture of the EC&S segment, the Company needed to transfer certain assets between guarantor and non-guarantor entities. While this action was contemplated in the new Senior Credit Facility, the Company did not timely notify the lendors of these transactions, and as such, the Company was not in technical compliance with this restrictive covenant at August 31, 2019. However, the Company subsequently obtained the necessary waivers from the lendors to be in compliance as of the date of this report. The Company was in compliance with all financial covenants at August 31, 2019.
As of August 31, 2019, the variable borrowing rate on the outstanding term loan balance was 3.50% and the unused credit line and amount available for borrowing under the revolver was $398.8 million.
Senior Notes
On April 16, 2012, the Company issued $300 million of 5.625% Senior Notes due 2022 (the “Senior Notes”) of which $287.6 million remain outstanding. The Senior Notes require no principal installments prior to their June 15, 2022 maturity, require semiannual interest payments in December and June of each year and contain certain financial and non-financial covenants. The Senior Notes include a call feature that allows the Company to repurchase them anytime on or after June 15, 2017 at stated redemption prices currently at 100.9% and reducing to 100.0% on June 15, 2020, plus accrued and unpaid interest. The Company repurchased $0.5 million of the Senior Notes during fiscal 2017.
The Company made cash interest payments of $26.3 million, $28.8 million and $27.1 million in fiscal 2019, 2018 and 2017, respectively.
As of August 31, 2019, future debt maturities for each of the next five fiscal years were as follows (in thousands):
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