Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt |
Debt
The following is a summary of the Company’s long-term indebtedness (in thousands):
The Company’s Senior Credit Facility, which was amended and restated during the third quarter of fiscal 2015, matures on May 8, 2020 and includes a $600 million revolver, $300 million term loan and a $450 million expansion option. Borrowings are subject to a pricing grid, which can result in increases or decreases to the borrowing spread above LIBOR, depending on the Company’s net leverage ratio, ranging from 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. At May 31, 2015, the borrowing spread on LIBOR based borrowings was 1.75% (aggregating to 1.94%). In addition, a non-use fee is payable quarterly on the average unused credit line under the revolver ranging from 0.15% to 0.35% per annum. At May 31, 2015, the unused credit line under the revolver was $590.8 million, of which $250.5 million was available for borrowings. Quarterly principal payments of $3.8 million begin on the term loan on June 30, 2016, increasing to $7.5 million per quarter beginning on June 30, 2017, with the remaining principal due at maturity. The Senior Credit Facility is secured by substantially all of the Company’s domestic personal property assets and contains customary limits and restrictions concerning investments, sales of assets, liens on assets, dividends and other payments. The two financial covenants included in the Senior Credit Facility agreement are a maximum leverage ratio of 3.75 to 1 and a minimum interest coverage ratio of 3.50 to 1. The Company was in compliance with all financial covenants at May 31, 2015.
On April 16, 2012, the Company issued $300 million of 5.625% Senior Notes due 2022 (the “Senior Notes”). The Senior Notes require no principal payments 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 (ranging from 100.0% to 102.8%), plus accrued and unpaid interest. As required under the indenture governing the Senior Notes, on June 19, 2015, the Company initiated an offer to repurchase, at par value, an amount of Senior Notes equal to the net proceeds from the Electrical segment and RV divestitures that exceed the amounts reinvested in capital expenditures and business acquisitions since the divestitures. The maximum principal amount of Senior Notes that will be repurchased in the repurchase offer (which will expire on July 20, 2015) is $165.0 million. The Company has adequate capacity under its Senior Credit Facility revolver to fund the repurchase offer. However, if the Senior Notes continue to trade in excess of par value (102.8% on May 31, 2015) through the expiration of the repurchase offer, it is unlikely that Senior Note holders will accept the par repurchase offer.
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