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Long-Term Obligations
12 Months Ended
Dec. 31, 2013
Debt Disclosure [Abstract]  
Long-Term Debt
Long-Term Debt

Long-term debt obligations consisted of the following:
 
December 31,
2013
 
December 31,
2012
Senior Secured Notes (9.5%)
$
375,000

 
$
375,000

Senior Unsecured Loan Facility (12.25%)
123,640

 
123,188

ABL Credit Facility
36,756

 
18,486

Total long term debt
$
535,396

 
$
516,674


On March 18, 2011, Euramax International, Inc. (“Euramax International”), a 100% owned subsidiary of Euramax Holdings, Inc ("Euramax Holdings"), issued $375 million of Senior Secured Notes (the “Notes”) in a private placement exempt from registration requirements under the Securities Act of 1933, as amended (the “Securities Act”). Concurrent with the issuance of the Notes, Euramax International, Euramax Holdings, and certain of its domestic subsidiaries entered into a new senior unsecured loan facility (the “Senior Unsecured Loan Facility”) with an aggregate principal amount of $125.0 million issued at 98% of par and an Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement (the “ABL Credit Facility”), which provided revolving credit financing of up to $70 million.
Prior to the issuance of the Notes and the Senior Unsecured Loan Facility, the Company had outstanding obligations of approximately $514.7 million under the First Lien Credit Agreement. Proceeds from the $375 million offering of Notes, issued at par, were used to pay lenders under the First Lien Credit Agreement. Additionally, certain existing lenders exchanged approximately $102.7 million of existing loans under the First Lien Credit Agreement and cash of $19.8 million for the $125.0 million of loans under the new Senior Unsecured Loan Facility, which were issued at 98% of par. Cash proceeds along with borrowings under the ABL Credit Facility were used to repay the remaining outstanding amounts due under the First Lien Credit Agreement and expenses related to the refinancing. The difference between the consideration received and the aggregate face amount of the Senior Unsecured Loan Facility ($1.4 million) is being amortized and recorded in interest expense using the effective interest rate method over the term of the Senior Unsecured Loan Facility.
The Company recognized a loss of approximately $1.5 million on the 2011 extinguishment of the First Lien Credit Agreement. This loss was primarily comprised of the write-off of previously capitalized deferred debt issuance costs and was recorded in other income (loss), net. Deferred debt issuance costs related to then-existing obligations under the First Lien Credit Agreement, which were exchanged for amounts under the Senior Unsecured Loan Facility, are being amortized to interest expense over the term of the Senior Unsecured Loan Facility using the effective interest rate method. Direct and incremental debt issuance costs related to the Notes, Senior Unsecured Loan Facility, and ABL Credit Facility, including legal fees, printing costs and bank fees totaled approximately $10.6 million and have been capitalized and reported as deferred financing costs within other assets. These costs are being amortized and recorded in interest expense using the effective interest rate method over the term of the applicable agreement.
The Company has $36.8 million of outstanding debt under revolving credit facilities. The Company expects to make payments and borrowings under the facilities during 2014. Additionally, the Company has $500 million of outstanding debt that will mature in 2016. There are no other maturities of long term debt in the next five years.
Senior Secured Notes
The Notes consist of an aggregate principal amount of $375 million, which were issued pursuant to an indenture (the "Indenture") dated March 18, 2011, among Euramax International, Euramax Holdings, and certain of its domestic subsidiaries as guarantors, and Wells Fargo Bank, National Association, the Trustee. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Euramax Holdings, Euramax International, and Amerimax Richmond Company, a 100% owned domestic subsidiary of Euramax International. The Notes bear interest at 9.50% per year and mature on April 1, 2016, unless earlier redeemed or repurchased by Euramax International. Interest is payable semi-annually on April 1 and October 1 of each year.
The Notes are secured by a first priority security interest in (i) substantially all of the assets of Euramax International and the guarantors (other than inventory and accounts receivable and related assets, which assets secure the ABL Credit Facility on a first priority basis) and (ii) all of Euramax International's capital stock and the capital stock of each material domestic restricted subsidiary owned by Euramax International or a guarantor and 65% of the voting capital stock and 100% of any non-voting capital stock of foreign restricted subsidiaries directly owned by us or a guarantor, and a second priority security interest in the inventory, receivables and related assets.
The Notes may be redeemed at the option of Euramax International, in whole or in part, under the conditions specified in the Indenture at the following redemption prices, plus accrued and unpaid interest to the redemption date if redeemed during the twelve-month period beginning on April 1 of the years indicated:
Year
Percentage
2013
107.125
%
2014
104.750
%
2015 and thereafter
100.000
%

The Indenture contains restrictive covenants that limit, among other things, the ability of Euramax International and certain of its subsidiaries to incur additional indebtedness, pay dividends and make certain distributions, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants. These limitations also prohibit Euramax International's ability to transfer cash or assets to Euramax Holdings, whether by dividend, loan or otherwise. The Indenture also contains customary events of default. If Euramax International undergoes a change of control (as defined in the Indenture), Euramax International will be required to make an offer to repurchase the Notes at 101% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption.
In connection with the sale of the Notes, Euramax International, the guarantors, and the initial purchasers entered into a registration rights agreement. Pursuant to the registration rights agreement, Euramax International and the guarantors agreed to file a registration statement with the Securities and Exchange Commission with respect to publicly registered Notes having identical terms to the outstanding Notes. The Securities and Exchange Commission declared the Company's registration statement with respect to the Notes effective on December 22, 2011. On December 23, 2011, the Company launched a registered tender offer in which the holders of the outstanding Notes were given the opportunity to exchange their Notes for the exchange notes. The exchange offer was completed on January 26, 2012 with 100% of the $375 million 9.50% Notes due 2016 tendered in the exchange offer.
Senior Unsecured Loan Facility
On March 3, 2011, Euramax Holdings, Euramax International and certain of its domestic subsidiaries, as guarantors, entered into a credit and guaranty agreement for a new senior unsecured loan facility (the “Senior Unsecured Loan Facility”) in the aggregate principal amount of $125.0 million. Proceeds from the facility were received on March 18, 2011. The Senior Unsecured Loan Facility will mature on October 1, 2016. Loans under the Senior Unsecured Loan Facility bear interest at 12.25% per year in the event no election is made to pay interest in kind (PIK) by increasing the principal amount of the notes, and 14.25% (7.875% cash pay and 6.375% PIK) per annum in the event a PIK election is made. The Company may make a PIK election for up to six quarters during the term of the Senior Unsecured Loan Facility. The interest rate on outstanding borrowings under the Senior Unsecured Loan Facility at December 31, 2013 was 12.25%, as the Company has not made a PIK election.
Euramax International may prepay outstanding amounts under the Senior Unsecured Loan Facility, in whole or in part, at the prices (expressed as percentages of the loans) set forth below:
Prepayment Date
Percentage
On or after the second anniversary of the closing but prior to the third anniversary thereof
103
%
On or after the third anniversary of the closing but prior to the fourth anniversary thereof
102
%
On or after the fourth anniversary of the closing
100
%

Upon a change of control, Euramax International may be required to purchase all or a portion of the Senior Unsecured Loan Facility at a price equal to 101% of the principal amount plus accrued and unpaid interest. All obligations under the Senior Unsecured Loan Facility are unconditionally guaranteed by Euramax Holdings, Euramax International, and substantially all of Euramax International's existing and future direct and indirect wholly‑owned domestic material restricted subsidiaries.
The Senior Unsecured Loan Facility contains restrictive covenants that limit, among other things, the ability of Euramax International and certain of its subsidiaries to incur additional indebtedness, pay dividends and make certain distributions, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants.
The Senior Unsecured Loan Facility contains certain customary representations and warranties, affirmative covenants and events of default, including among other things, payment defaults, covenant defaults, cross‑defaults to certain indebtedness, certain events of bankruptcy, material judgments, and failure of any guaranty supporting the Senior Unsecured Loan Facility to be in force and effect in any material respect. If such an event of default occurs, the administrative agent would be entitled to take various actions, including the acceleration of amounts due under the Senior Unsecured Loan Facility and all actions permitted to be taken by an unsecured creditor.
ABL Credit Facility
On March 18, 2011, Euramax Holdings, Euramax International, and certain of its domestic subsidiaries, entered into the Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement (the "ABL Credit Facility"), with various lenders, Regions Bank, as Collateral and Administrative Agent, Wells Fargo Capital Finance, LLC, as Co-Collateral Agent, and Regions Business Capital, as Sole Lead Arranger and Bookrunner. The ABL Credit Facility provides for revolving credit financing of up to $70 million, subject to borrowing base availability. As of December 31, 2013, $12.7 million was available to be drawn on the ABL Facility.
On March 21, 2014, the ABL Credit Facility was amended to, among other items, (i) reduce the applicable margin rate for LIBOR borrowings from a range of 2.00% to 2.75% to a range of 1.75% to 2.25% and reduce the applicable margin rate for Base Rate borrowings from a range of 1.00% to 1.75% to a range of 1.00% to 1.25%, in each case, based on average excess availability rather than corporate credit ratings of the Company, (ii) reduce the minimum excess availability threshold to $1.0 million, (iii) reduce the fixed charge coverage ratio from 1.15 to 1.00, (iv) suspend the testing of the fixed charge coverage ratio during the occurrence of a Seasonal Overadvance B or Seasonal Overadvance C (in each case as defined below), (v) suspend the testing of the minimum consolidated EBITDA test except during the occurrence of a Seasonal Overadvance B or Seasonal Overadvance C, and (vi) provide for the three mutually exclusive overadvance facilities. Refer to Note 16 Subsequent Events for further discussion of the amendment to the ABL Credit Facility.
As of December 31, 2013, borrowings under the ABL Credit Facility bore interest at a rate per annum equal to either (a) LIBOR plus an applicable margin or (b) a Base Rate determined by reference to the highest of (1) the prime commercial lending rate published by Regions Bank as its “prime rate” for commercial loans, (2) the federal funds effective rate plus 0.50% and (3) the one-month LIBOR plus 1.00%, plus an applicable margin. The applicable margin is dependent upon the type of borrowings the Company has made under the ABL Credit Facility. As of December 31, 2013, the applicable margins were 2.50% and 1.50% for LIBOR and Base Rate borrowings, respectively. The applicable margins were subject to Euramax International's corporate credit rating as determined from time to time by Standard and Poor's and Moody's Investors Service and ranged from 2.00% to 2.75% for LIBOR borrowings and 1.00% to 1.75% for Base Rate borrowings. The weighted average interest rate, including the applicable margin payable on outstanding borrowings under the ABL Credit Facility, at December 31, 2013 was 3.07%. The ABL Credit Facility requires Euramax International to pay a commitment fee ranging from 0.375% to 0.5%, based on the unutilized commitments. Euramax International is also required to pay customary letter of credit fees, including, without limitation, a letter of credit fee equal to the applicable margin on revolving credit LIBOR loans and fronting fees.
All obligations under the ABL Credit Facility are unconditionally guaranteed by Euramax Holdings, Euramax International, and substantially all of Euramax International's existing and future direct and indirect, wholly owned domestic restricted subsidiaries which are not borrowers. All obligations under the ABL Credit Facility are secured, subject to certain exceptions, by a first‑priority security interest in Euramax International's and the Guarantors' inventory and accounts receivable and related assets, referred to as the ABL Collateral, and a junior‑priority security interest in (i) substantially all of Euramax International's and the Guarantors' assets (other than inventory and accounts receivable and related assets, which assets secure the ABL Credit Facility on a first priority basis) and (ii) all of Euramax International's capital stock and the capital stock of each material domestic restricted subsidiary owned by Euramax International or a Guarantor and 65% of the voting capital stock and 100% of any non-voting capital stock of foreign restricted subsidiaries directly owned by Euramax International or a Guarantor, which we refer to collectively as the Notes Collateral.
The ABL Credit Facility contains affirmative and negative covenants customary for this type of financing, including, but not limited to certain financial covenants in the event excess availability is less than 12.5% of the lesser of the aggregate amount of commitments outstanding at such time and the borrowing base. As of December 31, 2013, Euramax International was required to meet a minimum consolidated fixed charge coverage ratio of at least 1.15:1.00 if excess availability fell below 12.5%. As of December 31, 2013, excess availability exceeded 12.5% of the borrowing base; therefore, Euramax International was not required to meet the minimum consolidated fixed charge coverage ratio. Additionally, restrictive covenants limit the ability of Euramax International and certain of its subsidiaries to incur liens, incur, assume or permit to exist additional indebtedness, guarantees and other contingent obligations, consolidate, merge or sell all or substantially all of their assets, pay dividends or make other distributions, make certain loans and investments, amend or otherwise alter the terms of documents related to certain of their indebtedness, enter into transactions with affiliates and prepay certain indebtedness, in each case, subject to exclusions, and other customary covenants.
Dutch Revolving Credit Facility
In February 2012, the Company's 100% owned subsidiary, Euramax Coated Products, B.V., entered into a revolving credit facility with Rabobank Roermond (the "Dutch Revolving Credit Facility"). The Dutch Revolving Credit Facility provides revolving credit financing of up to EUR 15 million and matures on April 1, 2016. Borrowings under the Dutch Revolving Credit Facility bear interest at a rate per annum which is the aggregate of the average one month Euribor rate over a calendar month plus a margin of 2% and requires payment of a commitment fee of 0.35% per annum on the nominal amount of the credit facility. All obligations under the Dutch Revolving Credit Facility are secured by a mortgage on the real estate of Euramax Coated Products, B.V., a pledge on present and future machinery and present and future accounts receivable balances of Euramax Coated Products, B.V. At December 31, 2013, $20.6 million was available to be drawn on the Dutch Revolving Credit Facility.
The Dutch Revolving Credit Facility contains financial and non-financial covenants customary for this type of financing. Financial covenants include, but are not limited to, a minimum annual EBITDA target and a minimum amount of risk-bearing capital for Euramax Coated Products, B.V., both measured at the Company's fiscal year end. The Dutch Revolving Credit Facility also contains a clause limiting further indebtedness. As of December 31, 2013, Euramax Coated Products, B.V. is in compliance with all covenants.
First Lien Credit Agreement
The Company's amended and restated first lien credit agreement (the “First Lien Credit Facility”) consisted of $525.3 million in term loans in the form of the Cash Pay Loan and the PIK Loan. The Cash Pay Loan and PIK Loan each included (i) a U.S. dollar term loan facility (the “U.S. Dollar Term Loan Facility”) and (ii) Euro and British pound sterling term loan facilities (together the “European Term Loan Facility”). Euramax International and Euramax International Holdings B.V. were the borrowers (collectively, the “U.S. Borrowers”) under the U.S. Dollar Term Loan Facility. The Company's subsidiaries Euramax Holdings Limited, Euramax Europe B.V. and Euramax Netherlands B.V. were the borrowers (collectively, the “European Borrowers”) under the European Term Loan Facility. Outstanding amounts under the First Lien Credit Facility totaling approximately $514.7 million were repaid in the first quarter of 2011 with the proceeds of our Notes and Senior Unsecured Loan Facility. The First Lien Credit Facility was terminated in March 2011.