Related Party Transactions

3 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

7. RELATED PARTY TRANSACTIONS

ADS Mexicana - ADS conducts business in Mexico and Central America through its joint venture ADS Mexicana, S.A. de C.V. (together with its affiliate ADS Corporativo, S.A. de C.V., “ADS Mexicana”). ADS owns 51% of the outstanding stock of ADS Mexicana and consolidates ADS Mexicana for financial reporting purposes.

On June 22, 2018, the Company and ADS Mexicana entered into an Intercompany Revolving Credit Promissory Note (the “Intercompany Note”) with a borrowing capacity of $12.0 million. The Intercompany Note matures on June 22, 2022. The Intercompany Note indemnifies the ADS Mexicana joint venture partner for 49% of any unpaid borrowing. The interest rates under the Intercompany Note are determined by certain base rates or London Interbank Offered Rate (“LIBOR”) plus an applicable margin based on the Leverage Ratio. As of June 30, 2021 and March 31, 2021, there were no borrowings outstanding under the Intercompany Note.

South American Joint Venture - The Tuberias Tigre - ADS Limitada joint venture (the “South American Joint Venture”) manufactures and sells HDPE corrugated pipe in certain South American markets. ADS owns 50% of the South American Joint Venture. ADS is the guarantor of 50% of the South American Joint Venture’s credit arrangement, and the debt guarantee is shared equally with the joint venture partner. The

Company’s maximum potential obligation under this guarantee is $11.0 million as of June 30, 2021. The maximum borrowings permitted under the South American Joint Venture’s credit arrangement are $22.0 million. The Company does not anticipate any required contributions related to the balance of this credit arrangement. As of June 30, 2021 and March 31, 2021, the outstanding principal balances of the credit arrangement including letters of credit were $9.9  million and $10.0  million, respectively. As of June 30, 2021, there were no U.S. dollar denominated loans. The weighted average interest rate as of June 30, 2021 was 3.5% on Chilean peso denominated loans.