Note 10 – Debt

The Company has an accounts receivable securitization facility of up to $175,000. Pursuant to the terms of the facility, the Company is permitted to sell certain of its domestic trade receivables on a continuous basis to its wholly-owned, bankruptcy-remote subsidiary, Cooper Receivables LLC (“CRLLC”). In turn, CRLLC may sell from time to time an undivided ownership interest in the purchased trade receivables, without recourse, to a PNC Bank administered, asset-backed commercial paper conduit. During 2012, the maturity of this facility was extended until June 2015.

The Company and its subsidiary, Max-Trac Tire Co., Inc., have entered into a Loan and Security Agreement (the “New Credit Agreement”) with a consortium of four banks. This New Credit Agreement provides a $200,000 credit facility to the Company and Max-Trac Tire Co., Inc. The New Credit Agreement is a revolving credit facility and is secured by the Company’s U.S. inventory, certain North American accounts receivable that have not been previously pledged and general intangibles related to the foregoing. The New Credit Agreement has a maturity date of July 2016. Borrowings under the New Credit Agreement bear a margin based on the London Interbank Offered Rate.

The New Credit Agreement and the accounts receivable securitization facility have no significant financial covenants until availability is reduced to specified levels. At December 31, 2013, the Company was not in compliance with the covenants requiring the Company to furnish financial statements, as the third quarter Form 10-Q had not been filed. The Company filed the third quarter Form 10-Q on February 28, 2014 and is now in compliance with these covenants. There were no borrowings under the New Credit Agreement or the accounts receivable securitization facility at December 31, 2012 or December 31, 2013, except amounts used to secure letters of credit totaling $81,900 and $45,100 at December 31, 2012 and 2013, respectively. The Company’s additional borrowing capacity, net of amounts used to back letters of credit and based on eligible collateral through use of its credit facility with its bank group and its accounts receivable securitization facility at December 31, 2013, would have been $241,800.

The Company’s consolidated operations in Asia have renewable unsecured credit lines that provide up to $452,000 of borrowings and do not contain financial covenants. The additional borrowing capacity on the Asian credit lines, based on eligible collateral and the short-term notes payable, totaled $407,000 at December 31, 2013.

In 2010, Industrial Revenue Bonds (IRBs) were issued by the City of Texarkana to finance the design, equipping, construction and start-up of the expansion of the Texarkana manufacturing facility in return for real estate and equipment located at the Company’s Texarkana tire manufacturing plant. Because the assets related to the expansion provide security for the bonds issued by the City of Texarkana, the City retains title to the assets which in turn provides a 100 percent property tax exemption to the Company. However, the Company has recorded the property in its Consolidated Balance Sheets, along with a capital lease obligation to repay the proceeds of the IRB because the arrangement is cancelable at any time at the Company’s request. The Company has also purchased the IRBs and therefore is the bondholder as well as the borrower/lessee of the property purchased with the IRB proceeds. The capital lease obligation and IRB asset are recorded net in the Consolidated Balance Sheets. At December 31, 2012 and 2013, the assets and liabilities associated with these City of Texarkana IRBs were $20,000.

The following table summarizes the long-term debt of the Company at December 31, 2012 and 2013. The secured notes due in 2016 are guaranteed by certain plant assets of the Company’s COOCSA subsidiary. Except for these secured notes and capitalized leases and other, the long-term debt is due in an aggregate principal payment on the due date:


	2012		2013
Parent company
8% unsecured notes due December 2019	$	173,578	$	173,578
7.625% unsecured notes due March 2027		116,880		116,880
Capitalized leases and other		9,262		8,662

		299,720		299,120
Subsidiaries
4.27% to 6.15% unsecured notes due in 2014		29,321		15,560
4.27% to 4.70% unsecured notes due in 2015		3,118		8,554
4.00% to 6.15% unsecured notes due in 2016		—		11,036
5.42% and 5.61% secured notes due in 2016		6,302		4,557

		38,741		39,707

		338,461		338,827
Less current maturities		2,319		17,868

	$	336,142	$	320,959

Over the next five years, the Company has payments related to the above debt of: 2014 - $17,868, 2015 - $10,862, 2016 - $12,777, 2017 - $600 and 2018 - $600. In addition, the Company’s partially-owned, consolidated subsidiary operations in the PRC and Mexico have short-term notes payable of $22,105 due in 2014. The weighted average interest rate of the short-term notes payable at December 31, 2012 and 2013 was 5.34 percent and 5.15 percent, respectively.

Interest paid on debt during 2011, 2012 and 2013 was $38,853, $38,727 and $30,694, respectively. The amount of interest capitalized was $3,527, $7,649 and $3,068 during 2011, 2012 and 2013, respectively. The increase in capitalized interest in 2012 is related to the Company’s global ERP project.