NOTE 8—FINANCING ARRANGEMENTS

Long-term debt consists of the following (in thousands):


September 30,	2016		2015

Series A senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35%	$	50,000	$	50,000
Series B senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35%		50,000		50,000
Series C senior unsecured notes payable to a group of insurance companies, interest fixed at 3.70%		25,000		25,000
Series D senior unsecured notes payable to a group of insurance companies, interest fixed at 3.93%		75,000		—
Mortgage note from a U.K. financial institution, with quarterly installments of principal and interest at 6.48%		1,012		1,705
		201,012		126,705
Less current portion		(450)		(525)
	$	200,562	$	126,180

Maturities of long-term debt for each of the five years in the period ending September 30, 2021, are as follows: 2017 — $0.5 million; 2018 — $0.5 million; 2019 — $0.1 million; 2020 — $10.7 million; 2021 — $35.7 million

Interest paid amounted to $11.0 million, $4.8 million and $4.1 million in 2016, 2015 and 2014, respectively.

In March 2013, we entered into a note purchase and private shelf agreement pursuant to which we issued $100.0 million of senior unsecured notes, bearing interest at a rate of 3.35% and maturing on March 12, 2025. In addition, pursuant to the agreement, on July 17, 2015, we issued an additional $25.0 million of senior unsecured notes, bearing interest at a rate of 3.70% and maturing on March 12, 2025. Interest payments on the notes issued in 2013 and 2015 are due semi-annually and principal payments are due from 2021 through 2025. On February 2, 2016 we revised the note purchase agreement and we issued an additional $75.0 million of senior unsecured notes bearing interest at 3.93% and maturing on March 12, 2026. Interest payments on these notes are due semi-annually and principal payments are due from 2020 through 2026. At the time of the issuance of the last series of notes, certain terms and conditions of the note purchase and private shelf agreement were revised in coordination with the revision and expansion of the revolving credit agreement as discussed below in order to increase our leverage capacity.

At the beginning of fiscal 2016, we had a committed five-year revolving credit agreement expiring in May 2017, with a group of financial institutions in the amount of $200.0 million. On February 2, 2016, we and the group of financial institutions increased the revolving line of credit available under this agreement to $400.0 million and we borrowed $150.0 million as a source of financing for the purchase of GATR. In connection with this increase in the facility size, certain debt covenant definitions and limitations were modified to increase our leverage capacity. On August 11, 2016 we executed the Third Amended and Restated Credit Agreement (Revolving Credit Agreement) to extend the maturity to August 11, 2021, add a new financial institution to the group of creditors and amend certain terms and covenants. Borrowings under the agreement bear a variable rate of interest, which is calculated based upon the U.S. dollar LIBOR rate plus a contractually defined credit spread that is based upon the tenor of the specific borrowing. At September 30, 2016, the weighted average interest rate on outstanding borrowings under the Revolving Credit Agreement was 2.5%. Debt issuance costs of $2.3 million and $1.3 million were incurred in connection with February 2, 2016 and August 11, 2016 amendments to the Revolving Credit Agreement, respectively. Debt issuance costs are recorded in Prepaid expenses and other current assets on the Company’s consolidated balance sheets, and will be amortized as interest expense using the effective interest method over the stated term of the Revolving Credit Agreement. At September 30, 2016, the Company’s total debt issuance costs have an unamortized balance of $2.9 million. The available line of credit is reduced by any letters of credit issued under the Revolving Credit Agreement. As of September 30, 2016, there were borrowings totaling $240.0 million under this agreement and there were letters of credit outstanding totaling $20.7 million, which reduce the available line of credit to $139.3 million.

We have a secured letter of credit facility agreement with a bank (Secured Letter of Credit Facility) which is cancellable by us at any time upon the completion of certain conditions to the satisfaction of the bank. At September 30, 2016 there were letters of credit outstanding under this agreement of $62.7 million. Restricted cash at September 30, 2016 of $69.4 million was held on deposit in the U.K. as collateral in support of this Secured Letter of Credit Facility. We are required to leave the cash in the restricted account so long as the bank continues to maintain associated letters of credit under the facility. The maximum amount of letters of credit currently allowed by the facility is $63.1 million, and any increase above this amount would require bank approval and additional restricted funds to be placed on deposit. We may choose at any time to terminate the facility and move the associated letters of credit to another credit facility. Letters of credit outstanding under the Secured Letter of Credit Facility do not reduce the available line of credit under the Revolving Credit Agreement.

We maintain a cash account with a bank in the United Kingdom for which the funds are restricted as to use. The account is required to secure the customer’s interest in cash deposited in the account to fund our activities related to our performance under a fare collection services contract in the United Kingdom. The balance in the account as of September 30, 2016 was $6.2 million and is classified as restricted cash in our Consolidated Balance Sheet.

As of September 30, 2016, we had letters of credit and bank guarantees outstanding totaling $79.2 million, including the letters of credit outstanding under the Revolving Credit Agreement and the Secured Letter of Credit Facility, which guarantee either our performance or customer advances under certain contracts. In addition, we had financial letters of credit outstanding totaling $16.6 million as of September 30, 2016, which primarily guarantee our payment of certain self-insured liabilities. We have never had a drawing on a letter of credit instrument, nor are any anticipated; therefore, we estimate the fair value of these instruments to be zero.

We maintain short-term borrowing arrangements in New Zealand and Australia totaling $0.5 million New Zealand dollars (equivalent to approximately $0.4 million) and $3.0 million Australian dollars (equivalent to approximately $2.3 million) to help meet the short-term working capital requirements of our subsidiaries in those countries. At September 30, 2016, no amounts were outstanding under these borrowing arrangements.

The terms of certain of our lending and credit agreements include provisions that require and/or limit, among other financial ratios and measurements, the permitted levels of debt, coverage of cash interest expense, and under certain circumstances, payments of dividends or other distributions to shareholders. As of September 30, 2016, these agreements restrict such distributions to shareholders to a maximum of $48.7 million per fiscal year.

Our self-insurance arrangements are limited to certain workers’ compensation plans, automobile liability and product liability claims. Under these arrangements, we self-insure only up to the amount of a specified deductible for each claim. Self-insurance liabilities included in other current liabilities on the balance sheet amounted to $8.2 million and $8.8 million as of September 30, 2016 and 2015, respectively.