Note

Notes Payable, Long-Term Debt and Lines of Credit

Notes Payable

Notes payable were

$14,770

and

$31,468

December 1, 2018

and

December 2, 2017,

respectively. This amount mainly represents various foreign subsidiaries’ other short-term borrowings that were

not

part of committed lines. The weighted-average interest rates on short-term borrowings were

9.6

percent,

11.0

percent and

13.7

percent in

2018,

2017

and

2016,

respectively. Fair values of these short-term obligations approximate their carrying values due to their short maturity. There were

funds drawn from the short-term committed lines at

December 1, 2018.

Long-Term Debt
Long-Term Debt	Weighted-Average Interest Rate at December 1, 2018		Fiscal Year Maturity Date		Balance at December 1, 2018			Balance at December 2, 2017
Revolving credit facility		4.35%		2022	$	-		$	-
Term Loan B 1		4.18%		2024		1,964,250			2,150,000
Public Notes 2		4.11%		2027		300,000			300,000
Other, including debt issuance costs and discount						(31,493	)		(29,558	)
Total debt					$	2,232,757		$	2,420,442

Less: current maturities						(91,225	)		(21,515	)
Total long-term debt, excluding current maturities					$	2,141,532		$	2,398,927

Term Loan B, due on

October 20, 2024,

$2,150,000

variable rate at the London Interbank Offered Rate (LIBOR) plus

2.00

percent (

4.30

percent at

December 1, 2018);

$1,450,000

swapped to various fixed rates as detailed below

Public Notes, due

February 15, 2027,

$300,000

4.00

percent fixed;

$150,000

swapped to a variable rate of

-month LIBOR plus

1.86

percent

Term Loans

October 20, 2017,

we entered into a secured term loan credit agreement (“Term Loan B Credit Agreement”) with a consortium of financial institutions under which we established a

$2,150,000

term loan (“Term Loan B”) that we used to repay existing indebtedness, finance working capital needs, finance acquisitions, and for general corporate purposes. The Term Loan B Credit Agreement is secured by a security interest in substantially all of the personal property assets of the Company and each Guarantor, including

100%

of the equity interests in certain domestic subsidiaries and

65%

of the equity interests of

first

-tier foreign subsidiaries together with certain domestic material real property. At

December 1, 2018

a balance of

$1,964,250

was drawn on the Term Loan B. The interest rate on the Term Loan B is payable at the LIBOR rate plus

2.00

percent (

4.30

percent at

December 1, 2018).

The interest rate is based on a leverage grid. The Term Loan B Credit Agreement expires on

October 20, 2024.

March 26, 2018,

we entered into interest rate swap agreements to convert

$100,000

of our Term Loan B to a fixed interest rate of

4.312

percent. On

March 9, 2018,

we entered into an interest rate swap agreement to convert

$100,000

of our Term Loan B be to a fixed interest rate of

4.490

percent. On

February 27, 2018,

we entered into an interest rate swap agreement to convert

$200,000

of our Term Loan B to a fixed rate of

4.589

percent. On

October 20, 2017

we entered into interest rate swap agreements to convert

$1,050,000

of our Term Loan B to a fixed interest rate of

4.0275%.

See Note

for further discussion of these interest rate swaps.

We are subject to mandatory prepayments in the

first

quarter of each fiscal year equal to

50%

of Excess Cash Flow, as defined in the Term Loan B Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage (ECF Percentage) shall be reduced to

25%

when our Secured Leverage Ratio is below

4.25:1.00

and to

when our Secured Leverage Ratio is below

3.75:1.00.

The

first

measurement period is fiscal year

2018

and the

first

prepayment was satisfied through amounts prepaid during

2018.

We have estimated the

2019

prepayment as shown in the table above, and have classified it as current portion of long-term debt.

December 16, 2016

and

February 24, 2017

our Senior Notes, Series A and B matured, respectively. On

October 20, 2017

we repaid the Term Loan A and Senior Notes, Series C, D & E, with proceeds from the Term Loan B issuance. Interest rate swaps associated with Senior Notes, Series C and E, were terminated with the repayment of these instruments. We recognized a

$168

net gain related to the termination of these interest rate swaps which was recorded as other income, net in our Consolidated Statements of Income as of

December 2, 2017.

We paid a make whole premium of

$25,535

which was recorded as other expense, net in our Consolidated Statements of Income as of

December 2, 2017.

Proceeds from the issuance of the Term Loan B were also used to acquire Royal Adhesives. See Note

for further discussion of our acquisition of Royal Adhesives.

Public Notes

February 14, 2017,

we issued

$300,000

aggregate principal of

-year unsecured public notes (“Public Notes”) due

February 15, 2027

with a fixed coupon of

4.00

percent. Proceeds from this debt issuance were used to repay

$138,000

outstanding under the revolving credit facility at that time and prepay

$158,750

of our Term Loan A. On

February 14, 2017,

we entered into interest rate swap agreements to hedge

$150,000

of the

$300,000

Public Notes to a variable interest rate of

-month LIBOR plus

1.86

percent. As a result of applying the hypothetical derivative method of assessing hedge effectiveness in our fair value hedge accounting, the change in the fair value of the interest rate swap and an equivalent amount for the change in the fair value of the debt will be reflected in other income (expense), net. See Note

for further discussion of this interest rate swap.

Fair Value of Long-Term Debt

Long-term debt had an estimated fair value of

$2,123,447

and

$2,452,034

as of

December 1, 2018

and

December 2, 2017,

respectively. The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities. The estimated fair value of these long-term obligations is

not

necessarily indicative of the amount that would be realized in a current market exchange.

Long-term Debt Maturities

Maturities of long-term debt for the next

five

fiscal years follow:

Fiscal Year		2019				2020				2021				2022				2023				Thereafter
Long-term debt obligations		$	91,225			$	21,500			$	21,500			$	21,500			$	21,500			$	2,087,025

Revolving Credit Facility

September 29, 2017,

we amended our revolving credit facility to become effective with consummation of our acquisition of Royal Adhesives. The revolving credit facility is now secured along with the Term Loan B Credit Agreement, by a

first

-priority security interest in substantially all of the personal property assets of the Company and each Guarantor, including

100%

of the equity interests in certain domestic subsidiaries and

65%

of the equity interests of

first

-tier foreign subsidiaries. Interest on the revolving credit facility is payable at the LIBOR plus

2.00

percent (

4.35

percent at

December 1, 2018).

A facility fee of

0.30

percent of the unused commitment under the revolving credit facility is payable quarterly. The interest rates and the facility fee are based on a leverage grid. The revolving credit facility matures

April 12, 2022.

As of

December 1, 2018,

amounts related to our revolving credit facility was as follows:

		Committed				Drawn				Unused
Revolving credit facility		$	400,000			$	-			$	393,955

The secured, multi-currency revolving credit facility can be drawn upon for general corporate purposes up to a maximum of

$400,000,

less issued letters of credit. At

December 1, 2018,

letters of credit reduced the available amount under the revolving credit facility by

$6,045.

The credit agreement expires on

April 12, 2022.

Covenants

The secured Term Loan B Credit Agreement and secured revolving credit facility are subject to certain covenants and restrictions. Restrictive covenants include, but are

not

limited to, limitations on secured and unsecured borrowings, intercompany transfers and investments,

third

party investments, dispositions of assets, leases, liens, dividends and distributions, and contains a maximum secured debt to trailing

twelve

months EBITDA requirement. Certain covenants becomes less restrictive after meeting leverage or other financial ratios. In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries. At

December 1, 2018

and

December 2, 2017

all financial covenants were met.