Long-Term Debt

9 Months Ended

Jul. 31, 2012

Long-Term Debt [Abstract]

LONG-TERM DEBT

NOTE 9 — LONG-TERM DEBT

Long-term debt is summarized as follows (Dollars in millions):

	July 31, 2012			October 31, 2011
Credit Agreement	$	288.9		$	355.4
Senior Notes due 2017		302.4			302.9
Senior Notes due 2019		243.4			242.9
Senior Notes due 2021		245.7			280.2
Trade accounts receivable credit facility		130.0			130.0
Other long-term debt		9.7			46.2
		1,220.1			1,357.6
Less current portion		(21.9	)		(12.5	)
Long-term debt	$	1,198.2		$	1,345.1

Credit Agreement

On October 29, 2010, the Company entered into a $1.0 billion senior secured credit facility pursuant to an Amended and Restated Credit Agreement with a syndicate of financial institutions (the “Credit Agreement”). The Credit Agreement provides for a $750 million revolving multicurrency credit facility and a $250 million term loan, both expiring October 29, 2015, with an option to add $250 million to the facilities with the agreement of the lenders. The $250 million term loan is scheduled to amortize by $3.1 million each quarter-end for the first eight quarters, $6.3 million each quarter-end for the next eleven quarters and the remaining balance due on the maturity date.

The Credit Agreement is available to fund ongoing working capital and capital expenditure needs, for general corporate purposes and to finance acquisitions. Interest is based on a Eurodollar rate or a base rate that resets periodically plus a calculated margin amount. As of July 31, 2012, $288.9 million was outstanding under the Credit Agreement. The current portion of the Credit Agreement was $21.9 million and the long-term portion was $267.0 million. The weighted average interest rate on the Credit Agreement was 2.18% for the nine months ended July 31, 2012 and 2.13% as of July 31, 2011.

The Credit Agreement contains financial covenants that require the Company to maintain a certain leverage ratio and a fixed charge coverage ratio. As of July 31, 2012, the Company was in compliance with these covenants.

Senior Notes due 2017

On February 9, 2007, the Company issued $300.0 million of 6.75% Senior Notes due February 1, 2017. Interest on these Senior Notes is payable semi-annually. Proceeds from the issuance of these Senior Notes were principally used to fund the purchase of previously outstanding 8.875% Senior Subordinated Notes in a tender offer and for general corporate purposes.

The fair value of the Senior Notes due 2017 was $328.7 million as of July 31, 2012 based upon observable market prices, which are considered level 2 inputs. The indenture pursuant to which these Senior Notes were issued contains certain covenants. As of July 31, 2012, the Company was in compliance with these covenants.

Senior Notes due 2019

On July 28, 2009, the Company issued $250.0 million of 7.75% Senior Notes due August 1, 2019. Interest on these Senior Notes is payable semi-annually. Proceeds from the issuance of these Senior Notes were principally used for general corporate purposes, including the repayment of amounts outstanding under the Company’s revolving multicurrency credit facility, without any permanent reduction of the commitments.

The fair value of the Senior Notes due 2019 was $285.0 million as of July 31, 2012, based upon observable market prices, which are considered level 2 inputs. The indenture pursuant to which these Senior Notes were issued contains certain covenants. As of July 31, 2012, the Company was in compliance with these covenants.

Senior Notes due 2021

On July 15, 2011, Greif, Inc.’s wholly-owned Luxembourg subsidiary, Greif Luxembourg Finance S.C.A., issued €200.0 million of 7.375% Senior Notes due July 15, 2021. These Senior Notes are fully and unconditionally guaranteed on a senior basis by Greif, Inc. Interest on these Senior Notes is payable semi-annually. A portion of the proceeds from the issuance of these Senior Notes was used to repay non-U.S. borrowings under the Credit Agreement, without any permanent reduction of the commitments, and the remaining proceeds are available for general corporate purposes, including the financing of acquisitions.

The fair value of the Senior Notes due 2021 was $261.6 million as of July 31, 2012, based upon observable market prices, which are considered level 2 inputs. The indenture pursuant to which these Senior Notes were issued contains certain covenants. As of July 31, 2012, the Company was in compliance with these covenants.

United States Trade Accounts Receivable Credit Facility

On December 8, 2008, the Company entered into a trade accounts receivable credit facility with a financial institution. This facility was amended on September 19, 2011, which decreased the amount available to the borrowers from $135.0 million to $130.0 million and extended the termination date of the commitment to September 19, 2014. The credit facility is secured by certain of the Company’s trade accounts receivable in the United States and bears interest at a variable rate based on the London Interbank Offered Rate (“LIBOR”) plus a margin or other agreed-upon rate (1.00% as of July 31, 2012). In addition, the Company can terminate the credit facility at any time upon five days prior written notice. A significant portion of the initial proceeds from this credit facility was used to pay the obligations under the previous trade accounts receivable credit facility, which was terminated. The remaining proceeds were and will be used to pay certain fees, costs and expenses incurred in connection with the credit facility and for working capital and general corporate purposes. As of July 31, 2012, there was $130.0 million outstanding under the credit facility. The agreement for this credit facility contains financial covenants that require the Company to maintain a certain leverage ratio and a fixed charge coverage ratio. As of July 31, 2012, the Company was in compliance with these covenants.

Greif Receivables Funding LLC (“GRF”), an indirect subsidiary of the Company, has participated in the purchase and transfer of receivables in connection with these credit facilities and is included in the Company’s consolidated financial statements. However, because GRF is a separate and distinct legal entity from the Company and its other subsidiaries, the assets of GRF are not available to satisfy the liabilities and obligations of Greif, Inc. and its other subsidiaries, and the liabilities of GRF are not the liabilities or obligations of Greif, Inc. and its other subsidiaries. This entity purchases and services the Company’s trade accounts receivable that are subject to this credit facility.

Other

In addition to the amounts borrowed under the Credit Agreement and proceeds from the Senior Notes and the United States Trade Accounts Receivable Credit Facility, as of July 31, 2012, the Company had outstanding other debt of $107.1 million, comprised of $9.7 million in long-term debt and $97.4 million in short-term borrowings, compared to other debt outstanding of $183.5 million, comprised of $46.2 million in long-term debt and $137.3 million in short-term borrowings, as of October 31, 2011.

As of July 31, 2012, the current portion of the Company’s long-term debt was $21.9 million. Annual maturities, including the current portion, of long-term debt under the Company’s various financing arrangements were $3.1 million in 2012, $34.7 million in 2013, $25.0 million in 2014, $365.7 million in 2015, $302.4 million in 2017 and $489.2 million thereafter.

As of July 31, 2012 and October 31, 2011, the Company had deferred financing fees and debt issuance costs of $20.1 million and $18.9 million, respectively, which are included in other long-term assets.