Financing Agreements

12 Months Ended

Sep. 30, 2019

Total debt consists of the following:



	September 30, 2019		September 30, 2018
Current portion of long-term debt (including the Senior unsecured 5.75% notes due on September 1, 2023)	$	471.7	$	0.1
Securitization Facility	110.0		110.0
Note Securitization Facility	78.7		72.4
Total Short-term borrowings	$	660.4	$	182.5

Revolving credit facility, matures August 2024	$	80.0	$	—
Senior secured Term Loan A, long-term-portion, matures August 2024	944.0		1,029.7
Senior unsecured 5.75% notes due on September 1, 2023	—		420.8
Senior unsecured 5.00% notes due on February 15, 2025	296.9		296.4
Senior unsecured 4.375% notes due on September 15, 2027	418.7		—
Unsecured 7.00% debentures due on February 15, 2024	13.5		13.6
Unsecured 6.75% debentures due on December 15, 2027	29.7		29.5
Other	0.3		0.4
Total Long-term debt	1,783.1		1,790.4
Total debt	$	2,443.5	$	1,972.9

In May 2019, we renewed our 364-day accounts receivable securitization facility (the “Securitization Facility”) with certain financial institutions for borrowings up to $110.0 million. We also renewed our 364-day note securitization facility for borrowings up to $90.0 million (the “Note Securitization Facility”) in May 2019. Under the terms of each of the Securitization Facility and Note Securitization Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount of permissible borrowings outstanding is determined based on the amount of qualifying accounts receivable at any point in time. As of September 30, 2019, $110.0 million and $78.7 million was borrowed under the Securitization Facility and Note Securitization Facility, respectively. Borrowings outstanding under the Securitization Facility and Note Securitization Facility bear interest at the London Interbank Offered Rate (“LIBOR”) plus the applicable margin of 0.8% and 1.0% and are included as a component of Short-term borrowings, while the accounts receivable securing these obligations remain as a component of Trade accounts receivable, net of allowances, in our Consolidated Balance Sheets. In addition, the agreements governing the Securitization Facility and Note Securitization Facility contain various customary affirmative and negative covenants, and customary default and termination provisions. As of September 30, 2019, we were in compliance with these covenants.

In August 2019, we entered into a senior credit agreement (the ‘‘New Credit Agreement’’) for purposes of refinancing our then-existing senior secured credit facilities maturing in 2021 (the ‘‘Prior Senior Secured Credit Facilities’’). The Prior Senior Secured Credit Facilities consisted of a senior secured term loan facility (‘‘2021 TLA Facility’’) with an original principal amount of $1,462.5 million and a Senior Secured Revolving Credit Facility (‘‘2021 Revolving Credit Facility’’) providing borrowing capacity of up to $700.0 million, both maturing in September 2021. In fiscal 2019, we paid the outstanding balance of $1,038.4 million on the 2021 TLA Facility. We capitalized debt issuance costs of $2.5 million in connection with the 2024 TLA Facility and $3.7 million in connection with the 2024 Revolving Credit Facility.

In conjunction with the refinancing of the Prior Senior Secured Credit Facilities, we recorded $3.3 million in Loss on extinguishment of debt primarily related to the debt issuance costs previously capitalized for the 2021 TLA Facility in fiscal 2019.

The New Credit Agreement consists of two facilities as follows:


•	$1,000.0 million senior secured Term Loan A facility, maturing in August 2024 (“2024 TLA Facility”)


•	Revolving Credit Facility, providing borrowing capacity of up to $1,200.0 million, maturing in August 2024 (‘‘2024 Revolving Credit Facility’’)

The 2024 TLA Facility and 2024 Revolving Credit Facility bear interest at variable rates which currently approximate 3.4%. These interest rates are based primarily on LIBOR, but under certain conditions could also be based on the U.S. Federal Funds Rate or the U.S. Prime Rate, at our option. We are able to voluntarily prepay outstanding loans under the TLA Facility at any time. In fiscal 2019, we made no payments on the 2024 TLA Facility. In fiscal 2018, we made payments of $350.9 million on the 2021 TLA Facility, including the required minimum $146.3 million.

The following table summarizes the maturities of the 2024 TLA Facility for fiscal 2020 through 2024:



	Amount
2020	$	50.0
2021	50.0
2022	50.0
2023	75.0
2024	775.0

As of September 30, 2019, there were $80.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,112.8 million after giving effect to $7.2 million of outstanding standby letters of credit. The availability of borrowings under our Revolving Credit Facility is subject to our ability at the time of borrowing to meet certain specified conditions, including compliance with covenants contained in the Senior Credit Agreement.

The facilities provided by the New Credit Agreement are held with a syndicate of banks, which includes approximately 13 institutions. Our general corporate assets, with exceptions, including those of certain of our subsidiaries, collateralize these obligations. The New Credit Agreement contains financial covenants which specify a maximum secured net leverage ratio and a minimum interest coverage ratio, which are defined in the New Credit Agreement. These financial covenants are measured at the end of each quarter. For the fiscal 2019 and thereafter, the required maximum secured net leverage ratio is 3.00x and the required minimum interest coverage ratio is 4.00x. We were in compliance with all financial covenants under our financing agreements as of September 30, 2019.

In September 2019, we issued senior unsecured notes of $425.0 million maturing September 2027 that bear interest at a fixed rate of 4.375% annually and capitalized debt issuance costs of $6.3 million. On October 7, 2019, we used the net proceeds from the offering of these notes, together with funds borrowed from the 2024 Revolving Credit Facility, to redeem all of our previously outstanding senior unsecured 5.75% notes due September 2023 (the “2023 Notes”) and pay the prepayment premium of $12.2 million. The 30-day notice required to redeem the 2023 Notes was filed on September 7, 2019 and, as a result, the outstanding liability of $421.6 million as of September 30, 2019 has been classified as current within short-term borrowings. In October 2019, we recorded a loss on extinguishment of debt of $15.6 million, which was comprised of a $12.2 million prepayment premium and $3.4 million of debt issuance costs previously capitalized.

In February 2017, we entered into $300.0 million of senior unsecured notes maturing February 2025 for purposes of financing the Mortara acquisition. These notes bear interest at a fixed rate of 5.00% annually. Collectively, the 4.375% and 5.00% notes are referred to herein as “Senior Notes.” The Senior Notes were issued at par in private placement offerings and are not registered securities on any public market. We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes, other than in certain circumstances such as a change in control or material sale of assets. We may redeem the 4.375% and 5.00% notes prior to maturity, but doing so would require payment of a premium on any amounts redeemed, the amount of which varies based on the timing of the redemption. The indentures governing the Senior Notes contain certain covenants which impose limitations on the amount of dividends we may pay and the amount of common shares we may repurchase in the open market, but we do not expect these covenants to affect our current dividend policy or open share repurchase program. The terms of these indentures also impose certain restrictions on the amount and type of additional indebtedness we may obtain in the future, as well as the types of liens and guarantees we may provide.

The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our variable rate short-term debt instruments and 2024 Revolving Credit Facility approximate fair value.

The estimated fair values of our long-term debt instruments are described in the table below:



	September 30, 2019		September 30, 2018
Senior secured Term Loan A	$	918.2	$	991.9
Senior unsecured 5.75% notes due on September 1, 2023	—		437.3
Senior unsecured 5.00% notes due on February 14, 2025	312.4		294.0
Senior unsecured 4.375% notes due on September 15, 2027	435.4		—
Unsecured debentures	48.1		42.9
Total	$	1,714.1	$	1,766.1

The estimated fair values of our long-term unsecured debentures were based on observable inputs such as quoted prices in markets that are not active. The estimated fair values of our term loans and the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements were classified as Level 2, as described in Note 1.