LONG-TERM DEBT (Tables)

9 Months Ended

Jun. 30, 2016



		At June 30, 2016														At September 30, 2015
		Outstanding Balance			Original Issuer Discount			Capitalized Fees & Expenses			Balance Sheet			Coupon Interest Rate (1)		Outstanding Balance			Original Issuer Discount			Capitalized Fees & Expenses			Balance Sheet			Coupon Interest Rate (1)
Senior notes due 2022	(a)	$	725,000		$	(1,514	)	$	(10,252	)	$	713,234		5.25	%	$	600,000		$	—		$	(8,264	)	$	591,736		5.25	%
Revolver due 2021	(b)	—			—			(2,583		)	(2,583		)	n/a		35,000			—			(2,049		)	32,951			n/a
Convert. debt due 2017	(c)	100,000			(2,374		)	(238		)	97,388			4.00	%	100,000			(5,594		)	(571		)	93,835			4.00	%
Real estate mortgages	(d)	38,533			—			(622		)	37,911			n/a		32,280			—			(470		)	31,810			n/a
ESOP Loans	(e)	35,092			—			(171		)	34,921			n/a		36,744			—			(224		)	36,520			n/a
Capital lease - real estate	(f)	6,722			—			(137		)	6,585			5.00	%	7,524			—			(156		)	7,368			5.00	%
Non U.S. lines of credit	(g)	6,078			—			(5		)	6,073			n/a		8,934			—			(3		)	8,931			n/a
Non U.S. term loans	(g)	34,723			—			(166		)	34,557			n/a		39,142			—			(299		)	38,843			n/a
Other long term debt	(h)	3,550			—			(22		)	3,528			n/a		1,575			—			—			1,575			n/a
Totals		949,698			(3,888		)	(14,196		)	931,614					861,199			(5,594		)	(12,036		)	843,569
less: Current portion		(17,776		)	—			—			(17,776		)			(16,593		)	—			—			(16,593		)
Long-term debt		$	931,922		$	(3,888	)	$	(14,196	)	$	913,838				$	844,606		$	(5,594	)	$	(12,036	)	$	826,976

$600,000 5.25% senior notes due 2022, at par, which was completed on February 27, 2014 (collectively the “Senior Notes”). As of May 18, 2016, outstanding Senior Notes due totaled $725,000; interest is payable semi-annually on March 1 and September 1. The net proceeds of the add-on offering were used to pay down outstanding borrowings under Griffon's Revolving Credit Facility (the "Credit Agreement"). In connection with the issuance and exchange of the $125,000 senior notes, Griffon capitalized $3,016 of underwriting fees and other expenses in the quarter, which will amortize over the term of such notes; Griffon capitalized $10,313 in connection with the previously issued $600,000 senior notes.

The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. On July 20, 2016 and June 18, 2014, Griffon exchanged all of the $125,000, and $600,000 Senior Notes, respectively, for substantially identical Senior Notes registered under the Securities Act of 1933 via an exchange offer. The fair value of the Senior Notes approximated $703,250 on June 30, 2016 based upon quoted market prices (level 1 inputs).

(b)

On March 22, 2016, Griffon amended the Credit Agreement to increase the maximum borrowing availability from $250,000 to $350,000, extend its maturity date from March 13, 2020 to March 22, 2021 and modified certain other provisions of the facility. The facility includes a letter of credit sub-facility with a limit of $50,000 and a multi-currency sub-facility of $50,000. The Credit Agreement provides for same day borrowings of base rate loans. Borrowings under the Credit Agreement may be repaid and re-borrowed at any time, subject to final maturity of the facility or the occurrence of an event of default under the Credit Agreement. Interest is payable on borrowings at either a LIBOR or base rate benchmark rate, in each case without a floor, plus an applicable margin, which adjusts based on financial performance. Current margins are 1.25% for base rate loans and 2.25% for LIBOR loans. The Credit Agreement has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio, as well as customary affirmative and negative covenants, and events of default. The negative covenants place limits on Griffon's ability to, among other things, incur indebtedness, incur liens, and make restricted payments and investments. Borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors, and a pledge of not greater than 65% of the equity interest in Griffon’s material, first-tier foreign subsidiaries (except that a lien on the assets of Griffon's material domestic subsidiaries securing a limited amount of the debt under the credit agreement relating to Griffon's Employee Stock Ownership Plan ("ESOP") ranks pari passu with the lien granted on such assets under the Credit Agreement; see footnote (e) below). At June 30, 2016, there were no outstanding borrowings and standby letters of credit were $15,794 under the Credit Agreement; $334,206 was available, subject to certain loan covenants, for borrowing at that date.

(c)

On December 21, 2009, Griffon issued $100,000 principal amount of 4% convertible subordinated notes due 2017 (the “2017 Notes”). The current conversion rate of the 2017 Notes is 70.1632 shares of Griffon’s common stock per $1 principal amount of notes, corresponding to a conversion price of $14.25 per share. Since July 15, 2016, any holder has had the option to convert such holder's notes. Under the terms of the 2017 Notes, Griffon has the right to settle the conversion of the 2017 Notes in cash, stock or a combination of cash and stock. On July 14, 2016, Griffon announced that it will settle, upon conversion, up to $125,000 of the conversion value of the 2017 Notes in cash, with amounts in excess of $125,000, if any, to be settled in shares of Griffon common stock. When a cash dividend is declared that would result in an adjustment to the conversion ratio of less than 1%, any adjustment to the conversion ratio is deferred until the first to occur of (i) actual conversion; (ii) the 42nd trading day prior to maturity of the notes; and (iii) such time as the cumulative adjustment equals or exceeds 1%. At both June 30, 2016 and 2015, the 2017 Notes had a capital in excess of par component, net of tax, of $15,720. The fair value of the 2017 Notes approximated $121,438 on June 30, 2016 based upon quoted market prices (level 1 inputs). These notes are classified as long term debt as Griffon has the intent and ability to refinance the principal amount of the notes, including with borrowings under the Credit Agreement.

(d)

In September 2015 and March 2016, Griffon entered into mortgage loans in the amounts of $32,280 and $8,000, respectively. The mortgage loans are secured by four properties occupied by Griffon's subsidiaries. The loans mature in September 2025 and April 2018, respectively, are collateralized by the specific properties financed and are guaranteed by Griffon. The loans bear interest at a rate of LIBOR plus 1.50%. At June 30, 2016, $37,913 was outstanding, net of issuance costs.

(e)

In December 2013, Griffon’s ESOP entered into an agreement that refinanced the two existing ESOP loans into one new Term Loan in the amount of $21,098 (the "Agreement"). The Agreement also provided for a Line Note with $10,000 available to purchase shares of Griffon common stock in the open market. In July 2014, Griffon's ESOP entered into an amendment to the existing Agreement which provided an additional $10,000 Line Note available to purchase shares in the open market. During 2014, the Line Notes were combined with the Term Loan to form one new Term Loan. The Term Loan bears interest at LIBOR plus 2.38% or the lender’s prime rate, at Griffon’s option. The Term Loan requires quarterly principal payments of $551, with a balloon payment of approximately $30,137 due at maturity on December 31, 2018. During 2014, 1,591,117 shares of Griffon common stock, for a total of $20,000 or $12.57 per share, were purchased with proceeds from the Line Notes. As of June 30, 2016, $34,921, net of issuance costs, was outstanding under the Term Loan. The Term Loan is secured by shares purchased with the proceeds of the loan and with a lien on a specific amount of Griffon assets (which lien ranks pari passu with the lien granted on such assets under the Credit Agreement) and is guaranteed by Griffon.


(f)	In October 2006, CBP entered into a capital lease totaling $14,290 for real estate in Troy, Ohio. The lease matures in 2022, bears interest at a fixed rate of 5.0%, is secured by a mortgage on the real estate and is guaranteed by Griffon. At June 30, 2016, $6,585 was outstanding, net of issuance costs.

(g)

In September 2015, Clopay Europe GmbH (“Clopay Europe”) entered into a EUR 5,000 ($5,541 as of June 30, 2016) revolving credit facility and EUR 15,000 term loan. The term loan is payable in twelve quarterly installments of EUR 1,250, bears interest at a fixed rate of 2.5% and matures in September 2018. The revolving facility matures in September 2016, but is renewable upon mutual agreement with the bank. The revolving credit facility accrues interest at EURIBOR plus 1.75% per annum (1.75% at June 30, 2016). The revolver and the term loan are both secured by substantially all of the assets of Clopay Europe and its subsidiaries. Griffon guarantees the revolving facility and term loan. The term loan has an outstanding balance of EUR 11,250 ($12,469 at June 30, 2016) and the revolver had no borrowings outstanding at June 30, 2016. Clopay Europe is required to maintain a certain minimum equity to assets ratio and is subject to a maximum debt leverage ratio (defined as the ratio of total debt to EBITDA).

Clopay do Brazil maintains lines of credit of R$12,800 ($3,738 as of June 30, 2016). Interest on borrowings accrues at a rate of Brazilian CDI plus 6.0% (20.13% at June 30, 2016). At June 30, 2016 there was approximately R$7,175($2,235 as of June 30, 2016) borrowed under the lines. PPC guarantees the lines.

In November 2012, Garant G.P. (“Garant”) entered into a CAD $15,000 ($11,534 as of June 30, 2016) revolving credit facility. The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3% per annum (1.95% LIBOR USD and 2.10% Bankers Acceptance Rate CDN as of June 30, 2016). The revolving facility matures in October 2016. This facility is classified as long term debt as Griffon has the intent and ability to refinance the borrowings. Garant is required to maintain a certain minimum equity. At June 30, 2016, there was CAD $3,068 ($2,359 as of June 30, 2016) borrowed under the revolving credit facility with CAD $11,932 ($9,175 as of June 30, 2016) available for borrowing.

In December 2013 and May 2014, Griffon Australia Holdings Pty Ltd ("Griffon Australia"; formerly known as Northcote Holdings Australia Pty Ltd) entered into two unsecured term loans in the outstanding amounts of AUD 12,500 and AUD 20,000, respectively. The AUD 12,500 term loan required quarterly interest payments with principal due upon maturity in December 2016. As of June 30, 2016, this loan was classified as long term debt as Griffon had the intent and ability to refinance the principal amount. The AUD 20,000 term loan required quarterly principal payments of AUD 625, with a balloon payment due upon maturity in May 2017. The loans accrued interest at Bank Bill Swap Bid Rate “BBSY” plus 2.8% per annum (4.79% at June 30, 2016 for each loan). As of June 30, 2016, Griffon had an outstanding combined balance of AUD $30,000 ($22,254 as of June 30, 2016) on the term loans.

A subsidiary of Northcote Holdings Pty Ltd also maintains a line of credit of AUD 5,000 ($3,709 as of June 30, 2016), which accrues interest at BBSY plus 2.50% per annum (4.49% at June 30, 2016). At June 30, 2016, there were AUD 2,000 ($1,484 as of June 30, 2016) outstanding under the line. The assets of a subsidiary of Northcote Holdings Pty Ltd secures the AUD 5,000 line of credit.

In July 2016, Griffon Australia and its Australian subsidiaries entered into an AUD 10,000 revolver and an AUD 30,000 term loan. The term loan refinanced the two existing term loans referred to above. The term loan requires quarterly principal payments of AUD 750 plus interest with a balloon payment of AUD 21,000 due upon maturity in June 2019, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 2.25% per annum. The revolving facility matures in June 2017 but is renewable upon mutual agreement with the bank, and accrues interest at BBSY plus 2.0% per annum. The revolver and the term loan are both secured by substantially all of the assets of Griffon Australia and its subsidiaries. Griffon guarantees the term loan. Griffon Australia is required to maintain a certain minimum equity level and is subject to a maximum leverage ratio and a minimum fixed charges cover ratio.


(h)	Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority with the balance consisting of capital leases.

At June 30, 2016, Griffon

Schedule of Interest Expense For Long Term Debt



		Three Months Ended June 30, 2016												Three Months Ended June 30, 2015
		Effective Interest Rate (1)		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense			Effective Interest Rate (1)		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2022	(a)	5.5	%	8,641			36		383		9,060			5.5%		7,875			—		323		8,198
Revolver due 2021	(b)	n/a		660			—		137		797			n/a		761			—		116		877
Convert. debt due 2017	(c)	9.1	%	1,000			1,093		111		2,204			9.1	%	1,000			1,004		111		2,115
Real estate mortgages	(d)	2.3	%	194			—		26		220			3.8	%	117			—		36		153
ESOP Loans	(e)	3.3	%	274			—		18		292			2.9	%	255			—		17		272
Capital lease - real estate	(f)	5.4	%	87			—		6		93			5.3	%	100			—		6		106
Non U.S. lines of credit	(g)	n/a		367			—		23		390			n/a		195			—		—		195
Non U.S. term loans	(g)	n/a		276			—		53		329			n/a		324			—		14		338
Other long term debt	(h)	n/a		97			—		—		97			n/a		12			—		1		13
Capitalized interest				(443		)	—		—		(443		)			(98		)	—		—		(98		)
Totals				$	11,153		$	1,129	$	757	$	13,039				$	10,541		$	1,004	$	624	$	12,169

(1) n/a = not applicable



		Nine Months Ended June 30, 2016												Nine Months Ended June 30, 2015
		Effective Interest Rate (1)		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense			Effective Interest Rate (1)		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2022	(a)	5.5	%	24,391			36		1,028		25,455			5.5	%	23,625			—		967		24,592
Revolver due 2021	(b)	n/a		2,185			—		374		2,559			n/a		1,758			—		407		2,165
Convert. debt due 2017	(c)	9.0	%	3,000			3,220		333		6,553			9.2	%	3,000			2,956		332		6,288
Real estate mortgages	(d)	2.2	%	499			—		55		554			3.8	%	357			—		108		465
ESOP Loans	(e)	3.2	%	805			—		53		858			2.9	%	769			—		52		821
Capital lease - real estate	(f)	5.4	%	270			—		19		289			5.3	%	308			—		19		327
Non U.S. lines of credit	(g)	n/a		723			—		69		792			n/a		445			—		—		445
Non U.S. term loans	(g)	n/a		832			—		79		911			n/a		1,049			—		44		1,093
Other long term debt	(h)	n/a		195			—		—		195			n/a		65			—		9		74
Capitalized interest				(717		)	—		5		(712		)			(335		)	—		—		(335		)
Totals				$	32,183		$	3,256	$	2,015	$	37,454				$	31,041		$	2,956	$	1,938	$	35,935

(b)

(c)

(d)

(e)


(f)	In October 2006, CBP entered into a capital lease totaling $14,290 for real estate in Troy, Ohio. The lease matures in 2022, bears interest at a fixed rate of 5.0%, is secured by a mortgage on the real estate and is guaranteed by Griffon. At June 30, 2016, $6,585 was outstanding, net of issuance costs.

(g)


(h)	Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority with the balance consisting of capital leases.

At June 30, 2016, Griffon