LONG-TERM DEBT

9 Months Ended

Jun. 30, 2019



		At June 30, 2019													At September 30, 2018
		Outstanding Balance			Original Issuer Premium		Capitalized Fees & Expenses			Balance Sheet			Coupon Interest Rate		Outstanding Balance			Original Issuer Premium		Capitalized Fees & Expenses			Balance Sheet			Coupon Interest Rate
Senior notes due 2022	(a)	$	1,000,000		$	955	$	(10,116	)	$	990,839		5.25	%	$	1,000,000		$	1,220	$	(12,968	)	$	988,252		5.25	%
Revolver due 2021	(b)	122,806			—		(1,463		)	121,343			Variable		25,000			—		(1,413		)	23,587			Variable
ESOP Loans	(d)	—			—		—			—			Variable		34,694			—		(186		)	34,508			Variable
Capital lease - real estate	(e)	5,185			—		(61		)	5,124			5.00	%	7,503			—		(80		)	7,423			5.00	%
Non US lines of credit	(f)	8,443			—		(5		)	8,438			Variable		7,951			—		(16		)	7,935			Variable
Non US term loans	(f)	39,617			—		(213		)	39,404			Variable		53,533			—		(148		)	53,385			Variable
Other long term debt	(g)	5,375			—		(18		)	5,357			Variable		6,011			—		(19		)	5,992			Variable
Totals		1,181,426			955		(11,876		)	1,170,505					1,134,692			1,220		(14,830		)	1,121,082
less: Current portion		(10,884		)	—		—			(10,884		)			(13,011		)	—		—			(13,011		)
Long-term debt		$	1,170,542		$	955	$	(11,876	)	$	1,159,621				$	1,121,681		$	1,220	$	(14,830	)	$	1,108,071



		Three Months Ended June 30, 2019												Three Months Ended June 30, 2018
		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 Premium		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2022	(a)	5.7	%	$	13,125		$	68	$	950	$	14,143		5.7	%	$	13,125		$	67	$	957	$	14,149
Revolver due 2021	(b)	Variable		2,282			—		220		2,502			Variable		1,239			—		141		1,380
Real estate mortgages	(c)	n/a		—			—		—		—			n/a		—			—		—		—
ESOP Loans	(d)	n/a		—			—		—		—			5.5	%	472			—		31		503
Capital lease - real estate	(e)	5.6	%	78			—		7		85			5.6	%	42			—		6		48
Non US lines of credit	(f)	Variable		4			—		3		7			Variable		22			—		4		26
Non US term loans	(f)	Variable		376			—		44		420			Variable		338			—		18		356
Other long term debt	(g)	Variable		149			—		—		149			Variable		33			—		1		34
Capitalized interest				(18		)	—		—		(18		)			(168		)	—		—		(168		)
Totals				$	15,996		$	68	$	1,224	$	17,288				$	15,103		$	67	$	1,158	$	16,328

(1) n/a = not applicable



		Nine Months Ended June 30, 2019												Nine Months Ended June 30, 2018
		Effective Interest Rate (1)		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense			Effective Interest Rate		Cash Interest			Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2022	(a)	5.7	%	39,375			202		2,852		42,429			5.7	%	39,375			202		2,839		42,416
Revolver due 2021	(b)	Variable		4,846			—		761		5,607			Variable		3,517			—		422		3,939
Real estate mortgages	(c)	n/a		—			—		—		—			n/a		351			—		320		671
ESOP Loans	(d)	6.6	%	937			—		186		1,123			4.7	%	1,327			—		93		1,420
Capital lease - real estate	(e)	5.5	%	294			—		19		313			5.5	%	533			—		19		552
Non US lines of credit	(f)	Variable		15			—		11		26			Variable		33			—		11		44
Non US term loans	(f)	Variable		1,273			—		97		1,370			Variable		1,002			—		69		1,071
Other long term debt	(g)	Variable		478			—		6		484			Variable		262			—		4		266
Capitalized interest				(18		)	—		—		(18		)			(406		)	—		—		(406		)
Totals				$	47,200		$	202	$	3,932	$	51,334				$	45,994		$	202	$	3,777	$	49,973

(a)

On October 2, 2017, in an unregistered offering through a private placement under Rule 144A, Griffon completed the add-on offering of $275,000 principal amount of its 5.25% senior notes due 2022, at 101.00% of par, to Griffon's previously issued $125,000 principal amount of its 5.25% senior notes due 2022, at 98.76% of par, completed on May 18, 2016 and $600,000 5.25% senior notes due 2022, at par, completed on February 27, 2014 (collectively the “Senior Notes”). As of June 30, 2019, outstanding Senior Notes due totaled $1,000,000; interest is payable semi-annually on March 1 and September 1. The net proceeds of the $275,000 add-on offering were used to acquire ClosetMaid with the remaining proceeds used to pay down outstanding loan borrowings under Griffon's Revolving Credit Facility (the "Credit Agreement"). The net proceeds of the previously issued $125,000 add-on offering were used to pay down outstanding revolving loan borrowings under the Credit Agreement.

The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. On February 5, 2018, July 20, 2016 and June 18, 2014, Griffon exchanged all of the $275,000, $125,000 and $600,000 Senior Notes, respectively, for substantially identical Senior Notes registered under the Securities Act via an exchange offer. The fair value of the Senior Notes approximated $998,800 on June 30, 2019 based upon quoted market prices (level 1 inputs). In connection with the issuance and exchange of the $275,000 senior notes, Griffon capitalized $8,472 of underwriting fees and other expenses; this is in addition to the $13,329 capitalized under previously issued $725,000 Senior Notes. All capitalized fees for the Senior Notes will amortize over the term of the notes and, at June 30, 2019, $10,116 remained to be amortized.

(b)

On March 22, 2016, Griffon amended the Credit Agreement to increase the commitments under the credit facility from $250,000 to $350,000, extend its maturity date from March 13, 2020 to March 22, 2021 and modify certain other provisions of the facility. On October 2, 2017 and on May 31, 2018, Griffon amended the Credit Agreement in connection with the ClosetMaid and CornellCookson acquisitions, respectively to, among other things, modify the net leverage covenant. On February 22, 2019, Griffon further amended the Revolving Credit Facility to, among other things, reflect changes in the lending group and certain corresponding changes in various administrative roles under the Revolving Credit Facility, make conforming administrative and technical changes and reflect changes in law. The facility includes a letter of credit sub-facility with a limit of $50,000 and a multi-currency sub-facility of $100,000. 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 1.75% for base rate loans and 2.75% 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. At June 30, 2019, under the Credit Agreement, there were $122,806 of outstanding borrowings; outstanding standby letters of credit were $20,628; and $206,566 was available, subject to certain loan covenants, for borrowing at that date.

(c)

In September 2015 and March 2016, Griffon entered into mortgage loans in the amounts of $32,280 and $8,000, respectively, and were due to mature in September 2025 and April 2018, respectively. The mortgage loans were secured and collateralized by four properties occupied by Griffon's subsidiaries and were guaranteed by Griffon. The loans had an interest rate of LIBOR plus 1.50%. The loans were paid off during the year ended September 30, 2018.

(d)

In August 2016, Griffon’s ESOP entered into an agreement that refinanced the existing ESOP loan into a new Term Loan in the amount of $35,092 (the "Agreement"). The Agreement also provided for a Line Note with $10,908 available to purchase shares of Griffon common stock in the open market. During 2017, Griffon's ESOP purchased 621,875 shares of common stock for a total of $10,908 or $17.54 per share, under a borrowing line that had then been fully utilized. On June 30, 2017, the Term Loan and Line Note were combined into a single Term Loan. The Term Loan interest rate was LIBOR plus 2.91%. The Term Loan required quarterly principal payments of $569 and a balloon payment due at maturity. As a result of the special cash dividend of $1.00 per share, paid on April 16, 2018, the outstanding balance of the Term Loan was reduced by $5,705. The Term Loan was secured by shares purchased with the proceeds of the loan and with a lien on a specific amount of Griffon assets (which ranked pari passu with the lien granted on such assets under the Credit Agreement) and was guaranteed by Griffon. On March 13, 2019, the ESOP Term Loan was refinanced with an internal loan from Griffon which was funded with cash and a draw on its $350,000 credit facility. The internal loan interest rate is fixed at 2.91%, matures in June 2033

and requires quarterly payments of principal, currently $569, and interest. The internal loan is secured by shares purchased with the proceeds of the loan. The amount outstanding on the internal loan at June 30, 2019 was $32,987.

(e)

Two Griffon subsidiaries have capital leases outstanding for real estate located in Troy, Ohio and Ocala, Florida. The leases mature in 2021 and 2022, respectively, and bear interest at fixed rates of approximately 5.0% and 8.0%, respectively. The Troy, Ohio lease is secured by a mortgage on the real estate and is guaranteed by Griffon. The Ocala, Florida lease contains two five-year renewal options. At June 30, 2019, $5,124 was outstanding, net of issuance costs.

(f)

In November 2012, Garant G.P. (“Garant”) entered into a CAD $15,000 ($11,435 as of June 30, 2019) revolving credit facility. The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3% per annum (3.7% LIBOR USD and 3.14% Bankers Acceptance Rate CDN as of June 30, 2019). The revolving facility matures in October 2019. Garant is required to maintain a certain minimum equity. At June 30, 2019, there were no borrowings under the revolving credit facility with CAD 15,000 ($11,435 as of June 30, 2019) available for borrowing.

In July 2016, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries ("Griffon Australia") entered into an AUD 30,000 term loan and an AUD 10,000 revolver. The term loan refinanced two existing term loans and the revolver replaced two existing lines. In December 2016, the amount available under the revolver was increased from AUD 10,000 to AUD 20,000 and, in March 2017 and September 2017, the term loan commitment was increased by AUD 5,000 and AUD 15,000, respectively. In March 2019, the term loan commitment was reduced by AUD 10,000 with proceeds from a receivable purchase agreement in the amount of AUD 10,000. The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 13,375 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.90% per annum (3.15% at June 30, 2019). As of June 30, 2019, the term loan had an outstanding balance of AUD 27,125 ($18,982 as of June 30, 2019). The revolving facility and receivable purchase facility mature in March 2020, but are renewable upon mutual agreement with the lender. The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.8% and 1.0%, respectively, per annum (3.07% and 2.27%, respectively, at June 30, 2019). At June 30, 2019, there were no borrowings under the revolver and the receivable purchase facilities had an outstanding balance of AUD 10,000 ($6,997 as of June 30, 2019). The revolver, receivable purchase facility and the term loan are all secured by substantially all of the assets of Griffon Australia and its subsidiaries. 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.

In July 2018, the AMES Companies UK Ltd and its subsidiaries ("AMES UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver. The term loan and mortgage loan require quarterly principal payments of GBP 350 and GBP 83 plus interest, respectively, and have balloon payments due upon maturity, July 2023, of GBP 7,000 and GBP 2,333, respectively. The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25% and 1.8%, respectively (2.97% and 2.52% at June 30, 2019, respectively). The revolving facility matures in June 2020, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.5% (2.25% as of June 30, 2019). As of June 30, 2019, the revolver had an outstanding balance of GBP 1,140 ($1,446 as June 30, 2019) while the term and mortgage loan balances amounted to GBP 16,266 ($20,635 as of June 30, 2019). The revolver and the term loan are both secured by substantially all of the assets of AMES UK and its subsidiaries. AMES UK is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. An invoice discounting arrangement was canceled and replaced by the above loan facilities.


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

At June 30, 2019, Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.