LONG-TERM DEBT

9 Months Ended

Jun. 30, 2020



		At June 30, 2020													At September 30, 2019
		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 2028	(a)	$	1,000,000		$	375	(14,877		)	$	985,498		5.75	%	$	—		$	—	$	—		$	—		—	%
Senior notes due 2022	(a)	—			—		—			—			5.25	%	1,000,000			867		(9,175		)	991,692			5.25	%
Revolver due 2025	(b)	104,181			—		(2,544		)	101,637			Variable		50,000			—		(1,243		)	48,757			Variable
Capital lease - real estate	(d)	11,564			—		(36		)	11,528			5.00	%	4,388			—		(55		)	4,333			5.00	%
Non US lines of credit	(e)	—			—		(33		)	(33		)	Variable		17,576			—		(45		)	17,531			Variable
Non US term loans	(e)	30,736			—		(172		)	30,564			Variable		36,977			—		(188		)	36,789			Variable
Other long term debt	(f)	3,422			—		(16		)	3,406			Variable		5,190			—		(18		)	5,172			Variable
Totals		1,149,903			375		(17,678		)	1,132,600					1,114,131			867		(10,724		)	1,104,274
less: Current portion		(9,235		)	—		—			(9,235		)			(10,525		)	—		—			(10,525		)
Long-term debt		$	1,140,668		$	375	$	(17,678	)	$	1,123,365				$	1,103,606		$	867	$	(10,724	)	$	1,093,749



		Three Months Ended June 30, 2020													Three Months Ended June 30, 2019
		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 2028	(a)	5.8	%	$	12,219		$	—	$	277		$	12,496		n/a		$	—		$	—	$	—	$	—
Senior notes due 2022	(a)	6.2	%	1,960			11		155			2,126			5.7	%	13,125			68		950		14,143
Revolver due 2025	(b)	Variable		1,597			—		134			1,731			Variable		2,282			—		220		2,502
ESOP Loans	(c)	n/a		—			—		—			—			7.2	%	—			—		—		—
Capital lease - real estate	(d)	6.3	%	33			—		6			39			5.6	%	78			—		7		85
Non US lines of credit	(e)	Variable		4			—		(1		)	3			Variable		4			—		3		7
Non US term loans	(e)	Variable		222			—		21			243			Variable		376			—		44		420
Other long term debt	(f)	Variable		102			—		1			103			Variable		149			—		—		149
Capitalized interest				(16		)	—		—			(16		)			(18		)	—		—		(18		)
Totals				$	16,121		$	11	$	593		$	16,725				$	15,996		$	68	$	1,224	$	17,288

(1) n/a = not applicable



		Nine Months Ended June 30, 2020												Nine Months Ended June 30, 2019
		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 2028	(a)	5.9	%	$	17,785		$	—	$	412	$	18,197		—	%	$	—		$	—	$	—	$	—
Senior notes due 2022	(a)	5.7	%	23,125			123		1,734		24,982			5.7	%	39,375			202		2,852		42,429
Revolver due 2025	(b)	Variable		4,798			—		531		5,329			Variable		4,846			—		761		5,607
ESOP Loans	(c)	n/a		—			—		—		—			6.6	%	937			—		186		1,123
Capital lease - real estate	(d)	6.1	%	146			—		19		165			5.5	%	294			—		19		313
Non US lines of credit	(e)	Variable		11			—		11		22			Variable		15			—		11		26
Non US term loans	(e)	Variable		786			—		40		826			Variable		1,273			—		97		1,370
Other long term debt	(f)	Variable		394			—		1		395			Variable		478			—		6		484
Capitalized interest				(109		)	—		—		(109		)			(18		)	—		—		(18		)
Totals				$	46,936		$	123	$	2,748	$	49,807				$	47,200		$	202	$	3,932	$	51,334

(a)

On June 22, 2020, Griffon completed the add-on offering through a private placement $150,000 principal amount of its 5.75% senior notes due 2028, at 100.25% of par, to Griffon's previously issued $850,000 principal amount of its 5.75% senior notes due in 2028, at par, completed on February 19, 2020 (collectively, the “Senior Notes”). Proceeds from the Senior Notes were used to redeem the $1,000,000 of 5.25% senior notes due 2022 (the “2022 Senior Notes"). As of June 30, 2020, outstanding Senior Notes due totaled $1,000,000; interest is payable semi-annually on March 1 and September 1.

The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. On April 22, 2020, Griffon exchanged substantially all of the $850,000 Senior Notes for substantially identical Senior Notes registered under the Securities Act of 1933, as amended (the "Securities Act"), via an exchange offer. Griffon intends to complete an offer to exchange the remaining $150,000 Senior Notes for substantially identical Senior Notes registered under the Securities Act during the fourth quarter of fiscal 2020. The fair value of the 2028 Senior Notes approximated $980,000 on June 30, 2020 based upon quoted market prices (level 1 inputs).

In connection with these transactions, Griffon capitalized $15,289 of underwriting fees and other expenses incurred related to the issuance and exchange of the Senior Notes, which will amortize over the term of such terms. Furthermore, all of the obligations associated with the 2022 Senior Notes were discharged. Additionally, Griffon recognized a $7,925 loss on the early extinguishment of debt of the 5.25% $1,000,000 2022 Senior Notes, comprised primarily of the write-off of $6,725 of remaining deferred financing fees, $607 of tender offer net premium expense and $593 of redemption interest expense.

(b)

On January 30, 2020, Griffon amended its revolving credit facility (as amended, the "Credit Agreement") to increase the maximum borrowing availability from $350,000 to $400,000 and extend its maturity date from March 22, 2021 to March 22, 2025. The amended agreement also modified certain other provisions of the facility. The facility includes a letter of credit sub-facility with a limit of $100,000 (increased from $50,000); a multi-currency sub-facility of $200,000 (increased from $100,000); and contains a customary accordion feature that permits us to request, subject to each lender's consent, an increase in the maximum aggregate amount that can be borrowed by up to an additional $100,000 (increased from $50,000).

Borrowings under the Credit Agreement may be repaid and re-borrowed at any time. Interest is payable on borrowings at either a LIBOR or base rate benchmark rate, 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. At June 30, 2020, there were $104,181of outstanding borrowings under the Credit Agreement; outstanding standby letters of credit were $21,617; and $274,202 was available, subject to certain loan covenants, for borrowing at that date.

(c)

In August 2016 and as amended on June 30, 2017, Griffon’s ESOP entered into a Term Loan with a bank (the "ESOP Agreement"). The Term Loan interest rate was LIBOR plus 3.00%. The Term Loan required quarterly principal payments of $569 with a balloon payment due at maturity. 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 under its Credit Agreement. The internal loan interest rate is fixed at 2.91%, matures in June 2033 and requires quarterly payments of principal, currently $635, 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, 2020 was $30,513.

(d)

Two Griffon subsidiaries have finance leases outstanding for real estate located in Troy, Ohio and Ocala, Florida. The leases mature in 2021 and 2025, respectively, and bear interest at fixed rates of approximately 5.0% and 2.9%, respectively. The Troy, Ohio lease is secured by a mortgage on the real estate and is guaranteed by Griffon. The Ocala, Florida lease contains one five-year renewal option. At June 30, 2020, $11,528 was outstanding, net of issuance costs.

(e)

In November 2012, Garant G.P. (“Garant”) entered into a CAD 15,000 ($10,974 as of June 30, 2020) revolving credit facility. The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3% per annum (1.46% LIBOR USD and 1.56% Bankers Acceptance Rate CDN as of June 30, 2020). The revolving facility matures in October 2022. Garant is required to maintain a certain minimum equity. At June 30, 2020, there were no borrowings under the revolving credit facility with CAD 15,000 ($10,974 as of June 30, 2020) available for borrowing.

In July 2016 and as amended in March 2019, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries (collectively, "Griffon Australia") entered into an AUD 29,625 term loan, AUD 20,000 revolver and AUD 10,000 receivable purchase facility agreement. The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 9,625 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.95% per annum (2.09% at June 30, 2020). During the quarter ended June 30, 2020, the term loan balance was reduced by AUD 5,000, from AUD 23,375 to AUD 18,375 with proceeds from an AUD 5,000 increase in the commitment of the receivables purchase line from AUD 10,000 to AUD 15,000. The term loan had an outstanding balance of AUD 17,125 ($11,761 as of June 30, 2020). The revolving facility and receivable purchase facility mature in March 2022, but are renewable upon mutual agreement with the lender. The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.9% and 1.35%, respectively, per annum (2.05% and 1.49%, respectively, at June 30, 2020). At June 30, 2020, there were no borrowings under the revolver and the receivable purchase facility. 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 (collectively, "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 7,700 and GBP 2,500, respectively. The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25% and 1.8%, respectively (2.33% and 1.88% at June 30, 2020, respectively). The revolving facility matures in June 2021, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.75% (1.85% as of June 30, 2020). As of June 30, 2020, the revolver had no outstanding balance while the term and mortgage loan balances amounted to GBP 15,398 ($18,975 as of June 30, 2020). 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.


(f)	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, 2020, Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.