Note 5 - Debt

(In millions)	December 31, 2015			December 31, 2014
Working capital line of credit-China	$	—		$	1.3
Short-term borrowings		—			1.3
4.7% senior notes — due 2025		300.0			—
Senior notes – original issue discount		(0.8	)		—
Senior notes – deferred financing costs		(2.7	)		—
Senior unsecured credit facility — due 2019		280.0			415.0
Long-term debt		576.5			415.0
Total debt	$	576.5		$	416.3

4.7% Senior Notes

In August 2015, the Company issued $300 million in aggregate principal amount of 4.7% Senior Unsecured Notes due in 2025. The interest rate on these senior notes may be increased by 0.25% each time a credit rating applicable to the notes is downgraded. The maximum rate is 6.7%. The net proceeds of approximately $296.4 million were initially used to repay, in part, our Senior Unsecured Revolving Credit Facility (the “Facility”). The conditions and covenants related to the senior notes are less restrictive than those of our Facility. The effective interest rate for the outstanding period in 2015 was 4.76%. The fair value of the senior notes based on quoted prices utilizing level 2 inputs was $303 million at December 31, 2015.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. For public business entities, the standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. We adopted this standard during the third quarter of 2015 upon the issuance of our Senior Unsecured Notes due 2025. The balance for unamortized deferred financing costs and debt discount related to the senior notes was $3.5 million at December 31, 2015. The adoption of the ASU did not affect the classification of deferred financing costs related to our Facility.

Senior Credit Facility

In 2014 we entered into the $700 million Facility which matures in September 2019. The Facility replaces the Company’s previous senior secured credit facility (a $600 million revolving loan) that would have expired in June 2018. The initial interest rate for the revolver (as well as the rate in effect for 2015) is LIBOR + 1.25%. The interest rate ranges from LIBOR + 1% to a maximum of LIBOR + 2%, depending upon the Company’s leverage ratio. The proceeds from the Facility were used to repay all amounts, and terminate all commitments outstanding under the Company’s Credit Agreement and to pay fees and expenses in connection with the refinancing. As a result of the refinancing, the Company accelerated certain unamortized financing costs of the credit facility being replaced incurring a pretax charge of $0.5 million in the third quarter of 2014. At December 31, 2015, the outstanding borrowings of $280 million from the Facility approximates fair value using level 2 inputs.

The Facility contains financial and other covenants, including, but not limited to, restrictions on the incurrence of debt and the granting of liens, as well as the maintenance of an interest coverage ratio and a leverage ratio. In accordance with the terms of the Facility, we are required to maintain a minimum interest coverage ratio of 3.50 (based on the ratio of EBITDA, as defined in the Credit Agreement, to interest expense) and may not exceed a maximum leverage ratio of 3.50 (based on the ratio of total debt to EBITDA) throughout the term of the Facility. In addition, the Facility contains other terms and conditions such as customary representations and warranties, additional covenants and customary events of default.

Other Credit Facility

We have a $10.0 million revolving credit line for working capital needs of our Chinese entity with no outstanding balance at December 31, 2015. These funds can only be used locally. The facility is guaranteed by Hexcel Corporation, but is uncommitted and cancellable by the lender at any time.

Aggregate Maturities of Debt

We have $280 million of debt maturing in 2019 and another $300 million of debt maturing in 2025.