Long-Term Debt

3 Months Ended

Oct. 31, 2021

The components of long-term debt are as follows:


	October 31, 2021		July 31, 2021
Term loan	$	1,527,639	$	1,540,013
Asset-based credit facility	159,935		—
Senior unsecured notes	500,000		—
Unsecured notes	29,113		29,728
Other debt	67,536		70,952
Gross long-term debt	2,284,223		1,640,693
Debt issuance costs, net of amortization	(39,798)		(33,461)
Total long-term debt, net of debt issuance costs	2,244,425		1,607,232
Less: current portion of long-term debt	(12,159)		(12,411)
Total long-term debt, net, less current portion	$	2,232,266	$	1,594,821

The Company is a party to a seven-year term loan (“term loan”) agreement, which originally consisted of both a United States Dollar-denominated term loan tranche and a Euro-denominated term loan tranche, and a $750,000 revolving asset-based credit facility (“ABL”). Subject to earlier termination, the term loan matures on February 1, 2026 and the ABL originally matured on February 1, 2024. In connection with the Airxcel acquisition discussed in Note 2 to the Condensed Consolidated Financial Statements, effective September 1, 2021, the Company expanded its existing ABL facility from $750,000 to $1,000,000, favorably amended certain terms of the ABL agreement and extended the maturity date of the ABL from February 1, 2024 to September 1, 2026, subject to a springing maturity at an earlier date if the maturity date of the Company's term loans have not been extended or refinanced. The ABL interest rate remains unchanged.

As of October 31, 2021, the entire outstanding U.S. term loan tranche balance of $941,900 was subject to a LIBOR-based rate totaling 3.125%. The interest rate on $432,250 of that balance, however, was fixed at 5.466% through an interest rate swap, dated March 18, 2019, by swapping the underlying 1-month LIBOR rate for a fixed rate of 2.466%. As of July 31, 2021, the entire outstanding U.S. term loan tranche balance of $941,900 was subject to a LIBOR-based rate of 3.125%, but the interest rate on $482,138 of that balance was fixed at 5.466% through an interest rate swap, dated March 18, 2019, by swapping the underlying 1-month LIBOR rate for a fixed rate of 2.466%. The total interest rate on the October 31, 2021 outstanding Euro term loan tranche balance of $585,739 was 3.00%, and the total interest rate on the July 31, 2021 outstanding Euro term loan tranche of $598,113 was 3.00%.

As of October 31, 2021, the total weighted average interest rate on the outstanding ABL borrowings of $159,935 was 1.314%. The Company may, generally at its option, pay any borrowings under the ABL, in whole or in part, at any time and from time to time, without penalty or premium.

On October 14, 2021, the Company issued an aggregate principal amount of $500,000 of 4.000% Senior Unsecured Notes due 2029 (“Senior Unsecured Notes”). The Senior Unsecured Notes will mature on October 15, 2029 unless redeemed or repurchased earlier. Net proceeds from the Senior Unsecured Notes, along with cash-on-hand, were used to repay $500,000 of borrowings outstanding on the Company’s ABL and for certain transaction costs. Interest on the Senior Unsecured Notes is payable in semi-annual installments on April 15 and October 15 of each year, beginning with the first payment on April 15, 2022. The Senior Unsecured Notes will rank equally in right of payment with all of the Company’s existing and future senior indebtedness and senior to the Company’s future subordinated indebtedness, and effectively junior in right of payment to the Company’s existing and future secured indebtedness to the extent of the assets securing such indebtedness.

The Company must make mandatory prepayments of principal under the term loan agreement upon the occurrence of certain specified events, including certain asset sales, debt issuances and receipt of annual cash flows in excess of certain amounts. No such specified events occurred during the three months ended October 31, 2021 or 2020.

Availability under the ABL agreement is subject to a borrowing base based on a percentage of applicable eligible receivables and eligible inventory. The ABL carries interest at an annual base rate plus 0.25% to 0.50%, or LIBOR plus 1.25% to 1.50%, based on adjusted excess availability as defined in the ABL agreement. This agreement also includes a 0.20% unused facility fee.

The unused availability under the ABL is generally available to the Company for general operating purposes and, based on October 31, 2021 eligible accounts receivable and inventory balances, net of amounts drawn, totaled approximately $810,000.

The unsecured notes of 25,000 Euro ($29,113) relate to long-term debt of our European segment. There are two series, 20,000 Euro ($23,290) with an interest rate of 1.945% maturing in March 2025, and 5,000 Euro ($5,823) with an interest rate of 2.534% maturing March 2028. Other debt relates primarily to real estate loans with varying maturity dates through September 2032 and interest rates ranging from 2.40% to 3.43%.

Total contractual gross debt maturities are as follows:


For the remainder of the fiscal year ending July 31, 2022	$	12,159
For the fiscal year ending July 31, 2023	11,942
For the fiscal year ending July 31, 2024	12,066
For the fiscal year ending July 31, 2025	35,234
For the fiscal year ending July 31, 2026	1,690,691
For the fiscal year ending July 31, 2027 and thereafter	522,131
	$	2,284,223

For the three months ended October 31, 2021, interest expense on the term loan, ABL, Senior Unsecured Notes and other debt facilities was $17,643. For the three months ended October 31, 2020, interest expense on the term loan, ABL and other debt facilities was $20,588.

In fiscal 2019, the Company incurred fees to secure the term loan and ABL, and those amounts are being amortized ratably over the respective seven and five-year terms of those agreements. The Company also incurred and capitalized certain creditor fees related to the March 25, 2021 repricing of its term loan noted above, to be amortized over the remaining life of the term loan, and certain creditor fees of $2,127 related to the September 1, 2021 expansion of the ABL, which are being amortized over the remaining life of the extended ABL. In addition, the Company incurred fees of $8,445 relative to the $500,000 Senior Unsecured Notes issued October 14, 2021 discussed above, and those debt issuance costs are being amortized over the eight-year term of those notes. The Company recorded total charges related to the amortization of these term loan, ABL and Senior Unsecured Note fees, which are classified as interest expense, of $2,424 for the three months ended October 31, 2021. The Company recorded total charges related to the amortization of these term loan and ABL fees, which are classified as interest expense, of $2,723 for the three months ended October 31, 2020. The unamortized balance of the ABL facility fees was $6,304 at October 31, 2021 and $7,005 as of July 31, 2021 and is included in Other long-term assets in the Condensed Consolidated Balance Sheets.

The fair value of the Company’s term loan debt at October 31, 2021 and July 31, 2021 was $1,526,176 and $1,551,141, respectively, and the fair value of the Company’s Senior Unsecured Notes at October 31, 2021 was $496,250. The carrying value of the Company’s term-loan debt, excluding debt issuance costs, was $1,527,639 and $1,540,013 at October 31, 2021 and July 31, 2021, respectively, and the carrying value of the Company’s Senior Unsecured Notes was $500,000 at October 31, 2021. The fair values of the Company’s term loan and Senior Unsecured Notes are primarily estimated using Level 2 inputs as defined by ASC 820, primarily based on quoted market prices. The fair value of other debt held by the Company approximates fair value.