Long-Term Debt

3 Months Ended

Oct. 31, 2022

The components of long-term debt are as follows:


	October 31, 2022		July 31, 2022
Term loan	$	1,099,179	$	1,124,209
Asset-based credit facility	85,000		100,000
Senior unsecured notes	500,000		500,000
Unsecured notes	24,785		25,495
Other debt	46,106		50,207
Total long-term debt	1,755,070		1,799,911
Debt issuance costs, net of amortization	(30,261)		(32,482)
Total long-term debt, net of debt issuance costs	1,724,809		1,767,429
Less: current portion of long-term debt	(10,173)		(13,190)
Total long-term debt, net, less current portion	$	1,714,636	$	1,754,239

As discussed in Note 12 to the Company’s Consolidated Financial Statements included in the Fiscal 2022 Form 10-K, the Company is a party to a seven-year term loan (“term loan”) agreement, which consists of both a U.S. Dollar-denominated term loan tranche and a Euro-denominated term loan tranche, and a $1,000,000 revolving asset-based credit facility (“ABL”). Subject to earlier termination, the term loan matures on February 1, 2026 and the ABL matures on September 1, 2026, subject to a springing maturity at an earlier date if the maturity date of the Company's term loan has not been extended or refinanced.

As of October 31, 2022, the entire outstanding U.S. term loan tranche balance of $661,900 was subject to a LIBOR-based rate totaling 6.813%. The interest rate on $220,350 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% plus a 3.000% interest rate spread. As of July 31, 2022, the entire outstanding U.S. term loan tranche balance of $671,900 was subject to a LIBOR-based rate of 5.375%, but the interest rate on $273,325 of that balance was fixed at 5.466% through the March 18, 2019 interest rate swap. The total interest rate on the October 31, 2022 outstanding Euro term loan tranche balance of $437,279 was 4.19%, and the total interest rate on the July 31, 2022 outstanding Euro term loan tranche of $452,309 was 3.00%.

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, 2022 or 2021.

As of October 31, 2022, the total weighted-average interest rate on the outstanding ABL borrowings of $85,000 was 4.436%.

As of July 31, 2022, the total weighted-average interest rate on the outstanding ABL borrowings of $100,000 was 3.048%. 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.

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, 2022 eligible accounts receivable and eligible inventory balances, net of amounts drawn, totaled approximately $890,000.

As discussed in Note 12 to the Company’s Consolidated Financial Statements included in the Fiscal 2022 Form 10-K, 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”) that will mature on October 15, 2029 unless redeemed or repurchased earlier. Interest on the Senior Unsecured Notes is payable in semi-annual installments on April 15 and October 15 of each year.

The unsecured notes of 25,000 Euro ($24,785) relate to long-term debt of our European segment. There are two series, 20,000 Euro ($19,828) with an interest rate of 1.945% maturing in March 2025, and 5,000 Euro ($4,957) 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 2.38% to 2.87%.

Total contractual gross debt maturities are as follows:


For the remainder of the fiscal year ending July 31, 2023	$	8,390
For the fiscal year ending July 31, 2024	10,059
For the fiscal year ending July 31, 2025	29,778
For the fiscal year ending July 31, 2026	1,187,038
For the fiscal year ending July 31, 2027	2,429
For the fiscal year ending July 31, 2028 and thereafter	517,376
	$	1,755,070

For the three month periods ended October 31, 2022 and October 31, 2021, interest expense on the term loan, ABL, Senior Unsecured Notes and other debt facilities totaled $20,179 and $17,643, respectively, and also included the amortization of capitalized fees to secure the term loan, ABL and Senior Unsecured Notes, which are being amortized over the respective terms of those arrangements, of $2,835 and $2,424, respectively.

The unamortized balance of all capitalized ABL facility fees was $5,133 at October 31, 2022 and $5,940 as of July 31, 2022 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, 2022 and July 31, 2022 was $1,072,883 and $1,097,136, respectively, and the fair value of the Company’s Senior Unsecured Notes at October 31, 2022 and July 31, 2022 was $396,400 and $405,000, respectively. The fair values of the Company’s term-loan debt and Senior Unsecured Notes are primarily estimated using Level 2 inputs as defined by ASC 820, based on quoted prices in markets that are not active. The fair value of other debt held by the Company approximates carrying value.