ACCOUNTS RECEIVABLES

9 Months Ended

Sep. 30, 2020

NOTE 3. ACCOUNTS RECEIVABLES

On July 16, 2019, our existing $250.0 million Receivables Financing Agreement was extended to July 15, 2022 and downsized to $10.0 million with the option to expand (Receivables Financing Agreement). During the nine months ended September 30, 2020, we amended the Receivables Financing Agreement to expand the borrowing capacity to $250.0 million. The Receivables Financing Agreement includes a minimum borrowing requirement of 50% of the facility limit or available borrowing capacity, whichever is lesser, beginning on October 1, 2020. The administrative agent for our Receivables Financing Agreement is PNC Bank, National Association. Under the Receivables Financing Agreement, our eligible trade receivables are used for collateralized borrowings and continue to be serviced by us. In addition, the Receivables Financing Agreement incorporates the secured leverage covenant that is contained in the $1,300.0 million senior secured credit facility. As of September 30, 2020, $325.1 million of our trade receivables were pledged as collateral. As of September 30, 2020, we had

$125.0 million drawn with $115.8 million of additional borrowing capacity available under the Receivables Financing Agreement. As of both December 31, 2019 and September 30, 2019, we had zero drawn under the Receivables Financing Agreement.

Olin also has trade accounts receivable factoring arrangements (AR Facilities) and pursuant to the terms of the AR Facilities, certain of our subsidiaries may sell their accounts receivable up to a maximum of $315.0 million. We will continue to service the outstanding accounts sold. These receivables qualify for sales treatment under ASC 860 “Transfers and Servicing” and, accordingly, the proceeds are included in net cash provided by operating activities in the condensed statements of cash flows. The following table summarizes the AR Facilities activity:



	September 30,
	2020			2019
	($ in millions)
Balance at beginning of year	$	63.1		$	132.4
Gross receivables sold	614.9			778.9
Payments received from customers on sold accounts	(584.9		)	(803.9		)
Balance at end of period	$	93.1		$	107.4

The factoring discount paid under the AR Facilities is recorded as interest expense on the condensed statements of operations. The factoring discount was $0.2 million and $0.8 million for the three months ended September 30, 2020 and 2019, respectively, and $1.2 million and $2.3 million for the nine months ended September 30, 2020 and 2019, respectively. The agreements are without recourse and therefore no recourse liability had been recorded as of September 30, 2020, December 31, 2019, or September 30, 2019.