Debt

At December 31, 2017 and 2016, our long-term debt and interest rates on that debt were as follows (dollars in millions):

	December 31, 2017					December 31, 2016
	Amount		Interest Rate			Amount		Interest rate
Revolving Credit Facility, due August 2021	$	—		—	%	$	—		—	%
Five-Year Term Loan, due August 2021		—		—	%		380.2		2.02	%
Seven-Year Term Loan, due October 2020		—		—	%		630.5		2.40	%
6.50% Senior Notes due March 2018		150.0		6.50	%		150.0		6.50	%
2.45% Senior Notes, net of discount of $0.5 million as of December 31, 2017 due December 2020		499.5		2.45	%		—		—	%
3.90% Senior Notes, net of discounts of $0.2 million and $0.2 million as of December 30, 2017 and 2016, respectively, due June 2022		399.8		3.90	%		399.8		3.90	%
4.50% Senior Notes, net of discount of $1.2 million a $1.4 million as of December 30, 2017 and 2016, respectively, due November 2023		698.8		4.50	%		698.6		4.50	%
3.65% Senior Notes, net of discount of $0.8 million and $0.9 million as of December 31, 2017 and 2016, respectively, due September 2024		399.2		3.65	%		399.1		3.65	%
3.40% Senior Notes, net of discount of $1.6 million as of December 31, 2017 due December 2027		498.4		3.40	%		—		—	%
Total		2,645.7		3.80	%		2,658.2		3.54	%
Less current portion		150.0		6.50	%		25.8		2.11	%
Less unamortized debt issuance costs		15.3					12.5
Total long-term debt	$	2,480.4		3.64	%	$	2,620.0		3.57	%

On December 13, 2017, the Company issued $500.0 million of 2.45% senior notes due 2020 and $500.0 million of 3.40% senior notes due 2027, through a registered public offering. The net proceeds of $997.8 million were used to repay in full all amounts outstanding under our Seven-Year term loan due October 2020 of $625.6 million and our Five-Year term loan due August 2021 of $350.4 million. Any remaining net proceeds were used to pay $6.8 million of debt issuance costs and for general corporate purposes. The debt issuance costs will be amortized to interest expense using the effective interest method over the terms of the notes.

As of December 31, 2017, the details of our borrowings were as follows:

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Senior Unsecured Credit Agreement. On October 18, 2013, we entered into a $1.65 billion senior unsecured credit facility. Loans bear interest at LIBOR plus a margin that is determined based upon our credit ratings. On August 29, 2016, we amended and restated our five-year credit agreement dated October 18, 2013 to include a new five-year $385 million term loan facility to finance the acquisition of TimBar Corporation and to extend the maturity of the revolving credit facility to 2021. The financing consisted of:

•

Revolving Credit Facility: A $350.0 million unsecured revolving credit facility with variable interest (LIBOR plus a margin) due August 2021. During 2017, we did not borrow under the Revolving Credit Facility. At December 31, 2017, we had $23.1 million of outstanding letters of credit that were considered outstanding on the revolving credit facility, resulting in $326.9 million of unused borrowing capacity. The outstanding letters of credit were primarily for workers compensation. We are required to pay commitment fees on the unused portions of the credit facility.

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Five-Year Term Loan: A $385.0 million unsecured five-year term loan with variable interest (LIBOR plus 1.250%), payable quarterly, due August 2021. The term loan was repaid on December 13, 2017 with the proceeds received from the note offering discussed above.

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Seven-Year Term Loan: A $650.0 million unsecured term loan with variable interest (LIBOR plus 1.625%), payable quarterly, due October 2020. The term loan was repaid on December 13, 2017 with the proceeds received from the note offering discussed above.

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6.50% Senior Notes. On March 25, 2008, we issued $150.0 million of 6.50% senior notes due March 15, 2018, through a registered public offering.

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3.90% Senior Notes. On June 26, 2012, we issued $400.0 million of 3.90% senior notes due June 15, 2022, through a registered public offering.

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4.50% Senior Notes. On October 22, 2013, we issued $700.0 million of 4.50% senior notes due November 1, 2023, through a registered public offering.

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3.65% Senior Notes. On September 5, 2014, we issued $400.0 million of 3.65% senior notes due September 15, 2024, through a registered public offering.

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2.45% Senior Notes. On December 13, 2017, we issued $500.0 million of 2.45% senior notes due December 15, 2020, through a registered public offering.

•

3.40% Senior Notes. On December 13, 2017, we issued $500.0 million of 3.40% senior notes due December 15, 2027, through a registered public offering.

The instruments governing our indebtedness contain financial and other covenants that limit the ability of PCA and its subsidiaries to enter into sale and leaseback transactions, incur liens, incur indebtedness at the subsidiary level, enter into certain transactions with affiliates, merge or consolidate with any other person or sell or otherwise dispose of all or substantially all of our assets. Our credit facility also requires us to comply with certain financial covenants, including maintaining a minimum interest coverage ratio and a maximum leverage ratio. A failure to comply with these restrictions could lead to an event of default, which could result in an acceleration of any outstanding indebtedness and/or prohibit us from drawing on the revolving credit facility. Such an acceleration may also constitute an event of default under the senior notes indenture. At December 31, 2017, we were in compliance with these covenants.

At December 31, 2017, we have $2,645.7 million of fixed-rate senior notes outstanding. At December 31, 2017, the fair value of our fixed-rate debt was estimated to be $2,734.9 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs), discussed further in Note 2, Summary of Significant Accounting Policies.

Repayments, Interest, and Other

In 2017, we used the net proceeds from our 2.45% and 3.40% senior note offerings and other cash on hand to repay debt outstanding of $630.5 million under the Seven-Year Term Loan due October 2020 and $380.2 million under the Five-Year Term Loan due August 2021, both of which are no longer outstanding.

In 2016, we used cash on hand to make principal payments of $25.0 million under our old Five-Year Term Loan, $4.8 million under the new Five-Year Term Loan entered into in 2016, due August 2021, and $6.5 million under the Seven-Year Term Loan, due October 2020.

In 2015, we used cash on hand to repay $40.0 million of debt outstanding under our old Five-Year Term Loan and $6.5 million under the Seven-Year Term Loan, due October 2020.

As of December 31, 2017, annual principal maturities for debt, excluding unamortized debt discount, are: $150.0 million for 2018 which we intend to repay from cash on hand at maturity in March 2018; none for 2019; $500.0 million for 2020; none for 2021; $400.0 million for 2022; and $1.6 billion for 2023 and thereafter.

Interest payments paid in connection with the Company’s debt obligations for the years ended December 31, 2017, 2016, and 2015, were $96.3 million, $88.3 million, and $85.5 million, respectively.

Included in interest expense, net, are amortization of financing costs and amortization of treasury lock settlements. Amortization of treasury lock settlements was a $5.7 million net loss in 2017, 2016, and 2015. Amortization of financing costs in 2017, 2016, and 2015 was $4.0 million (including a $1.8 million write-off of deferred debt issuance costs related to the December 2017 debt refinancing), $1.8 million, and $1.8 million, respectively.