Financing Arrangements

Long-term debt consists of the following:



					Carrying Value at
	Issuance Date	Maturity Date	Interest Rate at December 31, 2015		December 31, 2015		December 31, 2014
					(In millions)
Senior Notes	April 1, 2011	April 1, 2021	8.125	%	$	250.0	$	250.0
Revolving credit	—	July 31, 2019	2.09	%	169.0		162.0
Term loan	—	July 31, 2019	2.38	%	27.9		28.8
Other, including capital leases	Various	Various	Various		21.2		3.0
Total debt					468.1		443.8
Less current maturities					17.8		9.4
Total long-term debt, net of current portion					$	450.3	$	434.4

On August 13, 2015, the Company entered into a capital lease agreement (the “Lease Agreement”). The Lease Agreement provides the Company up to $50.0 million for capital leases. See Note 12 for additional disclosure.

On July 31, 2014, the Company entered into a sixth amendment and restatement of the credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement, among other things, increases the revolving credit facility to $230.0 million, provides a term loan for $16.1 million and extends the maturity date of the borrowings under the Amended Credit Agreement to July 31, 2019. The revolving credit facility includes a Canadian sub-limit of $15.0 million and a European sub-limit of $10.0 million (which may be increased to $25.0 million) for borrowings in those locations.

The Amended Credit Agreement was further amended in accordance with Amendments No. 1, 2 and 3 to the Amended Credit Agreement, dated October 24, 2014, January 20, 2015 and March 12, 2015, respectively (the “Amendments”). The Amendments:


•	increases the revolving credit facility from $230.0 million to $275.0 million;


•	increases the inventory advance rate from 50% to 60%, reducing back to 50% on a pro-rata quarterly basis over 36 months commencing April 1, 2015;


•	reloads the term loan up to $35.0 million from $15.5 million, of which $27.9 million has been borrowed and is outstanding as of December 31, 2015;


•	increases the Canadian sub-limit up to $25.0 million from $15.0 million;


•	increases the European sub-limit up to $25.0 million from $10.0 million; and


•	provides minor pricing adjustments including pricing the first $22.0 million drawn on the revolver at LIBOR + 3.50%, reducing automatically on a pro-rata quarterly basis over 36 months commencing April 1, 2015.

At the Company’s election, domestic amounts borrowed under the revolving credit facility may be borrowed at either:

•LIBOR plus 1.5% to 2.5%; or

•the bank’s prime lending rate minus 0.25% to 1.25%.

At the Company's election, amounts borrowed under the term loan may be borrowed at either:

•LIBOR plus 2.0% to 3.0%; or

•the bank’s prime lending rate minus 0.75% to plus 0.25%.

The LIBOR-based interest rate is dependent on the Company’s debt service coverage ratio, as defined in the Amended Credit Agreement.

Amounts borrowed under the Canadian revolving credit facility provided by the Amended Credit Agreement may be borrowed at either:

•the Canadian deposit offered rate plus 1.5% to 2.5%;

•the Canadian prime lending rate plus 0.0% to 1.0%; or

•the US base rate plus 0.0% to 1.0%.

Under the Amended Credit Agreement, a detailed borrowing base formula provides borrowing availability to the Company based on percentages of eligible accounts receivable and inventory. The term loan is amortized based on a seven-year schedule with the balance due at maturity (July 31, 2019). The Amended Credit Agreement also reduced the commitment fee for the revolving credit facility. Additionally, the Company has the option, pursuant to the Amended Credit Agreement, to increase the availability under the revolving credit facility by $25.0 million.

On April 7, 2011, the Company completed the sale of $250.0 million in the aggregate principal amount of 8.125% senior notes due 2021 (the "Notes"). The Notes bear an interest rate of 8.125% per annum, payable semi-annually in arrears on April 1 and October 1 of each year. The Notes mature on April 1, 2021.

At December 31, 2015, in addition to amounts borrowed under the revolving credit facility, there was $21.4 million outstanding for standby letters of credit.

At December 31, 2015, the Company had approximately $69.3 million of unused borrowing capacity under the revolving credit facility.

The following table represents fair value information of the Notes, classified as Level 1, at December 31, 2015 and December 31, 2014. The fair value was estimated using quoted market prices.



	December 31, 2015		December 31, 2014
	(In millions)
Carrying amount	$	250.0	$	250.0
Fair value	$	263.4	$	266.3

Maturities of long-term debt, excluding capital leases, during each of the five years subsequent to December 31, 2015 are as follows:



	(In millions)
2016	$	13.4
2017	$	12.7
2018	$	7.0
2019	$	167.2
2020	$	—

Foreign subsidiaries of the Company had $0.8 million of borrowings at December 31, 2015 and zero at December 31, 2014 and outstanding bank guarantees of approximately $3.9 million and $5.2 million at December 31, 2015 and 2014, respectively, under their credit arrangements.

The Notes are general unsecured senior obligations of the Company and are fully and unconditionally guaranteed on a joint and several basis by all material 100% owned domestic subsidiaries of the Company. Provisions of the indenture governing the Notes and the Credit Agreement contain restrictions on the Company’s ability to incur additional indebtedness, to create liens or other encumbrances, to make certain payments, investments, loans and guarantees and to sell or otherwise dispose of a substantial portion of assets or to merge or consolidate with an unaffiliated entity. At December 31, 2015, the Company was in compliance with all financial covenants of the Credit Agreement.

The weighted average interest rate on all debt was 5.47% at December 31, 2015 and 5.62% at December 31, 2014.

On October 21, 2015, the Company, through its Southwest Steel Processing LLC subsidiary, entered into a financing agreement with the Arkansas Development Finance Authority. The agreement provides the Company the ability to borrow up to $11.0 million for expansion of its manufacturing facility in Arkansas. The loan matures in September 2025. The Company has no borrowings under this agreement as of December 31, 2015.