Financing Arrangements

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

Long-term debt consists of the following:

						Carrying Value at
		Issuance Date	Maturity Date	Interest Rate at September 30, 2016		September 30, 2016			December 31, 2015
						(In millions)
Senior Notes		April 1, 2011	April 1, 2021	8.125	%	$	250.0		$	250.0
Revolving credit facility		—	July 31, 2019	2.56	%	151.6			169.0
Term Loan		—	July 31, 2019	2.69	%	24.5			27.9
Other, including capital leases		Various	Various	Various		26.4			21.2
Less current maturities						(20.5		)	(17.8		)
Less unamortized debt issuance costs	(1)					(3.9		)	(4.5		)
Total long-term debt, net						$	428.1		$	445.8

(1) Prior to the adoption of ASU 2015-03 in Q1 2016, debt issuance costs of $4.5 million at December 31, 2015 were reflected in the consolidated balance sheet in other long-term assets. Such amount was reclassified to long-term debt for comparative purposes.

On April 22, 2016, the Company further amended its revolving credit facility (the “Amended Credit Agreement”) to:

• increase the revolving credit facility to $300.0 million;

• increase the inventory advance rate from 50% to 65%, reducing back to 50% on a pro-rata quarterly basis over 36 months commencing July 1, 2016;

• reload the term loan up to $35.0 million, of which $24.5 million has been borrowed and is outstanding as of September 30, 2016;

• increase the Canadian sub-limit up to $35.0 million;

• increase the European sub-limit up to $25.0 million; and

• provide minor pricing adjustments including pricing the first $35.0 million drawn on the revolving credit facility at LIBOR plus 3.50%, reducing automatically on a pro-rata quarterly basis over 36 months commencing July 1, 2016.

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.

At the Company’s election, domestic amounts borrowed under the Amended Credit Agreement 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%. 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 sub-limit 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 U.S. base rate plus 0.0% to 1.0%.

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 financing agreement provides the Company the ability to borrow up to $11.0 million for expansion of its manufacturing facility in Arkansas. The financing agreement matures in September 2025. The Company had $5.5 million of borrowings outstanding under this agreement as of September 30, 2016.

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. Capital lease obligations of $17.0 million were borrowed under the Lease Agreement to acquire machinery and equipment as of September 30, 2016.

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. 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 following table represents fair value information of the senior notes, classified as Level 1 using estimated quoted market prices.

	September 30, 2016		December 31, 2015
	(In millions)
Carrying amount	$	250.0	$	250.0
Fair value	$	258.1	$	263.4