Financing Arrangements

6 Months Ended

Jun. 30, 2023

Financing ArrangementsDebt consists of the following:


				Carrying Value at
	Maturity Date	Interest Rate at June 30, 2023		June 30, 2023		December 31, 2022
				(In millions)
Senior Notes	April 15, 2027	6.625	%	$	350.0	$	350.0

Revolving credit facility	November 26, 2024	6.43	%	300.0		285.3


Finance Leases	Various	Various		19.4		18.5
Other	Various	Various		18.9		15.3
Total debt				688.3		669.1
Less: Current portion of long-term debt and short-term debt				(12.5)		(10.9)

Less: Unamortized debt issuance costs				(2.7)		(3.1)
Total long-term debt				$	673.1	$	655.1

In addition to debt listed above, on December 30, 2022, the Company entered into a memorandum of understanding (the “MOU”) with a third party pursuant to which the third party would purchase our Aluminum Products business. The sale of the Aluminum Products business is subject to the successful completion of a definitive purchase agreement and other customary conditions. In connection with the MOU, the Company also entered into a financing arrangement with the third party pursuant to which the Company received a portion of the estimated purchase price of the Aluminum Products business, including $20.0 million of cash and a promissory note in the principal amount of $25.0 million, and recorded a financing arrangement liability of $45.0 million. The Company used the $20.0 million from this financing arrangement to repay indebtedness under its revolving credit facility. If a definitive purchase agreement between the parties is not entered into or the sale is not successfully consummated, the promissory note will be cancelled and the Company will repay the third party $20.0 million.

The Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) of the Company's subsidiary, Park-Ohio Industries, Inc. (“Park-Ohio”) provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million. The Credit Agreement matures on November 26, 2024. As of June 30, 2023, we had borrowing availability of $86.8 million under the Credit Agreement.

We had outstanding bank guarantees and letters of credit under our credit arrangements of approximately $46.5 million at June 30, 2023 and $41.0 million at December 31, 2022.

In 2017, Park-Ohio completed the issuance, in a private placement, of $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “Notes”). The Notes are unsecured senior obligations of Park-Ohio and are guaranteed on an unsecured senior basis by the 100% owned material domestic subsidiaries of Park-Ohio.

In 2015, the Company entered into a finance lease agreement (the “Lease Agreement”). The Lease Agreement provides the Company up to $50.0 million for finance leases. Finance lease obligations of $4.0 million were borrowed under the Lease Agreement to acquire machinery and equipment as of June 30, 2023. As of June 30, 2023, the Company had additional finance leases totaling $15.4 million.

In 2015, the Company, through its Southwest Steel Processing LLC subsidiary, entered into a financing agreement with the Arkansas Development Finance Authority, which matures in September 2025. The financing agreement provides the Company the ability to borrow up to $11.0 million for expansion of its manufacturing facility in Arkansas. The Company had $3.7 million of borrowings outstanding under this agreement as of June 30, 2023, which is included in Other above.

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


	June 30, 2023		December 31, 2022
	(In millions)
Carrying amount	$	350.0	$	350.0
Fair value	$	311.5	$	227.5

The fair value of the revolving credit facility is equal to its carrying value as the Company has the ability to repay the outstanding principal at par value at any time. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments.