Debt, Capital Lease Obligations and Other Financing

12 Months Ended

Sep. 28, 2019

Debt and Capital Lease Obligations [Abstract]

Debt, Capital Lease Obligations and Other Financing

Debt and capital lease obligations as of September 28, 2019 and September 29, 2018, consisted of the following (in thousands):



	2019			2018
4.05% Senior Notes, due June 15, 2025	$	100,000		$	100,000
4.22% Senior Notes, due June 15, 2028	50,000			50,000
Borrowings under the credit facility	95,000			—
Capital lease and other financing obligations	44,492			39,857
Unamortized deferred financing fees	(1,512		)	(1,240		)
Total obligations	287,980			188,617
Less: current portion	(100,702		)	(5,532		)
Long-term debt and capital lease obligations, net of current portion	$	187,278		$	183,085

On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ratios such as a total leverage ratio and a minimum interest coverage ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a make-whole amount; interest on the 2018 Notes is payable semiannually. At September 28, 2019, the Company was in compliance with the covenants under the 2018 NPA.

In connection with the issuance of the 2018 Notes, on June 15, 2018, the Company repaid, on maturity $175.0 million in principal amount of its previous 5.20% Senior Notes.

On May 15, 2019, the Company refinanced its then-existing senior unsecured revolving credit facility (the "Prior Credit Facility") by entering into a new 5-year senior unsecured revolving credit facility (collectively with the Prior Credit Facility, referred to as the "Credit Facility"), which expanded the maximum commitment from $300.0 million to $350.0 million and extended the maturity from July 5, 2021 to May 15, 2024. The maximum commitment under the Credit Facility may be further increased to $600.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During fiscal 2019, the highest daily borrowing was $250.0 million; the average daily borrowings were $140.7 million. The Company borrowed $1,084.5 million and repaid $989.5 million of revolving borrowings under the Credit Facility during fiscal 2019. The Company was in compliance with all financial covenants relating to the Credit Agreement, which are generally consistent with those in the 2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.125% as of September 28, 2019.

The aggregate scheduled maturities of the Company’s debt obligations as of September 28, 2019, are as follows (in thousands):



2020	$	95,000
2021	—
2022	—
2023	—
2024	—
Thereafter	150,000
Total	$	245,000

The aggregate scheduled maturities of the Company’s capital leases and other financing obligations as of September 28, 2019, are as follows (in thousands):



2020	$	5,718
2021	2,651
2022	2,166
2023	1,018
2024	358
Thereafter	32,581
Total	$	44,492

The Company's weighted average interest rate on capital lease obligations was 4.82% and 4.87% as of September 28, 2019 and September 29, 2018, respectively.

The "Thereafter" line of the scheduled maturities of capital lease obligations table above includes an $8.8 million non-cash financing obligation related to a failed sale-leaseback of a building shell in Guadalajara, Mexico that was capitalized in fiscal 2014. This obligation will be increased by interest expense and land rent expense, and reduced by contractual payments during the 20-year lease term. The lease contains a 10-year base lease agreement with two 5-year renewal options. As of September 29, 2018, the balance of the related financing obligation totaled $8.6 million. At the end of the 20-year lease term, the net book value of the assets will approximate the balance of the financing obligation. If the Company does not exercise both renewal options or exercises the first but not the second, it would record a loss related to the disposal of the underlying assets in operating results of $4.1 million in fiscal 2024 or $0.8 million in fiscal 2029.

Construction on a second manufacturing facility in Guadalajara, Mexico began in fiscal 2018, resulting in an additional $11.6 million of non-cash financing obligations that were capitalized as of September 28, 2019. As of September 29, 2018, the balance of the related financing obligation totaled $7.2 million. This obligation will be increased as construction costs are incurred and also by interest expense and land rent expense, and reduced by contractual payments during the 25-year lease term. The lease contains a 15-year base lease agreement with two 5-year renewal options. The obligation is included in the "Thereafter" line of the scheduled maturities of capital lease obligations table above, as well as in long-term debt and capital lease obligations, net of current portion, on the accompanying Consolidated Balance Sheets as of September 28, 2019.

The future minimum payments under the remainder of the leases for the two facilities in Guadalajara, which are leased under 10-year and 15-year base lease agreements, as well as the two 5-year renewal options for each lease are as follows (in thousands):



2020	$	4,332
2021	4,441
2022	4,552
2023	4,665
2024	4,782
Thereafter (2025 - 2044, through both five-year renewal options for each building)	96,268
Total	$	119,040