Debt

6 Months Ended

Jun. 30, 2019

Debt [Abstract]

Debt

Note 7. Debt

On April 12, 2017, the Company and certain of its subsidiaries entered into an amended and restated credit agreement whereby Wells Fargo extended to the Company an unsecured line of credit of up to $100,000, including a sub-limit for letters of credit of up to $30,000. In February 2019, the agreement was again amended to increase the unsecured line of credit to a maximum of $150,000 and to extend the maturity date to December 29, 2023. Other significant terms were left unchanged.  Outstanding borrowings under the agreement totaled $28,057 and $58,778 as of June 30, 2019 and December 31, 2018, respectively, which are included in long-term debt in the accompanying unaudited condensed consolidated balance sheets.  The highest borrowing amount outstanding at any time during the six-month period ended June 30, 2019 was $81,776.  Letters of credit totaling $8,630, including $3,200 of letters of credit issued to banks in Brazil to secure the local debt of Astec do Brasil Fabricacao de Equipamentos Ltda. (“Astec Brazil”), were outstanding under the credit facility as of June 30, 2019.  Additional borrowing available under the credit facility was $113,313 as of June 30, 2019.  Borrowings under the agreement are subject to an interest rate equal to the daily one-month LIBOR rate plus a 0.75% margin, resulting in a rate of 3.15% as of June 30, 2019. The unused facility fee is 0.125%. Interest only payments are due monthly. The amended and restated credit agreement contains certain financial covenants, including provisions concerning required levels of annual net income and minimum tangible net worth.

The Company’s South African subsidiary, Osborn Engineered Products SA (Pty) Ltd (“Osborn”), has a credit facility of $6,706 with a South African bank to finance short-term working capital needs, as well as to cover performance letters of credit, advance payment and retention guarantees. As of June 30, 2019, Osborn had no outstanding borrowings but had $1,222 in performance, advance payment and retention guarantees outstanding under the facility. The facility has been guaranteed by Astec Industries, Inc., but is otherwise unsecured. A 0.75% unused facility fee is charged if less than 50% of the facility is utilized. As of June 30, 2019, Osborn had available credit under the facility of $5,484. The interest rate is 0.25% less than the South Africa prime rate, resulting in a rate of 10.0% as of June 30, 2019.

The Company’s Brazilian subsidiary, Astec Brazil, has a $1,052 working capital loan outstanding as of June 30, 2019 from Brazilian banks with an interest rate of 10.4%.  The loan’s final monthly payment is due in April 2024 and the debt is secured by Astec Brazil’s manufacturing facility and also by letters of credit totaling $3,200 issued by Astec Industries, Inc.  Additionally, Astec Brazil has various five-year equipment financing loans outstanding with Brazilian banks in the aggregate of $18 as of June 30, 2019 that have interest rates ranging from 6.0% to 16.3%.  These equipment loans have maturity dates ranging from July 2019 to April 2020.  Astec Brazil’s loans are included in the accompanying unaudited condensed consolidated balance sheets as current maturities of long-term debt ($236) and long-term debt ($834) as of June 30, 2019.