Debt

9 Months Ended

Apr. 03, 2021

Debt

Debt

6. Debt

Short-term debt consists of the following (carrying balances in thousands):

	April 3,		June 27,		April 3,		June 27,
	2021		2020		2021		2020
	Interest Rate				Carrying Balance
Bank credit facilities and other	0.93	%	5.69	%	$	43	$	51
Accounts receivable securitization program	—		—			—		—
Public notes due December 2021	3.75	%	—			300,000		—
Short-term debt					$	300,043	$	51

Bank credit facilities and other consists primarily of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the working capital requirements of the Company including its foreign operations.

In July 2020, the Company amended and extended for one year, its trade accounts receivable securitization program (the “Securitization Program”) in the United States with a group of financial institutions to allow the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings up to a maximum of $450 million. The Securitization Program does not qualify for off balance sheet accounting treatment and any borrowings under the Securitization Program are recorded as debt in the consolidated balance sheets. Under the Securitization Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within “Receivables” in the consolidated balance sheets, totaled $683.3 million and $703.8 million at April 3, 2021 and June 27, 2020, respectively. The Securitization Program contains certain covenants relating to the quality of the receivables sold. Interest on borrowings is calculated using a one-month LIBOR rate plus a spread of 1.05%. The facility fee on the unused balance of the facility is up to 0.40%.

During the third quarter of fiscal 2021, the Company committed to an early redemption of all $300 million of its outstanding 3.75% Public notes due December 2021. The loss on debt extinguishment, primarily related to a contractual make-whole premium, is expected to be approximately $5 million and will be classified as a component of other income (expense), net upon redemption of the notes, which is expected to occur on April 30, 2021.

Long-term debt consists of the following (carrying balances in thousands):

	April 3,		June 27,		April 3,		June 27,
	2021		2020		2021		2020
	Interest Rate				Carrying Balance
Revolving credit facilities:
Credit Facility (due June 2023)	—		1.28	%	$	—	$	230,000
Public notes due:
December 2021	—		3.75	%		—		300,000
December 2022	4.88	%	4.88	%		350,000		350,000
April 2026	4.63	%	4.63	%		550,000		550,000
Other long-term debt	1.21	%	1.19	%		1,312		1,491
Long-term debt before discount and debt issuance costs						901,312		1,431,491
Discount and debt issuance costs – unamortized						(5,399)		(6,700)
Long-term debt					$	895,913	$	1,424,791

The Company has a five-year $1.25 billion senior unsecured revolving credit facility (the “Credit Facility”) with a syndicate of banks, consisting of revolving credit facilities and the issuance of up to $200.0 million of letters of credit and up to $300.0 million of loans in certain approved currencies, which expires in June 2023. Subject to certain conditions, the Credit Facility may be increased up to $1.50 billion. Under the Credit Facility, the Company may select from various interest rate options, currencies and maturities. The Credit Facility contains certain covenants including various limitations on debt incurrence, share repurchases, dividends, investments and capital expenditures. The Credit Facility also includes financial covenants, which were amended during the first quarter of fiscal 2021, requiring the Company to maintain minimum interest coverage and leverage ratios, which the Company was in compliance with as of April 3, 2021, and June 27, 2020.

As of April 3, 2021, and June 27, 2020, there were $1.3 million and $1.6 million, respectively, in letters of credit issued under the Credit Facility.

As of April 3, 2021, the carrying value and fair value of the Company’s total debt was $1.20 billion and $1.28 billion, respectively. At June 27, 2020, the carrying value and fair value of the Company’s total debt was $1.42 billion and $1.52 billion, respectively. Fair value for the public notes was estimated based upon quoted market prices and for

other forms of debt fair value approximates carrying value due to the market based variable nature of the interest rates on those debt facilities.