Debt



(In thousands)	2017			2016

Subordinated Debentures with interest at 6.00%, due 2027	$	284,536		$	—
Revolving Credit Facility with interest at 3.06%, due 2021	160,000			200,000
Jungwoo-Mueller credit facility with interest at 2.72%, due 2018	5,119			4,724
Jungwoo-Mueller credit facility with interest at 3.19%, due 2017	8,648			7,990
2001 Series IRB's with interest at 2.22%, due 2021	3,250			4,250
Mueller-Xingrong credit facility	—			3,048
Other	4,694			8,309
	466,247			228,321

Less debt issuance costs	(1,175		)	(957		)
Less current portion of debt	(16,480		)	(13,655		)

Long-term debt	$	448,592		$	213,709

Subordinated Debentures

On March 9, 2017, the Company distributed a special dividend of $3.00 in cash and $5.00 in principal amount of the Company’s 6% Subordinated Debentures (Debentures) due March 1, 2027 for each share of common stock outstanding. Interest on the Debentures is payable semiannually on September 1 and March 1 and commenced on September 1, 2017. At issuance, the Debentures were recorded at their estimated fair value. The fair value of the Debentures was estimated based on quoted market prices for the same or similar issues, the current rates offered to the Company for debt of the same remaining maturities, or the use of market standard models.

The Debentures are subordinated to all other funded debt of the Company and are callable, in whole or in part, at any time at the option of the Company, subject to declining call premiums during the first five years. The Debentures also grant each holder the right to require the Company to repurchase such holder’s Debentures in the event of a change in control at declining repurchase premiums during the first five years. The Debentures may be redeemed, subject to the conditions set forth above, at the following redemption price (expressed as a percentage of principal amount) plus any accrued but unpaid interest to, but excluding, the redemption date:

If redeemed during the 12-month period beginning March 9:



Year		Redemption Price

2017		106%
2018		105
2019		104
2020		103
2021		102
2022 and thereafter		100

The effect of the special dividend was a decrease in stockholders’ equity of approximately $458.7 million, an increase in long-term debt of approximately $284.5 million, and a decrease in cash of approximately $174.2 million.

Revolving Credit Facility

The Company’s Credit Agreement provides for an unsecured $350.0 million revolving credit facility (Revolving Credit Facility) that matures on December 6, 2021. Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at LIBOR or Base Rate as defined by the Credit Agreement, plus a variable premium. LIBOR advances may be based upon the one, three, or six-month LIBOR. The variable premium is based upon the Company’s debt to total capitalization ratio, and can range from 112.5 to 162.5 basis points for LIBOR based loans and 12.5 to 62.5 basis points for Base Rate loans. At December 30, 2017, the premium was 150.0 basis points for LIBOR loans and 50.0 basis points for Base Rate loans. Additionally, a commitment fee is payable quarterly on the total commitment less any outstanding loans or issued letters of credit, and varies from 15.0 to 30.0 basis points based upon the Company’s debt to total capitalization ratio. Availability of funds under the Revolving Credit Facility is reduced by the amount of certain outstanding letters of credit, which are used to secure the Company’s payment of insurance deductibles and certain retiree health benefits, totaling approximately $8.4 million at December 30, 2017. Terms of the letters of credit are generally renewable annually.

Jungwoo-Mueller

Jungwoo-Mueller has several secured revolving credit arrangements with a total borrowing capacity of KRW 29.9 billion (or approximately $27.5 million). Borrowings are secured by the real property and equipment of Jungwoo-Mueller.

Covenants contained in the Company’s financing obligations require, among other things, the maintenance of minimum levels of tangible net worth and the satisfaction of certain minimum financial ratios. At December 30, 2017, the Company was in compliance with all debt covenants.

Aggregate annual maturities of the Company’s debt are as follows:



(In thousands)	Amount

2018	$	16,480
2019	1,222
2020	1,222
2021	160,472
2022	222
Thereafter	286,629

Long-term debt	$	466,247

Net interest expense consisted of the following:



(In thousands)	2017			2016			2015

Interest expense	$	19,716		$	7,749		$	8,335
Capitalized interest	(214		)	(362		)	(668		)

	$	19,502		$	7,387		$	7,667

Interest paid in 2017, 2016, and 2015 was $13.8 million, $7.1 million, and $8.1 million, respectively.