Financing Agreement

3 Months Ended

Mar. 31, 2014

Note 3. Financing Agreements

Debt and capital lease obligations and the average related interest rates were as follows (in thousands):



	Average interest rate at March 31, 2014	Maturity	March 31, 2014		December 31, 2013
Revolving loan facility	1.14%	January 2018	$	100,000	$	80,500
Senior notes - fixed rate	3.81%	May 2018	25,000		25,000
Senior notes - fixed rate	4.60%	May 2021	75,000		75,000
Senior notes - fixed rate	3.13%	December 2020	100,000		100,000
Capital lease obligations	4.82%	Various through 2029	31,799		7,123
Total debt and capital lease obligations			$	331,799	$	287,623
Less: current maturities			3,076		3,281
Total long-term debt and capital lease obligations			$	328,723	$	284,342

In August 2011, Polaris entered into a $350,000,000 unsecured revolving loan facility. In January 2013, Polaris amended the loan facility to provide more beneficial covenant and interest rate terms and extend the expiration date from August 2016 to January 2018. Interest is charged at rates based on LIBOR or “prime.”

In December 2010, the Company entered into a Master Note Purchase Agreement to issue $25,000,000 of unsecured senior notes due May 2018 and $75,000,000 of unsecured senior notes due May 2021 (collectively, the “Senior Notes”). The Senior Notes were issued in May 2011. In December 2013, the Company entered into a First Supplement to Master Note Purchase Agreement, under which the Company issued $100,000,000 of unsecured senior notes due December 2020.

The unsecured revolving loan facility and the Master Note Purchase Agreement contain covenants that require Polaris to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. Polaris was in compliance with all such covenants as of March 31, 2014.

A property lease agreement for a manufacturing facility which Polaris began occupying in Opole, Poland commenced in February 2014. The Poland property lease is accounted for as a capital lease.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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