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Credit Agreements | 12 Months Ended
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Sep. 30, 2020
Debt Disclosure [Abstract] |
Credit Agreements | 14. Credit Agreements The Company was obligated under the following debt instruments (in millions):
|  | September 30, 2020 |
|  | Principal |  |  | Debt Issuance Costs |  |  | Debt, Net |
Senior Term Loan |  | $ | 225.0 |  |  | $ | (0.3 | ) |  | $ | 224.7 |
4.600% Senior notes due May 2028 |  |  | 300.0 |  |  |  | (3.0 | ) |  |  | 297.0 |
3.100% Senior notes due March 2030 |  |  | 300.0 |  |  |  | (3.8 | ) |  |  | 296.2 |
|  | $ | 825.0 |  |  | $ | (7.1 | ) |  | $ | 817.9 |
Other short-term debt |  |  |  |  |  |  |  |  |  | $ | 5.2 |
|  | September 30, 2019 |
|  | Principal |  |  | Debt Issuance Costs |  |  | Debt, Net |
Senior Term Loan |  | $ | 275.0 |  |  | $ | (0.6 | ) |  | $ | 274.4 |
5.375% Senior notes due March 2025 |  |  | 250.0 |  |  |  | (2.0 | ) |  |  | 248.0 |
4.600% Senior notes due May 2028 |  |  | 300.0 |  |  |  | (3.4 | ) |  |  | 296.6 |
|  | $ | 825.0 |  |  | $ | (6.0 | ) |  | $ | 819.0 |
On April 3, 2018, the Company entered into a Second Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for (i) an unsecured revolving credit facility (the “Revolving Credit Facility”) that matures in April 2023 with an initial maximum aggregate amount of availability of $850 million and (ii) an unsecured $325 million term loan (the “Term Loan”) due in quarterly principal installments of $4.1 million commencing September 30, 2019 with a balloon payment of $264.1 million due at maturity in April 2023. The Company has prepaid all required quarterly principal installments and $39.1 million of the balloon payment on the Term Loan. At September 30, 2020, outstanding letters of credit of $59.9 million reduced the available capacity under the Revolving Credit Facility to $790.1 million. Under the Credit Agreement, the Company is obligated to pay (i) an unused commitment fee ranging from 0.125% to 0.275% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement and (ii) a fee ranging from 0.563% to 1.75% per annum of the maximum amount available to be drawn for each letter of credit issued and outstanding under the Credit Agreement. Borrowings under the Credit Agreement bear interest at a variable rate equal to (i) LIBOR plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied, or (ii) for dollar-denominated loans only, the base rate (which is the highest of (a) the administrative agent’s prime rate, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied. At September 30, 2020, the interest spread on the Revolving Credit Facility and Term Loan was 125 basis points. The weighted-average interest rate on borrowings outstanding under the Term Loan at September 30, 2020 was 1.40%. The Credit Agreement contains various restrictions and covenants, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions, subject to certain exceptions, on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness, and dispose of substantially all assets. The Credit Agreement contains the following financial covenants:
| • | Leverage Ratio: A maximum leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to consolidated net income for the previous four quarters before interest, taxes, depreciation, amortization, non-cash charges and certain other items (EBITDA)) as of the last day of any fiscal quarter of 3.75 to 1.00.
| • | Interest Coverage Ratio: A minimum interest coverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated EBITDA to the Company’s consolidated cash interest expense for the previous four quarters) as of the last day of any fiscal quarter of 2.50 to 1.00.
The Company was in compliance with the financial covenants contained in the Credit Agreement as of September 30, 2020. In March 2015, the Company issued $250.0 million of 5.375% unsecured senior notes due March 1, 2025 (the “2025 Senior Notes”). In May 2018, the Company issued $300.0 million of 4.600% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). The Company used the net proceeds from the sale of the 2028 Senior Notes to repay certain outstanding notes of the Company and to pre-pay $49.2 million of quarterly principal installment payments under the Term Loan. On February 26, 2020, the Company issued $300.0 million of 3.100% unsecured senior notes due March 1, 2030 (the “2030 Senior Notes”) at a discount of $1.2 million. The Company used a portion of the net proceeds from the sale of the 2030 Senior Notes to redeem all of the outstanding 2025 Senior Notes. The Company used the remaining net proceeds to pre-pay all outstanding future quarterly principal installments, as well as pay down a portion of the balloon payment due at maturity on the Term Loan. The Company recognized approximately $8.5 million of expense associated with the 2030 Senior Notes transaction, comprised of unamortized debt issuance costs and call premium costs on the 2025 Senior Notes. Expenses related to the transaction are included in interest expense. Additionally, approximately $2.9 million of debt issuance costs were capitalized to long-term debt in connection with the transaction. The 2028 Senior Notes and the 2030 Senior Notes were issued pursuant to an indenture (the “Indenture”) between the Company and a trustee. The indenture contains customary affirmative and negative covenants. The Company has the option to redeem the 2028 and 2030 Senior Notes at any time for a premium. In September 2019, the Company entered into a 220.0 million Chinese renminbi uncommitted line of credit to provide short-term finance support to operations in China. There was 35.0 million Chinese renminbi ($5.2 million) outstanding on the uncommitted line of credit at September 30, 2020. The line of credit carries a variable interest rate that is set by the lender, which was 3.5% at September 30, 2020. The fair value of the long-term debt is estimated based upon Level 2 inputs to reflect market rate of the Company’s debt. At September 30, 2020, the fair value of the 202 8 Senior Notes and the 20 30 Senior Notes was estimated to be $342 million ($322 million at September 30, 2019) and $316 million, respectively. The fair value of the Term Loan approximated book value at both September 30, 2020 and 2019. See Note 2 2 of the Notes to Consolidated Financial Statements for the definition of a Level 2 input.

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- 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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