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Credit Agreements | 9 Months Ended
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Jun. 30, 2021
Debt Disclosure [Abstract] |
Credit Agreements |
1 2. | Credit Agreements
The Company was obligated under the following debt instruments (in millions):
|  | June 30, 2021 |
|  | Principal |  |  | Debt Issuance Costs |  |  | Debt, Net |
Senior Term Loan |  | $ | 225.0 |  |  | $ | (0.2 | ) |  | $ | 224.8 |
4.600% Senior notes due May 2028 |  |  | 300.0 |  |  |  | (2.7 | ) |  |  | 297.3 |
3.100% Senior notes due March 2030 |  |  | 300.0 |  |  |  | (3.5 | ) |  |  | 296.5 |
|  | $ | 825.0 |  |  | $ | (6.4 | ) |  | $ | 818.6 |
|  | 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 |
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 June 30, 2021, outstanding letters of credit of $17.6 million reduced available capacity under the Revolving Credit Facility to $832.4 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 June 30, 2021, 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 June 30, 2021 was 1.35%. 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 June 30, 2021. In May 2018, the Company issued $300.0 million of 4.600% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). In February 2020, the Company issued $300.0 million of 3.100% unsecured senior notes due March 1, 2030 (the “2030 Senior Notes”). 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. As of June 30, 2021, there were no outstanding borrowings on the uncommitted line of credit. There was 35.0 million Chinese renminbi ($5.2 million) outstanding on the uncommitted line of credit as of September 30, 2020. The line of credit carries a variable interest rate that is set by the lender, which was 3.5% at both June 30, 2021 and 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 June 30, 2021, the fair value of the 2028 Senior Notes and the 2030 Senior Notes was estimated to be $346 million ($342 million at September 30, 2020) and $318 million ($316 million at September 30, 2020), respectively. The fair value of the Term Loan approximated book value at both June 30, 2021 and September 30, 2020. See Note 19 of the Notes to Condensed 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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