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LONG-TERM DEBT | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following:
|  |  | December 31, |  |  |  |  |  |
| Effective |  | 2019 |  |  |  | 2018 |  |
In millions | Interest Rate |  | Book Value |  | Fair Value 1 |  | Book Value |  | Fair Value 1
Senior Credit Facility: |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated Term Loans, net of unamortized debt issuance costs of $1.1 and $1.2 | 3.1 | % |  | $ | 684.7 |  |  | $ | 684.7 |  |  | $ | 338.1 |  |  | $ | 338.1 |
Multi-Currency Revolving loan facility net of unamortized debt issuance costs of $0.9 and $1.9 | 3.4 | % |  | 231.5 |  |  | 231.5 |  |  | — |  |  | — |
Floating Senior Notes, due 2021, net of unamortized debt issuance costs of $2.0 and $3.2 | 3.9 | % |  | 498.0 |  |  | 500.0 |  |  | 496.8 |  |  | 497.4 |
4.375% Senior Notes, due 2023, net of unamortized discount and debt issuance costs of $0.9 and $1.2 | 4.5 | % |  | 249.1 |  |  |  | 263.9 |  |  | 248.8 |  |  |  | 254.2 |
4.15% Senior Notes, due 2024, net of unamortized debt issuance costs of $5.7 and $7.0 | 4.6 | % |  | 744.3 |  |  | 805.5 |  |  | 743.0 |  |  | 727.4 |
4.70% Senior Notes, due 2028, net of unamortized debt issuance costs of $9.2 and $10.3 | 5.0 | % |  | 1,240.8 |  |  | 1,378.3 |  |  | 1,239.7 |  |  | 1,179.6 |
3.45% Senior Notes, due 2026, net of unamortized debt issuance costs of $1.5 and $1.7 | 3.5 | % |  | 748.5 |  |  | 759.1 |  |  | 748.3 |  |  | 675.1 |
Other Borrowings |  |  | 32.4 |  |  | 32.4 |  |  | 42.2 |  |  | 42.2 |
Total |  |  | 4,429.3 |  |  | 4,655.4 |  |  | 3,856.9 |  |  | 3,714.0 |
Less - current portion |  |  | 95.7 |  |  | 95.7 |  |  | 64.1 |  |  | 64.1 |
Long-term portion |  |  | $ | 4,333.6 |  |  | $ | 4,559.7 |  |  | $ | 3,792.8 |  |  | $ | 3,649.9 |
1 See Note 19 for information on the fair value measurement of the Company's long-term debt.
As of December 31, 2019, the annual repayment requirements for debt obligations are as follows: |
In millions |
2020 | $ | 95.7 |
2021 | 809.8 |
2022 | 300.0 |
2023 | 479.0 |
2024 | 755.5 |
Thereafter | 1,989.3 |
Total | $ | 4,429.3 |
For those debt securities that have a premium or discount at the time of issuance, the Company amortizes the amount through interest expense based on the maturity date or the first date the holders may require the Company to repurchase the debt securities, if applicable. A premium would result in a decrease in interest expense, and a discount would result in an increase in interest expense in future periods. Additionally, the Company has debt issuance costs related to certain financing transactions which are also amortized through interest expense. As of December 31, 2019 and 2018, the Company had total unamortized debt issuance costs of $21.3 million and $26.5 million, respectively. Debt Transactions See Note 3 for further information regarding the Company’s acquisition of GE Transportation. Senior Notes On September 14, 2018 in order to fund the GE Acquisition and related fees and expenses, we issued a total of $2.5 billion in aggregate principal amount of unsecured senior notes (in two separate series of fixed rate unsecured senior notes “Senior Notes” and one series of floating rate unsecured senior notes “Floating Senior Notes”). We collectively refer to the Floating Senior Notes and the Senior Notes as the “Notes.” Upon issuance, the Senior Notes and Floating Senior Notes were reflected on our Consolidated Balance Sheets net of discount of $2.9 million and net of the capitalized debt issuance costs, including commissions and offering expenses of $18.0 million, both of which will be amortized in interest expense through the respective maturity dates of each series of unsecured senior notes using the effective interest method. The Floating Senior Notes bear interest at a floating rate equal to the three-month LIBOR rate plus 1.050% per year; the Senior Notes due 2024 bear interest at 4.150% per year; and the Senior Notes due 2028 bear interest at 4.700% per year. The interest rate payable on the Notes will be subject to adjustment based on certain rating events. Interest on the Senior Notes is payable semi-annually in arrears on March 15th and September 15th of each year, commencing on March 15, 2019. Interest on the Floating Senior Notes is payable quarterly in arrears on December 15, March 15, June 15, and September 15 of each year, which commenced on December 15, 2018. The issuance was comprised of the following three series of notes:
Senior Notes (in millions) |  | Par Value |  | Discount at Issuance |  | Net Price at Issuance |  | Issuance Cost |  | Net Proceeds
Floating Senior Notes due 2021 |  | $ | 500.0 |  |  | $ | — |  |  | $ | 500.0 |  |  | $ | 3.5 |  |  | $ | 496.5 |
4.15% Senior Notes due 2024 |  | 750.0 |  |  | 1.5 |  |  | 748.5 |  |  | 7.4 |  |  | 741.1 |
4.70% Senior Notes due 2028 |  | 1,250.0 |  |  | 1.4 |  |  | 1,248.6 |  |  | 10.6 |  |  | 1,238.0 |
Total |  | $ | 2,500.0 |  |  | $ | 2.9 |  |  | $ | 2,497.1 |  |  | $ | 21.5 |  |  | $ | 2,475.6 |
Consistent with the Company's existing senior notes, the newly issued Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The indenture under which the Notes were issued contains covenants and restrictions which limit among other things, the following: the incurrence of indebtedness, payment of dividends and certain distributions, sales of assets, change in control, mergers and consolidations and the incurrence of liens. But the covenants do not require the Company to maintain any financial ratios or specified levels of net worth or liquidity. The Company may redeem each series of the Notes at any time in whole or from time to time in part in accordance with the provisions of the indenture, under which such series of Notes was issued. Upon the occurrence of a change of control repurchase event with respect to the Notes, each holder of the Notes has the right to require the Company to purchase that holder’s Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, unless the Company has exercised its option to redeem all the Notes. On February 12, 2019, the rating assigned by Moody's was decreased to Ba1. Accordingly, pursuant to the respective terms of the Senior Notes issued on September 14, 2018, the interest rate increased by 0.25%. The interest rate increase took effect from the next interest period following February 12, 2019. The Company is in compliance with the restrictions and covenants in the indenture under which the Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities. Term Loan Agreement On June 8, 2018, the Company arranged (i) a $350.0 million term loan with proceeds used to refinance existing loans (the “Refinancing Term Loan”), and (ii) a new $400.0 million delayed draw term loan in order to fund the GE Acquisition and related fees and expenses (the “Delayed Draw Term Loan”). The Company collectively refers to the Refinance Term Loans and the Delayed Draw Term Loans as the “Term Loans.” Consistent with our other debt securities, the Term Loan Agreement includes covenants that, among other things, limit our liens and the liens of certain of our consolidated subsidiaries. In addition, it requires us to maintain the same financial maintenance covenants as discussed below. Loans under the Term Loan bear interest at a variable rate based on, at the Company’s option, either the ABR rate or the LIBOR rate (each as defined in the Term Loan Agreement) plus an applicable margin that is determined based on our credit ratings or the Company’s ratio of total debt (less unrestricted cash up to $300.0 million) to EBITDA (“Leverage Ratio”). As of December 31, 2019, the applicable margin was 0.375% for base rate loans and 1.375% for Eurodollar rate loans. Senior Credit Facility On June 8, 2018, the Company entered into a credit agreement (the “Senior Credit Facility”), which replaced the Company’s then-existing “2016 Refinancing Credit Agreement.” The Senior Credit Facility is with a syndicate of lenders and provides for borrowings consisting of (i) term loans denominated in euros and U.S. dollars; and (ii) a multi-currency revolving loan facility, providing for an equivalent in U.S. dollars of up to $1,200.0 million in multi-currency revolving loans (inclusive of swingline loans of up to $75.0 million and letters of credit of up to $450.0 million). The multi-currency revolving loan facility will mature on June 8, 2023, and the Term Loans will mature on June 8, 2021. Subject to any mandatory or optional prepayments, the Term Loans are required to be repaid on a quarterly basis in an amount equal to 2.5% of the principal amount drawn, with the final payment due at maturity. The following table presents availability under our credit facilities:
(in millions) |  | Multi-currency revolving loan facility
Maximum Availability |  | $ | 1,200.0 |
Outstanding Borrowings |  | 232.0 |
Letters of Credit Under Credit Agreement |  | 30.0 |
Current Availability |  | $ | 938.0 |
Under the Senior Credit Facility, we can elect to receive advances bearing interest based on either the ABR rate or the LIBOR rate (each as defined in the Credit Agreement) plus an applicable margin that is determined based on our credit ratings or the Company’s Leverage Ratio. As of December 31, 2019, the applicable margin was 0.375% for base rate advances and 1.375% for LIBOR rate advances. The Company also pays fees related to the Senior Credit Facility. The largest of these fees is a commitment fee on the unused portion of the multi-currency revolving loan facility of 0.10% to 0.30% per annum (currently 0.15% per annum), depending on our credit ratings or Leverage Ratio. None of the fees were material to interest expense. The obligations under the Senior Credit Facility are guaranteed by Wabtec and each of Wabtec’s wholly owned subsidiaries (collectively, the “Subsidiary Guarantors”). In addition, the Senior Credit Facility contains a number of customary affirmative and negative covenants. In addition to other and customary covenants, the Senior Credit Facility require that we maintain the financial covenants listed below as of the end of each fiscal quarter for the period of four fiscal quarters then ended. The Company was in compliance with all of our covenants in the Credit Agreement and the Term Loans as of December 31, 2019.
Interest Coverage Ratio 1 |  | 3.0x
Leverage Ratio 2 |  | 3.25x
1. The interest coverage ratio is defined as EBITDA, as defined in the Credit Agreement and Term Loan Agreement, to net interest expense for the four quarters then ended. 2. The leverage ratio is defined as net debt as of the last day of such fiscal quarter to EBITDA, as defined in the Amendment Credit Agreement and Term Loan Agreement, for the four quarters then ended. The 2018 Senior Credit Facility contains an uncommitted accordion feature allowing the Company to request the establishment, in an aggregate amount not to exceed $600.0 million, of incremental borrowing commitments under the Revolving Credit Facility or of incremental term loan commitment. At December 31, 2019, the weighted average interest rate on the Company’s variable rate debt was 3.08%. Cash Pooling Wabtec aggregates the Company's domestic cash position on a daily basis. Outside the United States, the Company uses cash pooling arrangements with banks to help manage our liquidity requirements. In these pooling arrangements, Wabtec subsidiary “Participants” agree with a single bank that the cash balances of any of the pool Participants with the bank will be subject to a full right of set-off against amounts other Participants owe the bank, and the bank provides for overdrafts as long as the net balance for all Participants does not exceed an agreed-upon level. Typically, each Participant pays interest on outstanding overdrafts and receives interest on cash balances. The Company's Consolidated Balance Sheets reflect cash, net of bank overdrafts, under all pooling arrangements.

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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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