Long-Term Debt

9 Months Ended

Sep. 30, 2020

LONG-TERM DEBT

Long-term debt consisted of the following:


	Effective		September 30, 2020			December 31, 2019
In millions	Interest Rate		Book Value		Fair Value 1	Book Value		Fair Value 1
Senior Credit and 364 Day Facility:
U.S. dollar-denominated Term Loans, net of unamortized debt issuance costs of $1.3 and $1.1	2.3	%	754.7		754.7	684.7		684.7
Multi-Currency Revolving loan facility net of unamortized debt issuance costs of $1.1 and $0.9	1.5	%	—		—	231.5		231.5
Floating Senior Notes, due 2021, net of unamortized debt issuance costs of $0 and $2.0	—	%	—		—	498.0		500.0
4.375% Senior Notes, due 2023, net of unamortized discount and debt issuance costs of $0.7 and $0.9	4.5	%	249.3		263.9	249.1		263.9
4.15% Senior Notes, due 2024, net of unamortized debt issuance costs of $4.7 and $5.7	4.6	%	745.3		810.4	744.3		805.5
3.20% Senior Notes, due 2025, net of unamortized debt discount and debt issuance costs of $4.6 and $0	3.4	%	495.4		523.8	—		—
3.45% Senior Notes, due 2026, net of unamortized debt issuance costs of $1.3 and $1.5	3.5	%	748.7		793.7	748.5		759.1
4.70% Senior Notes, due 2028, net of unamortized debt issuance costs of $8.5 and $9.2	5.0	%	1,241.5		1,448.2	1,240.8		1,378.3
Other Borrowings			19.8		19.8	32.4		32.4
Total			4,254.7		4,614.5	4,429.3		4,655.4
Less - current portion			454.8			95.7
Long-term portion			$	3,799.9		$	4,333.6

1. See Note 14 for information on the fair value measurement of the Company's long-term debt.

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 September 30, 2020 and December 31, 2019, the Company had total unamortized debt issuance costs of $22.2 million and $21.3 million, respectively.

At September 30, 2020, the weighted average interest rate on the Company’s variable rate debt was 2.3%.

Credit Facilities

Senior Credit Facility

On June 8, 2018, the Company entered into a credit agreement ("Senior Credit Facility"), which replaced the Company's then-existing 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 ("Term Loans"); 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 "Revolving Credit Facility")). The Revolving Credit Facility will mature on June 8, 2023.

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 Senior Credit Facility) plus an applicable margin that is determined based on our credit ratings or the Company’s Leverage. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. The obligations under the Senior Credit Facility are guaranteed by Wabtec and certain of Wabtec’s U.S. subsidiaries, as guarantors.

The Company has agreed that, so long as any lender has any commitment under the Senior Credit Facility, any letter of credit is outstanding under the Senior Credit Facility, or any loan or other obligation is outstanding under the Senior Credit Facility, it will maintain the following as of the end of each fiscal quarter or the period of four quarters then ended:


Interest Coverage Ratio 1						3.0x
Leverage Ratio 2						3.25x

1. The interest coverage ratio is defined as EBITDA, as defined in the Senior Credit Facility, 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 Senior Credit Facility, for the four quarters then ended. The Leverage Ratio temporarily increases for four quarters following major acquisitions. Subsequent to the GE Transportation acquisition, the leverage ratio was temporarily increased to 3.5x for the first and second quarters of 2020.

The Company was in compliance with all of our covenants in the Senior Credit Facility as of September 30, 2020.

364 Day Facility

On April 10, 2020 the Company entered into a new $600.0 million 364 day credit facility (“364 Day Facility”) maturing April 2021 with a group of banks which includes a $144.0 million revolving credit facility and a $456.0 million term loan. The agreement calls for interest at either a LIBOR-based rate, or a rate based on the prime lending rate of the agent bank, at the Company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type and substantially similar to our existing Senior Credit Facility. The obligations under the 364 Day Facility are guaranteed by certain of the Company's U.S. subsidiaries, as guarantors.

On June 12, 2020 the Company amended this 364 Day Facility maturity to July 9, 2021. The Company was in compliance with all of its covenants in the 364 Day Facility as of September 30, 2020.

The following table presents availability under the Revolving Facilities:


(in millions)	Revolving Credit Facility		364 Day Revolver
Maximum Availability	$	1,200.0	$	144.0
Outstanding Borrowings	—		—
Letters of Credit Under Revolving Facility	19.5		—
Current Availability	$	1,180.5	$	144.0

Senior Notes

The "Senior Notes" comprise the 4.375% Senior Notes due 2023, 4.15% Senior Notes due 2024, 3.20% Senior Notes due 2025, 3.45% Senior Notes due 2026 and 4.70% Senior Notes due 2028. Interest on the fixed-rate Senior Notes is payable semi-annually. 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. Each of the Senior Notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. The Senior 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.

On June 29, 2020 the Company issued $500.0 million of 3.20% Senior Notes due in 2025 (the "2025 Notes"). The 2025 Notes were issued at 99.892% of face value. Interest on the 2025 Notes accrues at a rate of 3.20% per annum and is payable semi-annually on June 15 and December 15 of each year beginning December 15, 2020. The proceeds were used to redeem the Floating Rate Senior Notes due 2021. The Company incurred $1.5 million of deferred financing costs related to the issuance of the 2025 Notes.

The indentures under which the Senior Notes were issued contain covenants and restrictions which limit, subject to certain exceptions, certain sale and leaseback transactions with respect to principal properties, the incurrence of secured debt without equally and ratably securing the Senior Notes, and certain merger and consolidation transactions. The covenants do not require the Company to maintain any financial ratios or specified levels of net worth or liquidity.

The Company is in compliance with the restrictions and covenants in the indentures under which the Senior Notes were issued and expects that these restrictions and covenants will not be a limiting factor in executing our operating activities.