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Long-Term Debt | 9 Months Ended
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Sep. 30, 2019
Long-Term Debt |
Long-Term Debt | 10. Long-Term Debt ​ Long-term debt consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, |  | December 31, | ​
​ | ​ | 2019 | ​ | 2018 |
U.S. credit agreement — revolving credit line | ​ | $ | 105.0 | ​ | $ | 30.0 | ​
U.K. credit agreement — revolving credit line | ​ |  | 154.9 | ​ |  | 163.3 | ​
U.K. credit agreement — overdraft line of credit | ​ |  | — | ​ |  | 1.8 | ​
3.75% senior subordinated notes due 2020 | ​ | ​ | 298.9 | ​ | ​ | 297.9 | ​
5.75% senior subordinated notes due 2022 | ​ |  | 547.4 | ​ |  | 546.8 | ​
5.375% senior subordinated notes due 2024 | ​ | ​ | 297.9 | ​ | ​ | 297.6 | ​
5.50% senior subordinated notes due 2026 | ​ | ​ | 495.6 | ​ | ​ | 495.1 | ​
Australia capital loan agreement | ​ | ​ | 30.9 | ​ | ​ | 33.6 | ​
Australia working capital loan agreement | ​ | ​ | — | ​ | ​ | 6.1 | ​
Mortgage facilities | ​ |  | 397.3 | ​ |  | 289.6 | ​
Other | ​ |  | 51.4 | ​ |  | 54.9 | ​
Total long-term debt | ​ |  | 2,379.3 | ​ |  | 2,216.7 | ​
Less: current portion | ​ |  | (96.8) | ​ |  | (92.0) | ​
Net long-term debt | ​ | $ | 2,282.5 | ​ | $ | 2,124.7 | ​
​ U.S. Credit Agreement ​ Our U.S. credit agreement (the “U.S. credit agreement”) with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation provides for up to $700.0 million in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, which includes $250.0 million in revolving loans solely for future acquisitions. The U.S. credit agreement provides for a maximum of $150.0 million of future borrowings for foreign acquisitions and expires on September 30, 2022. In July 2019, we amended the U.S. credit agreement to provide for the issuance of up to $50 million of letters of credit within the existing $700 million facility limit. The revolving loans bear interest at LIBOR plus 2.00%, subject to an incremental 1.50% for uncollateralized borrowings in excess of a defined borrowing base. ​ The U.S. credit agreement is fully and unconditionally guaranteed on a joint and several basis by substantially all of our U.S. subsidiaries and contains a number of significant covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, repay certain other indebtedness, pay dividends, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. We are also required to comply with specified financial and other tests and ratios, each as defined in the U.S. credit agreement including: a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders’ equity and a ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed. ​ The U.S. credit agreement also contains typical events of default, including change of control, non-payment of obligations and cross-defaults to our other material indebtedness. Substantially all of our U.S. assets are subject to security interests granted to the lenders under the U.S. credit agreement. As of September 30, 2019, we had $105.0 million outstanding under the U.S. credit agreement. ​ U.K. Credit Agreement ​ Our subsidiaries in the U.K. (the “U.K. subsidiaries”) are party to a £150.0 million revolving credit agreement with the National Westminster Bank plc and BMW Financial Services (GB) Limited, and an additional demand overdraft line of credit (collectively, the “U.K. credit agreement”) to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes. The loans mature on the termination date of the facility, which is December 12, 2023. The revolving loans bear interest between defined LIBOR plus 1.10% and defined LIBOR plus 2.10%. The U.K. credit agreement also includes a £100.0 million “accordion” feature which allows the U.K. subsidiaries to request up to an additional £100.0 million of facility capacity. The lenders may agree to provide the additional capacity, and, if not, the U.K. subsidiaries may add an additional lender, if available, to the facility to provide such additional capacity. As of September 30, 2019, outstanding loans under the U.K. credit agreement amounted to £126.0 million ($154.9 million). ​ The U.K. credit agreement is fully and unconditionally guaranteed on a joint and several basis by our U.K. subsidiaries, and contains a number of significant covenants that, among other things, restrict the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including: a ratio of earnings before interest, taxes, amortization, and rental payments (“EBITAR”) to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio. A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. ​ The U.K. credit agreement also contains typical events of default, including change of control and non-payment of obligations and cross-defaults to other material indebtedness of our U.K. subsidiaries. Substantially all of our U.K. subsidiaries’ assets are subject to security interests granted to the lenders under the U.K. credit agreement. ​ Senior Subordinated Notes ​ We have issued the following senior subordinated notes: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Description |  | Maturity Date |  | Interest Payment Dates | ​ | Principal Amount
3.75% Notes |  | August 15, 2020 | ​ | February 15, August 15 | ​ | $300 million
5.75% Notes |  | October 1, 2022 | ​ | April 1, October 1 | ​ | $550 million
5.375% Notes |  | December 1, 2024 | ​ | June 1, December 1 | ​ | $300 million
5.50% Notes |  | May 15, 2026 | ​ | May 15, November 15 | ​ | $500 million
​ Each of these notes are our unsecured, senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries. Each also contain customary negative covenants and events of default. If we experience certain “change of control” events specified in the indentures, holders of these notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. We classify our 3.75% Notes due August 15, 2020 as long-term debt as we have the intent and ability to refinance the obligation on a long-term basis with the availability of our U.S. Credit Agreement. ​ Optional redemption. At any time, we may redeem the 3.75% Notes at a redemption price equal to 100% of the principal amount of the 3.75% Notes, plus an applicable make whole premium, and any accrued and unpaid interest. We may redeem the 5.75% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. Prior to December 1, 2019, we may redeem the 5.375% Notes at a redemption price equal to 100% of the principal amount of the 5.375% Notes, plus an applicable make whole premium, and any accrued and unpaid interest. On or after December 1, 2019, we may redeem the 5.375% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. Prior to May 15, 2021, we may redeem the 5.50% Notes at a redemption price equal to 100% of the principal amount of the 5.50% Notes, plus an applicable make whole premium, and any accrued and unpaid interest. On or after May 15, 2021, we may redeem the 5.50% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. We had the option to redeem up to 40% of the 5.50% Notes using the proceeds of specified equity offerings at any time prior to May 15, 2019 at a price specified in the indenture. ​ Australia Loan Agreements ​ Penske Commercial Vehicles Australia and Penske Power Systems are party to two facilities with Volkswagen Financial Services Australia Pty Limited representing a five year AU $50.0 million capital loan and a one-year AU $50.0 million working capital loan. Both facilities are subject to annual extensions. These agreements each provide the lender with a secured interest in all assets of these businesses. The loans bear interest at the Australian BBSW 30-day Bill Rate plus 3.0%. Irrespective of the term of the agreements, both agreements provide the lender with the ability to call the loans on 90 days’ notice. These facilities are also guaranteed by our U.S. parent company up to AU $50.0 million. As of September 30, 2019, we had AU $45.8 million ($30.9 million) outstanding under the capital loan agreement and no outstanding borrowings under the working capital loan agreement. ​ Mortgage Facilities ​ We are party to several mortgages that bear interest at defined rates and require monthly principal and interest payments. These mortgage facilities also contain typical events of default, including non-payment of obligations, cross-defaults to our other material indebtedness, certain change of control events, and the loss or sale of certain franchises operated at the properties. Substantially all of the buildings and improvements on the properties financed pursuant to the mortgage facilities are subject to security interests granted to the lender. As of September 30, 2019, we owed $397.3 million of principal under our mortgage facilities.

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