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Debt | 9 Months Ended
--- | ---
Sep. 30, 2015
Debt Disclosure [Abstract] |
Debt | Debt Debt at September 30, 2015 and December 31, 2014 was as follows (in millions):
| September 30, 2015 |  | December 31, 2014
Allegheny Technologies 5.875% Notes due 2023 (a) | $ | 500.0 |  |  | $ | 500.0 |
Allegheny Technologies 5.95% Notes due 2021 | 500.0 |  |  | 500.0 |
Allegheny Technologies 9.375% Notes due 2019 | 350.0 |  |  | 350.0 |
Allegheny Ludlum 6.95% debentures due 2025 | 150.0 |  |  | 150.0 |
ATI Ladish Series B 6.14% Notes due 2016 (b) | — |  |  | 11.9 |
ATI Ladish Series C 6.41% Notes due 2015 (c) | — |  |  | 10.3 |
U.S. revolving credit facilities | — |  |  | — |
Foreign credit facilities | 1.7 |  |  | — |
Industrial revenue bonds, due through 2020, and other | 3.9 |  |  | 4.7 |
Total short-term and long-term debt | 1,505.6 |  |  | 1,526.9 |
Short-term debt and current portion of long-term debt | 4.0 |  |  | 17.8 |
Total long-term debt | $ | 1,501.6 |  |  | $ | 1,509.1 |
(a) | Bearing interest at 6.625% effective February 15, 2015.
(b) | Includes fair value adjustments of $0.4 million at December 31, 2014.
(c) | Includes fair value adjustments of $0.3 million at December 31, 2014.
During the first quarter of 2015, Standard & Poor’s (“S&P”) downgraded the Company’s credit rating one notch to BB+ from BBB-, and during the third quarter of 2015, Moody’s downgraded the Company’s credit rating one notch to Ba2 from Ba1. These downgrades resulted in an increase of the interest rate on the Senior Notes due 2023 (the “2023 Notes”) from 6.125% as of December 31, 2014 to 6.625% effective with the interest period beginning February 15, 2015. Additionally, on October 23, 2015, S&P downgraded the Company’s credit rating two notches, to BB-. This downgrade will result in an increase to the interest rate on the 2023 Notes to 7.125%, effective for the interest period beginning August 16, 2015, and represents an additional $2.5 million of interest expense measured on an annual basis. Future downgrades of the Company’s credit ratings by S&P or Moody’s could result in additional increases to the interest cost with respect to the 2023 Notes. Each notch of credit rating downgrade increases interest expense by 0.25% on the 2023 Notes, up to a maximum 4 notches for each of the two credit rating agencies, or a total 2.0% potential interest rate change, of which 1.25% has now occurred following the October 23, 2015 S&P credit rating change. During the third quarter of 2015, the Company prepaid $5.7 million in aggregate principal amount of its 6.14% ATI Ladish Series B senior notes due May 16, 2016 (the “Series B Notes”), representing all of the remaining outstanding Series B Notes. Also during the third quarter of 2015, the Company repaid the $10.0 million aggregate principal amount of its outstanding 6.41% ATI Ladish Series C senior notes, due September 2, 2015 (the “Series C Notes”). The Series B and C Notes were assumed by the Company in the 2011 Ladish acquisition. On September 23, 2015, the Company entered into a $400 million Asset Based Lending (“ABL”) Revolving Credit Facility, which includes a letter of credit sub-facility of up to $200 million. The ABL facility replaces a $400 million revolving credit facility originally entered into on July 31, 2007 (as amended, the “Prior Credit Facility”). Costs associated with entering into the ABL facility were $1.3 million, and are being amortized to interest expense over the 5-year term of the facility. The ABL facility matures in September 2020 and is collateralized by the accounts receivable and inventory of the Company’s domestic operations. The applicable interest rate for borrowings under the ABL facility includes interest rate spreads based on available borrowing capacity that range between 1.25% and 1.75% for LIBOR-based borrowings and between 0.25% and 0.75% for base rate borrowings. Compared to the Prior Credit Facility, the ABL facility contains no leverage or interest coverage ratios but does contain a financial covenant whereby the Company must maintain a fixed charge coverage ratio of not less than 1.00:1.00 after an event of default has occurred or if the undrawn availability under ABL facility is less than the greater of (i) 10% of the then applicable maximum borrowing amount or (ii) $40.0 million. Additionally, the Company must demonstrate liquidity, as calculated in accordance with the terms of the agreement, of at least $500 million on the date that is 91 days prior to June 1, 2019, the maturity date of the 9.375% Senior Notes due 2019, and such liquidity is available until the notes are paid in full or refinanced. There was no impact on the Company’s outstanding debt as a result of the ABL facility. There were no outstanding borrowings made under the ABL facility as of September 30, 2015, although approximately $4.6 million has been utilized to support the issuance of letters of credit. Average borrowings under the Prior Credit Facility for the first nine months of 2015 were $49.2 million, bearing an average annual interest rate of 2.4%. The Company has an additional separate credit facility for the issuance of letters of credit. As of September 30, 2015, $32 million in letters of credit were outstanding under this facility. Shanghai STAL Precision Stainless Steel Company Limited (STAL), the Company’s Chinese joint venture company in which ATI has a 60% interest, has a separate $20 million revolving credit facility entered into in April 2015. Borrowings under the STAL revolving credit facility are in U.S. dollars based on U.S. interbank offered rates. The credit facility is supported solely by STAL’s financial capability without any guarantees from the joint venture partners. The credit facility requires STAL to maintain a minimum level of shareholders’ equity, and certain financial ratios.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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