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INDEBTEDNESS | 12 Months Ended
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Oct. 31, 2018
Debt Disclosure [Abstract] |
INDEBTEDNESS |
6 | INDEBTEDNESS
The following is a summary of the company's indebtedness (in thousands):
October 31 |  | 2018 |  | 2017
Revolving credit facility |  | $ | 91,000 |  |  | $ | — |
7.800% Debentures |  | 100,000 |  |  | 100,000 |
6.625% Senior Notes |  | 123,854 |  |  | 123,792 |
Term loan |  | — |  |  | 100,750 |
4% Unsecured Note |  | — |  |  | 10,008 |
Less: unamortized discounts, debt issuance costs and deferred charges |  | (2,305 | ) |  | (2,663 | )
Total long-term debt |  | 312,549 |  |  | 331,887 |
Less: current portion of long-term debt |  | — |  |  | 26,258 |
Long-term debt, less current portion |  | $ | 312,549 |  |  | $ | 305,629 |
Principal payments required on indebtedness in each of the next five fiscal years ending October 31 are as follows: 2019, $0.0 million; 2020, $0.0 million; 2021, $0.0 million; 2022, $0.0 million; 2023, $91.0 million; and after 2023, $225.0 million. Revolving Credit Facility In June 2018, the company replaced its prior revolving credit facility and term loan, which were scheduled to mature in October 2019, with an unsecured senior five-year revolving credit facility that, among other things, increases the company's borrowing capacity to $600 million, from $150 million, and expires in June 2023. Included in the company's $600 million revolving credit facility is a $10 million sublimit for standby letters of credit and a $30 million sublimit for swingline loans. At the company's election, and with the approval of the named borrowers on the revolving credit facility and the election of the lenders to fund such increase, the aggregate maximum principal amount available under the facility may be increased by an amount up to $300 million. Funds are available under the revolving credit facility for working capital, capital expenditures, and other lawful corporate purposes, including, but not limited to, acquisitions and common stock repurchases, subject in each case to compliance with certain financial covenants described below. Interest expense on outstanding loans under the revolving credit facility, other than swingline loans, bear interest at a variable rate generally based on LIBOR or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on LIBOR, in each case subject to an additional basis point spread as defined in the credit agreement. Swingline loans under the revolving credit facility bear interest at a rate determined by the swingline lender or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on LIBOR, in each case subject to an additional basis point spread as defined in the credit agreement. Interest is payable quarterly in arrears. The company's revolving credit facility contains standard covenants, including, without limitation, financial covenants, such as the maintenance of minimum interest coverage and maximum leverage ratios; and negative covenants, which among other things, limit disposition of assets, consolidations and mergers, restricted payments, liens, and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The company was in compliance with all covenants related to the credit agreement for the company's revolving credit facility as of October 31, 2018. As of October 31, 2017, the company was in compliance with all covenants related to the credit agreement for the revolving credit facility that was in place at that time. As of October 31, 2018, the company had $91.0 million outstanding under the revolving credit facility, $1.5 million outstanding under the sublimit for standby letters of credit, and $507.5 million of unutilized availability under the revolving credit facility. As of October 31, 2017, the company had no borrowings under the revolving credit facility that was in place at that time. In connection with the entry into the new revolving credit facility in June 2018, the company incurred approximately $1.9 million of debt issuance costs, which are being amortized over the life of the revolving credit facility under the straight-line method. The company classifies the debt issuance costs related to its revolving credit facility within other assets on the Consolidated Balance Sheets, regardless of whether the company has any outstanding borrowings on the revolving credit facility. 7.8% Debentures In June 1997, the company issued $175 million of debt securities consisting of $75 million of 7.125 percent coupon 10-year notes and $100 million of 7.8 percent coupon 30-year debentures. The $75 million of 7.125 percent coupon 10-year notes were repaid at maturity during fiscal 2007. In connection with the issuance of $175 million in long-term debt securities, the company paid $23.7 million to terminate three forward-starting interest rate swap agreements with notional amounts totaling $125 million. These swap agreements had been entered into to reduce exposure to interest rate risk prior to the issuance of the new long-term debt securities. As of the inception of one of the swap agreements, the company had received payments that were recorded as deferred income to be recognized as an adjustment to interest expense over the term of the new debt securities. As of the date the swaps were terminated, this deferred income totaled $18.7 million. The excess termination fees over the deferred income recorded was deferred and is being recognized as an adjustment to interest expense over the term of the debt securities issued. 6.625% Senior Notes On April 26, 2007, the company issued $125 million in aggregate principal amount of 6.625 percent senior notes due May 1, 2037. The senior notes were priced at 98.513 percent of par value, and the resulting discount of $1.9 million associated with the issuance of these senior notes is being amortized over the term of the notes using the effective interest rate method. The underwriting fee and direct debt issue costs totaling $1.5 million will be amortized over the life of the notes. Although the coupon rate of the senior notes is 6.625 percent, the effective interest rate is 6.741 percent after taking into account the issuance discount. Interest on the senior notes is payable semi-annually on May 1 and November 1 of each year. The senior notes are unsecured senior obligations of the company and rank equally with the company's other unsecured and unsubordinated indebtedness. The indentures under which the senior notes were issued contain customary covenants and event of default provisions. The company may redeem some or all of the senior notes at any time at the greater of the full principal amount of the senior notes being redeemed or the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the treasury rate plus 30 basis points, plus, in both cases, accrued and unpaid interest. In the event of the occurrence of both (i) a change of control of the company, and (ii) a downgrade of the notes below an investment grade rating by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Services within a specified period, the company would be required to make an offer to purchase the senior notes at a price equal to 101 percent of the principal amount of the senior notes plus accrued and unpaid interest to the date of repurchase. Term Loan In October 2014, the company obtained a $130 million term loan with various banks, which, at that time, was a part of a new credit agreement that included a new revolving credit facility. Under the credit agreement, interest on outstanding term loan borrowings was based on a LIBOR rate (or other rates quoted by the Administrative Agent, Bank of America, N.A.) plus a basis point spread defined in the credit agreement. As described in further detail in the section titled "Revolving Credit Facility" within this Note, in June 2018, the company replaced its term loan and prior revolving credit facility, which were scheduled to mature in October 2019, with an unsecured senior five-year revolving credit facility that expires in June 2023. 4% Unsecured Note On November 14, 2014, the company issued a note with the aggregate principal amount of $30 million to the former owner of the BOSS business, Northern Star Industries, Inc., which was recorded at fair value of $31.2 million. The 4 percent unsecured note was repaid in full during November of fiscal 2018.

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