NOTE 5 — DEBT

Short-term borrowings at December 31 consisted of the following ($ in millions):


	2012		2011
Non-U.S. lines of credit	$	0.3	$	9.0

Total short-term borrowings	$	0.3	$	9.0

Long-term borrowings at December 31 consisted of the following ($ in millions):


	2012			2011
Revolving Credit Facility		$ -		$	180.0
ABL Facility		6.7			-
Term Loan		149.1			-
12.98% private placement note due 2012		-			27.3
Private placement note, floating rate (8.85% at December 31, 2011)		-			6.2
Capital lease obligations		1.7			0.5

		157.5			214.0
Unamortized balance of terminated fair value interest rate swaps		-			0.1

		157.5			214.1
Less current maturities, excluding financial services activities		(4.2	)		-
Less current capital lease obligations		(0.5	)		(0.1	)
Less financial services activities — borrowings (included in discontinued operations)		-			(0.9	)

Total long-term borrowings and capital lease obligations, net	$	152.8		$	213.1

The carrying value of short-term debt approximates fair value due to its short maturity (Level 2 input). The fair value of long-term debt is based on interest rates that we believe are currently available to us for issuance of debt with similar terms and remaining maturities (Level 2 input).

The following table summarizes the carrying amounts and fair values of the Company’s financial instruments at December 31 ($ in millions):


	2012				2011
	Notional Amount		Fair Value		Notional Amount		Fair Value
Short-term debt	$	0.3	$	0.3	$	9.0	$	9.0
Long-term debt (1)		157.5		208.2		214.1		212.4

(1)

Long-term debt includes current portions of long-term debt and current portions of capital lease obligations of $4.7 million and $0.1 million as of December 31, 2012 and 2011, respectively, and $0.9 million of financial service borrowings at December 31, 2011, which is included in discontinued operations.

On February 22, 2012, the Company entered into a Credit Agreement, by and among the Company, as borrower and General Electric Capital Corporation, as a co-collateral agent, and Wells Fargo Capital Finance, LLC, as administrative agent and co-collateral agent, providing the Company with a $100 million secured credit facility (the “ABL Facility”).

The ABL Facility is a five-year asset-based revolving credit facility pursuant to which up to $100 million initially will be available, with the right, subject to certain conditions, to increase the availability under the facility by up to an additional $25 million. The ABL Facility provides for loans and letters of credit in an amount up to the aggregate availability under the facility subject to meeting certain borrowing base conditions, with a sub-limit of $50 million for letters of credits. Borrowings under the ABL Facility bear interest, at the Company’s option, at a base rate or a LIBOR rate, plus, in each case, an applicable margin. The applicable margin ranges from 1.00% to 2.75% for base rate borrowings and 1.75% to 3.50% for LIBOR borrowings. The Company must also pay a commitment fee to the facility lenders equal to 0.50% per annum on the unused portion of the ABL Facility along with other standard fees. Letter of credit fees are payable on outstanding letters of credit in an amount equal to the applicable LIBOR margin plus other customary fees.

The Company is allowed to prepay in whole or in part advances under the ABL Facility without penalty or premium other than customary “breakage” costs with respect to LIBOR loans.

The ABL Facility requires that the Company, on a consolidated basis, maintain a minimum monthly fixed charge coverage ratio, along with other customary restrictive covenants, certain of which are subject to materiality thresholds.

On February 22, 2012, the Company also entered into a Financing Agreement by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders party thereto (the “Term Lenders”) and TPG Specialty Lending, Inc., as administrative agent, collateral agent and sole lead arranger, pursuant to which the Term Lenders agreed to provide the Company with a $215 million term loan (the “Term Loan”).

The Term Loan is a five-year secured term loan maturing on February 22, 2017. Installment payments under the Term Loan did not commence until March 2013. The Term Loan allows for mandatory prepayments in certain specified situations. Except in these certain specified situations, the Term Loan is not repayable in the first 12 months of the term and thereafter is subject to the following prepayment premium: (i) 2.75% in months 13-24, (ii) 2.00% in months 25-36 and (iii) nothing thereafter. These provisions are subject to change upon the occurrence of certain specified events.

The Term Loan bears interest, at the Company’s option, at a base rate or adjusted LIBOR rate, plus, in each case, an applicable margin. The applicable margin ranges from 9.00% to 10.00% for base rate borrowings and 10.00% to 11.00% for LIBOR borrowings. The Company is required to pay certain customary fees in connection with the Term Loan.

On September 4, 2012, the Company prepaid $65.0 million of its outstanding principal balance of its Term Loan debt at par with no prepayment penalty and related accrued interest of $0.1 million with net proceeds from the sale of the FSTech Group. This prepayment was executed in accordance with the terms of the Financing Agreement. The Company also prepaid $10.0 million of debt drawn under the ABL Facility on the same date with net proceeds from the sale of the FSTech Group.

The Company was in compliance with all its debt covenants as of December 31, 2012.

As of December 31, 2012, the available borrowing base under the ABL Facility was $61.6 million. As of December 31, 2012, there was $6.7 million in cash drawn and $29.2 million of undrawn letters of credit under the ABL Facility, reducing net availability for borrowings to $25.7 million.

As of December 31, 2012, $0.3 million was drawn against the Company’s non-U.S. lines of credit which provide for borrowings up to $14.5 million.

Aggregate maturities of total borrowings amount to approximately $5.0 million in 2013, $7.4 million in 2014, $7.9 million in 2015, $9.3 million in 2016, and $128.2 million in 2017 and thereafter. Since the Company has refinanced a portion of its short-term debt subsequent to the balance sheet date, the Company has reclassified $3.3 million of its short-term debt to long-term debt. See Note 18 for further information. Included in current maturities are $0.3 million of other non-U.S. lines of credit, $4.2 million of term loan debt and $0.5 million of capital lease obligations. The fair values of borrowings aggregated $208.5 million and $221.4 million at December 31, 2012 and 2011, respectively.

The Company paid interest of $20.6 million in 2012, $16.1 million in 2011 and $9.7 million in 2010. The weighted average interest rate on short-term borrowings was 5.15% at December 31, 2012.