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Debt | 9 Months Ended
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Sep. 30, 2012
Debt |
Debt | 6. DEBT Credit Facility On March 13, 2012, USEC amended and restated its existing $310.0 million credit facility, scheduled to mature on May 31, 2012, to a $235.0 million credit facility that matures on May 31, 2013. The amended and restated credit facility includes a revolving credit facility of $150.0 million (including up to $75.0 million in letters of credit) and a term loan of $85.0 million. The interest rate on the term loan as of September 30, 2012 was 10.5%. Under the amended and restated credit facility, commencing December 3, 2012, the aggregate revolving commitments and term loan principal will be reduced by $5.0 million per month through the expiration of the credit facility. Utilization of the current credit facility at September 30, 2012 and the former credit facility at December 31, 2011 follows:
|  | September 30, |  |  | December 31, |
|  | 2012 |  |  | 2011 |
|  | (millions) |
Borrowings under the revolving credit facility |  | $ | - |  |  | $ | - |
Term loan due May 31, 2013 |  |  | 85.0 |  |  |  | - |
Term loan due May 31, 2012 |  |  | - |  |  |  | 85.0 |
Letters of credit |  |  | 14.9 |  |  |  | 19.6 |
Available credit |  |  | 90.1 |  |  |  | 205.4 |
The revolving credit facility contains various reserve provisions that reduce available borrowings under the facility periodically including a permanent availability block under the new amended and restated credit facility equal to $45.0 million. Borrowings under the credit facility are subject to limitations based on established percentages of eligible accounts receivable and USEC-owned inventory pledged as collateral to the lenders. Available credit reflects the levels of qualifying assets at the end of the previous month less any borrowings or letters of credit and reduced by the availability block. As with the former facility, the amended and restated credit facility is secured by assets of USEC Inc. and its subsidiaries, excluding equity in, and assets of, subsidiaries created to carry out future commercial American Centrifuge activities. The amended and restated credit facility includes various operating and financial covenants that restrict USEC's ability and the ability of its subsidiaries, to, among other things, incur or prepay other indebtedness, grant liens, sell assets, make investments and acquisitions, consummate certain mergers and other fundamental changes, make certain capital expenditures and declare or pay dividends or other distributions. The credit facility, as further amended on June 1, 2012, imposes limitations and restrictions on our ability to invest in the American Centrifuge project. Under the amended credit facility, USEC can invest its 20% share of the costs under the RD&D program (up to $75 million) as long as the amount of expenditures reimbursable to USEC under the RD&D program that have not yet been reimbursed does not exceed $50 million. Aggregate American Centrifuge project expenditures from and after June 1, 2012 may not exceed $375 million and the aggregate amount of American Centrifuge project expenditures from and after June 1, 2012 for which USEC is not entitled to reimbursement under the RD&D program may not exceed $75 million (except for spending needed to carry out a project demobilization or to maintain compliance with legal and regulatory requirements under certain circumstances). The credit facility includes a requirement that, with limited allowances, USEC maintain a ratio of 1.75:1.0 of certain eligible collateral (less reserves) to the amount of the credit facility (the "collateral coverage ratio"). On September 17, 2012, the credit facility was amended at USEC's request to modify the definition of the collateral coverage ratio. Under the amended facility, at USEC's election, for any given monthly compliance period under the credit facility, up to $25 million of USEC's cash that is held in an account with the administrative agent may be included in the calculation of eligible collateral for purposes of meeting the collateral coverage ratio. Cash that is included at USEC's election is then restricted and may not be withdrawn by USEC until the next monthly compliance certificate is submitted unless certain conditions for an earlier reduction are met. The amendment provides additional flexibility to USEC to protect the collateral coverage ratio from factors outside of USEC's control that can affect the value of USEC's eligible collateral from time to time, such as the timing of sales, the market value of inventory and the timing of shipments of LEU from Russia. Convertible Senior Notes due 2014 Convertible senior notes amounted to $530.0 million as of September 30, 2012 and December 31, 2011. The convertible senior notes are due October 1, 2014. Interest of 3.0% is payable semi-annually in arrears on April 1 and October 1 of each year. The notes were not eligible for conversion to common stock as of September 30, 2012 or December 31, 2011. Deferred Financing Costs Financing costs are generally deferred and amortized over the life of the instrument. A summary of deferred financing costs for the nine months ended September 30, 2012 follows (in millions):
|  | December 31, 2011 |  |  | Additions |  |  | Reductions |  |  | September 30, 2012 |
Other current assets: |  |  |  |  |  |  |  |  |  |  |  |
Bank credit facilities |  | $ | 2.4 |  |  | $ | 9.2 |  |  | $ | (6.7 | ) |  | $ | 4.9 |
Deferred financing costs (long-term): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible notes |  | $ | 5.5 |  |  | $ | - |  |  | $ | (1.4 | ) |  | $ | 4.1 |
ACP project |  |  | 6.7 |  |  |  | - |  |  |  | (0.1 | ) |  |  | 6.6 |
Deferred financing costs |  | $ | 12.2 |  |  | $ | - |  |  | $ | (1.5 | ) |  | $ | 10.7 |

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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 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 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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