XML 43 R17.htm IDEA: XBRL DOCUMENT
v3.19.1

Long-Term Debt | 12 Months Ended
--- | ---
Jan. 27, 2019
Debt Instruments [Abstract] |
Credit Facilities | Long-term debt and the current period interest rates were as follows:
| Balance as of
(in thousands) | January 27, 2019 |  | January 28, 2018
Term loans | $ | 115,312 |  |  | $ | 131,250 |
Revolving loans | 97,000 |  |  | 97,000 |
Total debt | 212,312 |  |  | 228,250 |
Current portion | (18,269 | ) |  | (15,410 | )
Total long-term debt | 194,043 |  |  | 212,840 |
Debt issuance costs | (1,198 | ) |  | (1,726 | )
Total long-term debt, net of debt issuance costs | $ | 192,845 |  |  | $ | 211,114 |
Weighted-average interest rate | 4.14 | % |  | 3.19 | %
On November 15, 2016 (the "Closing Date"), the Company, with certain of its domestic subsidiaries as guarantors (the "Guarantors"), entered into an amended and restated credit agreement ("Credit Agreement") with the lenders party thereto (the "Lenders") and HSBC Bank USA, National Association, as administrative agent, swing line lender and letter of credit issuer (the "Administrative Agent"). Pursuant to the Credit Agreement, the Lenders provided the Company with senior secured first lien credit facilities in an aggregate principal amount of $400.0 million (the "Credit Facility"), consisting of term loans in an aggregate initial principal amount of $150.0 million ("Term Loans") and revolving commitments in an aggregate principal amount of $250.0 million ("Revolving Loans"). Up to $40.0 million of the Revolving Loans may be used to obtain letters of credit, up to $25.0 million of the Revolving Loans may be used to obtain swing line loans, and up to $40.0 million of the Revolving Loans may be used to obtain revolving loans and letters of credit in certain currencies other than U.S. Dollars. The proceeds of the Revolving Loans may be used by the Company for capital expenditures, permitted acquisitions, permitted dividends, working capital, and general corporate purposes. The Credit Facility is scheduled to mature on November 12, 2021. All of the proceeds of the Credit Facility were used to repay in full all of the obligations outstanding under the Company’s then existing senior secured first lien credit facility and to pay transaction costs in connection with such refinancing. The Credit Agreement provides that, subject to certain conditions, the Company may request the establishment of one or more additional term loan facilities and/or increases to the Revolving Loans in an aggregate principal amount not to exceed the sum of (a) $150.0 million and (b) the aggregate principal amount of all voluntary prepayments of term loans made prior to the date of incurrence of such additional term loan facilities and/or increases to the Revolving Loans. The Lenders will have an opportunity to, but are not required to participate in the additional term loan facilities and/or increases to the Revolving Loans. If the Lenders do not agree to provide such incremental facilities, the Company may request such additional and/or increased facilities from additional lenders. Interest on loans made under the Credit Agreement in U.S. Dollars accrues, at the Company's option, at a rate per annum equal to (1) the Base Rate (as defined below) plus a margin ranging from 0.25% to 1.25% depending upon the Company’s consolidated leverage ratio or (2) LIBOR (determined with respect to deposits in U.S. Dollars) for an interest period to be selected by the Company plus a margin ranging from 1.25% to 2.25% depending upon the Company's consolidated leverage ratio (such margin, the "Applicable Margin"). The initial interest margin will be 2.00% for Base Rate loans and 1.00% for LIBOR rate loans, applicable until 2 business days following delivery of a compliance certificate by Semtech to the Administrative Agent with respect to the first fiscal period ending after the Closing Date. The "Base Rate" is equal to a fluctuating rate equal to the highest of (a) the prime rate of the Administrative Agent, (b) ½ of 1% above the federal funds effective rate published by the Federal Reserve Bank of New York and (c) one-month LIBOR (determined with respect to deposits in U.S. Dollars) plus 1.00%. Interest on loans made under the Credit Agreement in alternative currencies accrues at a rate per annum equal to LIBOR (determined with respect to deposits in the applicable alternative currency) (other than loans made in Canadian Dollars, for which a special reference rate for Canadian Dollars applies) for an interest period to be selected by the Company plus the Applicable Margin. Commitment fees on the unused portion of the Revolving Loans accrue at a rate per annum ranging from 0.20% to 0.45% depending upon the Company's consolidated leverage ratio, provided the initial commitment fee shall be 0.40% per annum, applicable until two business days following delivery of a compliance certificate by the Company to the Administrative Agent with respect to the first fiscal period ending after the Closing Date. With respect to letters of credit, the Company will pay the Administrative Agent, for the account of the lenders under the revolving credit facility, letter of credit participation fees at a rate per annum equal to the applicable margin then in effect with respect to LIBOR-based loans under the Revolving Loans on the face amount of all outstanding letters of credit. The Company also will pay HSBC Bank USA, National Association, as the issuing bank, a fronting fee for each letter of credit issued under the Credit Facility at a rate equal to 0.125% per annum based on the maximum amount available to be drawn under each such letter of credit, as well as its customary documentation fees. All obligations of the Company under the Credit Facility are unconditionally guaranteed by each of the Guarantors, which currently consist of all of the direct and indirect domestic subsidiaries of Semtech Corporation. Semtech Corporation and the Guarantors have also pledged substantially all of their assets to secure their obligations under the Credit Facility, including the Company's owned real property located in Camarillo, California. The outstanding principal balance of the Term Loans will be subject to repayment in quarterly installments. No amortization is required with respect to the Revolving Loans. The Company may voluntarily prepay borrowings under the Credit Facility at any time and from time to time, without premium or penalty, other than customary "breakage costs" and fees for LIBOR-based loans. The Term Loans must be mandatorily prepaid using the proceeds of certain dispositions of assets and receipt of insurance proceeds, subject to agreed-upon thresholds and exceptions and customary reinvestment rights. The Credit Agreement contains customary covenants, including limitations on the Company’s ability to, among other things, incur indebtedness, create liens on assets, engage in certain fundamental corporate changes, make investments, sell or otherwise dispose of assets, repurchase stock, pay dividends or make similar distributions, engage in certain transactions with affiliates and make capital expenditures. In addition, the Company must comply with the following financial covenants, tested at the end of each fiscal quarter on a trailing four-quarter basis: (i) a minimum consolidated interest coverage ratio of 3.00 to 1.00 and (ii) a maximum consolidated leverage ratio of 3.00 to 1.00 provided that, such maximum consolidated leverage ratio may be increased to 3.25 to 1.00 or 3.50 to 1.00, as applicable, for the four consecutive fiscal quarters ending on or after the date of consummation of a permitted acquisition which constitutes a "Material Acquisition" under the Credit Agreement, subject to the satisfaction of certain conditions. As of January 27, 2019, the Company was in compliance with its financial covenants. The Credit Agreement also contains customary provisions pertaining to events of default. If any event of default occurs, the principal, interest, and any other monetary obligations on all the then outstanding amounts can become due and payable immediately by action of the Administrative Agent acting upon the instructions of or with the consent of the Lenders representing more than 50% of the Revolving Loans and outstanding Term Loans or automatically upon the occurrence of certain bankruptcy events related to the Company. Scheduled maturities of current and long-term Term Loans are as follows:
(in thousands) |
Fiscal Year Ending: |
2020 | $ | 18,750 |
2021 | 19,687 |
2022 | 76,875 |
Total debt | $ | 115,312 |
There are no scheduled principal payments for the Revolving Loans which had an outstanding balance of $97.0 million at January 27, 2019, and is due on or before November 12, 2021. As of January 27, 2019, the Company had $153.0 million of unused borrowing capacity under the Revolving Loans. As of January 27, 2019, there we re no a mounts outstanding under the letters of credit, swing line loans and alternative currency sub-facilities.

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DebtInstrumentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration