8. Debt

Summary of Long-Term Debt

The following summarizes the Company's long-term debt:


	March 31,
	2011		2010
3.375% Convertible Notes, net of discount, due 2038	$	141,837	$	135,920
2011 Credit Facility due 2016		100,000		—
2008 Credit Facility due 2014		—		201,094
China Term Loan due 2017		6,112		—
Euro Term Loan due 2011		—		11,158
Other		43		41

		247,992		348,213
Less current portion		43		26,045

Total long-term debt	$	247,949	$	322,168

2011 Senior Secured Revolving Credit Facility

On March 29, 2011, the Company entered into a new $350,000 senior secured revolving credit facility ("2011 Credit Facility"). At the time of closing, the Company borrowed $100,000 and used $88,400 of its available cash to repay and extinguish the existing Term A Loan and replace the existing undrawn $125,000 revolving credit facility, which comprised the 2008 Credit Facility. The 2011 Credit Facility matures on March 31, 2016. This facility includes an early termination provision under which the Company is required to meet a liquidity test in February 2015 related to its capacity to meet certain potential obligations related to the Convertible Notes in June 2015. Borrowings under the 2011 Credit Facility bear interest at a floating rate based, at the Company's option, upon (i) London Interbank Offered Rate ("LIBOR") plus an applicable percentage (currently 1.50%), (ii) the greater of the Federal Funds rate plus 0.50% or the prime rate, or one-month LIBOR plus 1.0%, plus an applicable percentage (currently 0.50%). There are no prepayment penalties on loans under the 2011 Credit Facility. The interest rate at the end of March 31, 2011 was 3.75%.

Obligations under the 2011 Credit Facility are secured by substantially all of the Company's existing and future acquired assets, including substantially all of the capital stock of the Company's United States subsidiaries that are guarantors under the new credit facility, and 65% of the capital stock of certain of the Company's foreign subsidiaries that are owned by the Company's United States companies.

China Term Loan

During the fourth quarter of fiscal 2011, the Company completed the financing of a 75,000 Chinese Renminbi (RMB) ($11,500) credit facility ("China Term Loan"). This is a six year term loan to provide a portion of the capital requirements for the Company's operations in China. At March 31, 2011, the Company had drawn RMB 40,000 ($6,112). This term loan currently bears interest at a rate of 7.26% per annum, adjusted annually, based on the official Peoples Bank of China Bank Rate and is payable in quarterly installments of RMB 2,000 ($305) commencing in April 2012.

Senior Unsecured 3.375% Convertible Notes

On May 28, 2008, the Company completed a registered offering of $172,500 aggregate principal amount of senior unsecured 3.375% Convertible Notes Due 2038 ("Convertible Notes") (see prospectus and supplemental indenture dated May 28, 2008). The Company received net proceeds of $168,200 after the deduction of commissions and offering expenses. The Company used all of the net proceeds to repay a portion of its then existing 2004 senior secured credit facility.

The Convertible Notes are general senior unsecured obligations and rank equally with the Company's existing and future senior unsecured obligations and are junior to any of the Company's future secured obligations to the extent of the value of the collateral securing such obligations. The Convertible Notes are not guaranteed, and are structurally subordinate in right of payment to, all of the (i) existing and future indebtedness and other liabilities of the Company's subsidiaries and (ii) preferred stock of the Company's subsidiaries to the extent of their respective liquidation preferences.

The Convertible Notes require the semi-annual payment of interest in arrears on June 1 and December 1 of each year beginning December 1, 2008, at 3.375% per annum on the principal amount outstanding. The Convertible Notes will accrete principal beginning on June 1, 2015 and will bear contingent interest, if any, beginning with the six-month interest period commencing on June 1, 2015 under certain circumstances. The Convertible Notes will mature on June 1, 2038. Prior to maturity the holders may convert their Convertible Notes into shares of the Company's common stock at any time after March 1, 2015 or prior to that date under certain circumstances. When issued, the initial conversion rate was 24.6305 shares per $1,000 principal amount of Convertible Notes, which was equivalent to an initial conversion price of $40.60 per share.

At any time after June 6, 2015, the Company may at its option redeem the Convertible Notes, in whole or in part, for cash, at a redemption price equal to 100% of the accreted principal amount of Convertible Notes to be redeemed, plus any accrued and unpaid interest. A holder of Convertible Notes may require the Company to repurchase some or all of the holder's Convertible Notes for cash upon the occurrence of a fundamental change as defined in the indenture and on each of June 1, 2015, 2018, 2023, 2028 and 2033 at a price equal to 100% of the accreted principal amount of the Convertible Notes being repurchased, plus accrued and unpaid interest, if any, in each case. It is the Company's current intent to settle the principal amount of any conversions in cash, and any additional conversion consideration in cash, shares of EnerSys common stock or a combination of cash and shares. The Convertible Notes will mature on June 1, 2038, unless earlier converted, redeemed or repurchased.

If applicable, the Company will pay a make-whole premium on Convertible Notes converted in connection with certain fundamental changes that occur prior to June 6, 2015. The amount of the make-whole premium, if any, will be based on the Company's stock price and the effective date of the fundamental change. The indenture contains a detailed description of how the make-whole premium will be determined and a table showing the make-whole premium that would apply at various stock prices. No make-whole premium would be paid if the price of the Common Stock on the effective date of the fundamental change is less than $29.00. Any make-whole premium will be payable in shares of Common Stock (or the consideration into which the Company's Common Stock has been exchanged in the fundamental change) on the conversion date for the Convertible Notes converted in connection with the fundamental change.

The Convertible Notes were issued in an offering registered under the Securities Act of 1933, as amended (Securities Act).

In accordance with FASB guidance on the accounting for convertible debt instruments that may be settled in cash upon conversion (including partial settlement), the liability and equity components are separated in a manner that will reflect the entity's non-convertible debt borrowing rate when interest expense is recognized in subsequent periods.

The following represents the principal amount of the liability component, the unamortized discount, and the net carrying amount of our Convertible Notes as of March 31, 2011 and March 31, 2010, respectively:


	March 31, 2011			March 31, 2010
Principal	$	172,500		$	172,500
Unamortized discount		(30,663	)		(36,580	)

Net carrying amount	$	141,837		$	135,920

As of March 31, 2011, the remaining discount will be amortized over a period of 50 months. The conversion price of the $172,500 in aggregate principal amount of the Convertible Notes is $40.60 per share and the number of shares on which the aggregate consideration to be delivered upon conversion is 4,248,761.

The effective interest rate on the liability component of the Convertible Notes was 8.50%. The amount of interest cost recognized for the amortization of the discount on the liability component of the Convertible Notes was $5,917 and $5,439, respectively, for the fiscal years ended March 31, 2011 and 2010.

2008 Senior Secured Credit Facility

In June 2008, the Company completed the refinancing of approximately $192,000 of the outstanding combined balance of the senior secured Term Loan B and its then existing revolving credit facility (2004 Credit Facility) with a $350,000 senior secured credit facility comprising a $225,000 Term A Loan and a $125,000 revolving credit facility (2008 Credit Facility).

The $225,000 senior secured Term A Loan, a component of the 2008 Credit Facility, was subject to a quarterly principal amortization of 1.25% in Year 1, 1.88% in Years 2-3, 2.50% in Year 4, 3.13% in Year 5 and 14.38% in Year 6 and was due to mature on June 27, 2014. The $125,000 revolving credit facility was due to mature on June 27, 2013. Borrowings under the credit agreements bore interest at a floating rate based, at the Company's option, upon (i) LIBOR plus an applicable percentage (1.25% at March 28, 2011), or (ii) the greater of the federal funds rate plus 0.50% or the prime rate, plus an applicable percentage (0.25% at March 28, 2011). There were no prepayment penalties on loans under the 2008 Credit Facility.

Euro Term Loan

On June 15, 2005, the Company entered in a Euro 25,000 Credit Facility Agreement among EnerSys Holdings (Luxembourg), S.a.r.l., San Paolo IMI S.p.A., as Facility Agent and lender, and Banca Intesa S.p.A., as lender (the "Euro Term Loan"). The proceeds from the Euro Term Loan were used to reduce the outstanding balance of the 2008 Credit Facility that was utilized as bridge financing for the June 1, 2005 acquisition of the motive power battery business of FIAMM S.p.A. The original maturity date of the Euro Term Loan was June 30, 2011, but the loan was repaid in full on September 30, 2010.

As of March 31, 2011 and 2010, the Company had available and undrawn, under all its lines of credit, $356,447 and $247,400, respectively. Included in the March 31, 2011 and 2010 amounts are $95,049 and $116,788, respectively, of uncommitted lines of credit.

The Company paid $16,101, $16,456 and $21,026, net of interest received, for interest during the fiscal years ended March 31, 2011, 2010 and 2009, respectively.

Aggregate maturities of long-term debt (including $30,663 of Convertible Notes discount) are as follows at March 31, 2011:


2012	$	43
2013		1,222
2014		1,222
2015		1,222
2016		273,722
Thereafter		1,224

	$	278,655

The Company's financing agreements contain various covenants, which, absent prepayment in full of the indebtedness and other obligations, or the receipt of waivers, would limit the Company's ability to conduct certain specified business transactions including incurring debt, mergers, consolidations or similar transactions, buying or selling assets out of the ordinary course of business, engaging in sale and leaseback transactions, paying dividends and certain other actions. The Company is in compliance with all such covenants.

As of March 31, 2011 and 2010, the Company had $1,150 of standby letters of credit outstanding that reduced the borrowings available under the 2008 and 2011 Credit Facilities. As of March 31, 2011 and 2010, the Company had no bank guarantees.

Deferred Financing Fees

In fiscal 2011, in connection with the refinancing under the 2011 Credit Facility, the Company wrote-off $2,308 of unamortized deferred financing fees associated with the 2008 Credit Facility, and incurred $3,500 in new deferred financing fees.

In fiscal 2009, in connection with the issuance of the Convertible Notes in May 2008 and the refinancing under the 2008 Credit Facility in June 2008, the Company wrote-off $3,963 of unamortized deferred financing fees associated with the 2004 Credit Facility, and incurred $10,950 in new deferred financing fees.

Deferred financing fees, net of accumulated amortization totaled $5,912 and $6,581 as of March 31, 2011 and 2010, respectively. Amortization expense included in interest expense was $1,861, $1,724, and $1,733 for the fiscal years ended March 31, 2011, 2010 and 2009, respectively.