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Debt, Capital Lease Obligations and Other Financing | 12 Months Ended
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Sep. 29, 2018
Debt and Capital Lease Obligations [Abstract] |
Debt, Capital Lease Obligations and Other Financing | Debt, Capital Lease Obligations and Other Financing Debt and capital lease obligations as of September 29, 2018 and September 30, 2017, consisted of the following (in thousands):
|  | 2018 |  | 2017
4.05% Senior Notes, due June 15, 2025 |  | $ | 100,000 |  |  | $ | — |
4.22% Senior Notes, due June 15, 2028 |  | 50,000 |  |  | — |
5.20% Senior Notes, due June 15, 2018 |  | — |  |  | 175,000 |
Borrowings under the credit facility |  | — |  |  | 108,000 |
Capital lease and other financing obligations |  | 39,857 |  |  | 30,901 |
Unamortized deferred financing fees |  | (1,240 | ) |  | (794 | )
Total obligations |  | 188,617 |  |  | 313,107 |
Less: current portion |  | (5,532 | ) |  | (286,934 | )
Long-term debt and capital lease obligations, net of current portion |  | $ | 183,085 |  |  | $ | 26,173 |
On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ratios such as a total leverage ratio and a minimum interest coverage ratio. Such covenants are generally similar to those in the Note Purchase Agreement related to the 2011 Notes (as defined below). The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a make-whole amount; interest on the 2018 Notes is payable semiannually. At September 29, 2018, the Company was in compliance with the covenants under the 2018 NPA. In connection with the issuance of the 2018 Notes, on June 15, 2018, the Company repaid, on maturity $175.0 million in principal amount of its 5.20% Senior Notes (the "2011 Notes"). The Company also has a senior unsecured revolving credit facility (the "Credit Facility"), with a $300.0 million maximum commitment that expires on July 5, 2021. The Credit Facility may be further increased to $500.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During fiscal 2018, the highest daily borrowing was $208.0 million; the average daily borrowings were $59.8 million. The Company borrowed $683.5 million and repaid $791.5 million of revolving borrowings under the Credit Facility during fiscal 2018. The Company was in compliance with all financial covenants relating to the Credit Agreement, which are generally consistent with those in the Note Purchase Agreements discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.175% as of September 29, 2018. The aggregate scheduled maturities of the Company’s debt obligations as of September 29, 2018, are as follows (in thousands):
2019 | $ | — |
2020 | — |
2021 | — |
2022 | — |
2023 | — |
Thereafter | 150,000 |
Total | $ | 150,000 |
The aggregate scheduled maturities of the Company’s capital leases and other financing obligations as of September 29, 2018, are as follows (in thousands):
2019 | $ | 5,532 |
2020 | 2,963 |
2021 | 1,515 |
2022 | 1,101 |
2023 | 696 |
Thereafter | 28,050 |
Total | $ | 39,857 |
The Company's weighted average interest rate on capital lease obligations was 4.87% and 4.51% as of September 29, 2018 and September 30, 2017, respectively. The Neenah Design Center capital lease commenced, and resulted in a non-cash transaction of approximately $15.7 million, during fiscal 2017. The "Thereafter" line of the scheduled maturities of capital lease obligations table above includes an $8.8 million non-cash financing obligation related to a failed sale-leaseback of a building shell in Guadalajara, Mexico that was capitalized in fiscal 2014. This obligation will be increased by interest expense and land rent expense, and reduced by contractual payments during the 20-year lease term. As of September 30, 2017, the balance of the related financing obligation totaled $8.6 million. At the end of the 20-year lease term, the net book value of the assets will approximate the balance of the financing obligation. If the Company does not exercise both renewal options or exercises the first but not the second, it would record a loss related to the disposal of the underlying assets in operating results of $4.1 million in fiscal 2024 or $0.8 million in fiscal 2029. Construction on a second manufacturing facility in Guadalajara, Mexico began in fiscal 2018, resulting in an additional $7.2 million of non-cash financing obligations that were capitalized as of September 29, 2018. This obligation will be increased as construction costs are incurred and also by interest expense and land rent expense, and reduced by contractual payments during the 25-year lease term. This amount is included in the "Thereafter" line of the scheduled maturities of capital lease obligations table above, as well as in long-term debt and capital lease obligations, net of current portion, on the accompanying Consolidated Balance Sheets as of September 29, 2018. The lease contains a 15-year base lease agreement with two 5-year renewal options. The future minimum payments under the remainder of the two facilities in Guadalajara, leased under 10-year and 15-year base lease agreements, as well as the two 5-year renewal options for each lease are as follows (in thousands):
2019 | $ | 3,328 |
2020 | 4,301 |
2021 | 4,409 |
2022 | 4,520 |
2023 | 4,632 |
Thereafter (2024 - 2044, through both five-year renewal options for each building) | 100,159 |
Total | $ | 121,349 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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