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DEBT | 6 Months Ended
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Apr. 03, 2021
Debt Disclosure [Abstract] |
DEBT | DEBT The components of debt are as follows:
| April 3, 2021 |  | March 28, 2020 |  | September 30, 2020
Credit Facilities: |  |  |  |  |
Revolving loans | $ | 460.2 |  |  | $ | 691.9 |  |  | $ | 64.0 |
Term loans | 690.0 |  |  | 740.0 |  |  | 710.0 |
Senior Notes – 4.000% | 500.0 |  |  | — |  |  | — |
Senior Notes – 4.500% | 450.0 |  |  | 450.0 |  |  | 450.0 |
Senior Notes – 5.250% | 250.0 |  |  | 250.0 |  |  | 250.0 |
Receivables facility | 160.0 |  |  | 160.0 |  |  | 20.0 |
Finance lease obligations | 33.5 |  |  | 35.9 |  |  | 36.1 |
Other | 7.6 |  |  | 8.7 |  |  | 1.1 |
Total debt | 2,551.3 |  |  | 2,336.5 |  |  | 1,531.2 |
Less current portions | 212.8 |  |  | 212.2 |  |  | 66.4 |
Less unamortized debt issuance costs | 16.0 |  |  | 10.5 |  |  | 9.7 |
Long-term debt | $ | 2,322.5 |  |  | $ | 2,113.8 |  |  | $ | 1,455.1 |
Credit Facilities On July 5, 2018, the Company entered into a fifth amended and restated credit agreement (the “Fifth A&R Credit Agreement”), providing the Company and certain of its subsidiaries with five-year senior secured loan facilities in the aggregate principal amount of $2,300.0, comprised of a revolving credit facility of $1,500.0 and a term loan in the original principal amount of $800.0 (the “Fifth A&R Credit Facilities”). At April 3, 2021, the Company had letters of credit outstanding in the aggregate principal amount of $19.8 and had $1,020.0 of borrowing availability under the Fifth A&R Credit Agreement. The weighted average interest rates on average borrowings under the Fifth A&R Credit Agreement were 1.9% and 3.7% for the six months ended April 3, 2021 and March 28, 2020, respectively. The Fifth A&R Credit Agreement contains, among other obligations, an affirmative covenant regarding the Company’s leverage ratio on the last day of each quarter calculated as average total indebtedness, divided by the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted pursuant to the terms of the Fifth A&R Credit Agreement (“Adjusted EBITDA”). The maximum leverage ratio is 4.50. The Company’s leverage ratio was 2.11 at April 3, 2021. The Fifth A&R Credit Agreement also contains an affirmative covenant regarding the Company’s interest coverage ratio determined as of the end of each of its fiscal quarters. The interest coverage ratio is calculated as Adjusted EBITDA divided by interest expense, as described in the Fifth A&R Credit Agreement, and excludes costs related to refinancings. The minimum interest coverage ratio was 3.00 for the twelve months ended April 3, 2021. The Company’s interest coverage ratio was 13.58 for the twelve months ended April 3, 2021. The Fifth A&R Credit Agreement allows the Company to make unlimited restricted payments (as defined in the Fifth A&R Credit Agreement), including dividend payments and repurchases of the common shares of Scotts Miracle-Gro (“Common Shares”), as long as the leverage ratio resulting from the making of such restricted payments is 4.00 or less. Otherwise, the Company may make further restricted payments in an aggregate amount for each fiscal year not to exceed $225.0. Senior Notes On December 15, 2016, Scotts Miracle-Gro issued $250.0 aggregate principal amount of 5.250% Senior Notes due 2026 (the “5.250% Senior Notes”). The 5.250% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with the Company’s existing and future unsecured senior debt. The 5.250% Senior Notes have interest payment dates of June 15 and December 15 of each year. Substantially all of Scotts Miracle-Gro’s directly and indirectly owned domestic subsidiaries serve as guarantors of the 5.250% Senior Notes. On October 22, 2019, Scotts Miracle-Gro issued $450.0 aggregate principal amount of 4.500% Senior Notes due 2029 (the “4.500% Senior Notes”). The net proceeds of the offering were used to redeem all of the Company’s outstanding 6.000% Senior Notes due 2023 (the “6.000% Senior Notes”) and for general corporate purposes. The 4.500% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with the Company’s existing and future unsecured senior debt. The 4.500% Senior Notes have interest payment dates of April 15 and October 15 of each year. All of Scotts Miracle-Gro’s domestic subsidiaries that serve as guarantors of the 5.250% Senior Notes also serve as guarantors of the 4.500% Senior Notes. On October 23, 2019, Scotts Miracle-Gro redeemed all of its outstanding 6.000% Senior Notes for a redemption price of $412.5, comprised of $0.5 of accrued and unpaid interest, $12.0 of redemption premium, and $400.0 for outstanding principal amount. The $12.0 redemption premium was recognized in the “Costs related to refinancing” line on the Condensed Consolidated Statements of Operations during the first quarter of fiscal 2020. Additionally, the Company had $3.1 in unamortized bond issuance costs associated with the 6.000% Senior Notes, which were written-off during the first quarter of fiscal 2020 and were recognized in the “Costs related to refinancing” line in the Condensed Consolidated Statements of Operations. On March 17, 2021, Scotts Miracle-Gro issued $500.0 aggregate principal amount of 4.000% Senior Notes due 2031 (the “4.000% Senior Notes”). The net proceeds of the offering were used to reduce borrowings under the Fifth A&R Credit Facilities. The 4.000% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with the Company’s existing and future unsecured senior debt. The 4.000% Senior Notes have interest payment dates of April 1 and October 1 of each year, commencing October 1, 2021. All of Scotts Miracle-Gro’s domestic subsidiaries that serve as guarantors of the 5.250% Senior Notes also serve as guarantors of the 4.000% Senior Notes. Receivables Facility On April 7, 2017, the Company entered into a Master Repurchase Agreement (including the annexes thereto, the “Repurchase Agreement”) and a Master Framework Agreement, as amended annually (the “Framework Agreement” and, together with the Repurchase Agreement, the “Receivables Facility”). Under the Receivables Facility, the Company may sell a portfolio of available and eligible outstanding customer accounts receivable to the purchasers and simultaneously agree to repurchase the receivables on a weekly basis. The eligible accounts receivable consist of accounts receivable generated by sales to three specified customers. The eligible amount of customer accounts receivables which may be sold under the Receivables Facility is $400.0 and the commitment amount during the seasonal commitment period beginning on February 26, 2021 and ending on June 18, 2021 is $160.0. The Receivables Facility expires on August 20, 2021. The Company accounts for the sale of receivables under the Receivables Facility as short-term debt and continues to carry the receivables on its Condensed Consolidated Balance Sheets, primarily as a result of the Company’s requirement to repurchase receivables sold. As of April 3, 2021 and March 28, 2020, there were $160.0 in borrowings on receivables pledged as collateral under the Receivables Facility, and the carrying value of the receivables pledged as collateral was $177.8. Interest Rate Swap Agreements The Company has outstanding interest rate swap agreements with major financial institutions that effectively convert a portion of the Company’s variable-rate debt to a fixed rate. Interest payments made between the effective date and expiration date are hedged by the swap agreements. Swap agreements that were hedging interest payments as of April 3, 2021, March 28, 2020 and September 30, 2020 had a maximum total U.S. dollar equivalent notional amount of $900.0, $850.0 and $600.0, respectively. The notional amount, effective date, expiration date and rate of each of the swap agreements outstanding at April 3, 2021 are shown in the table below:
Notional Amount |  | Effective Date (a) |  | Expiration Date |  | Fixed Rate
$ | 200 |  | (b) | 11/7/2018 |  | 6/7/2021 |  | 2.87 | %
100 |  |  | 11/7/2018 |  | 7/7/2021 |  | 2.96 | %
200 |  |  | 11/7/2018 |  | 10/7/2021 |  | 2.98 | %
100 |  |  | 12/21/2020 |  | 6/20/2023 |  | 1.36 | %
300 |  | (b) | 1/7/2021 |  | 6/7/2023 |  | 1.34 | %
200 |  |  | 10/7/2021 |  | 6/7/2023 |  | 1.37 | %
200 |  | (b) | 1/20/2022 |  | 6/20/2024 |  | 0.58 | %
200 |  |  | 6/7/2023 |  | 6/8/2026 |  | 0.85 | %
(a)The effective date refers to the date on which interest payments are first hedged by the applicable swap agreement. (b)Notional amount adjusts in accordance with a specified seasonal schedule. This represents the maximum notional amount at any point in time. Weighted Average Interest RateThe weighted average interest rates on the Company’s debt were 3.5% and 4.3% for the six months ended April 3, 2021 and March 28, 2020, respectively.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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