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DEBT | 12 Months Ended
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Dec. 31, 2013
Debt Instruments [Abstract] |
DEBT | DEBT Credit Facility At December 31, 2013, we had $233.4 million available under our $265 million senior revolving credit facility because we had issued $31.6 million of letters of credit under a $110 million subfacility. The senior revolving credit facility also has a $50 million Canadian subfacility. The senior revolving credit facility will expire in April 2017. Under the senior revolving credit facility, we may select various floating rate borrowing options. The actual interest rate paid on borrowings under the senior revolving credit facility is based on a pricing grid which is dependent upon the leverage ratio as calculated under the terms of the facility at the end of the prior fiscal quarter. The facility includes various customary restrictive covenants, including restrictions related to the ratio of debt to earnings before interest expense, taxes, depreciation and amortization (leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio). Compliance with these covenants is determined quarterly based on the operating cash flows for the last four quarters. We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of December 31, 2013 and 2012, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured. In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities. As of December 31, 2013, there were no covenants or other restrictions that limited our ability to borrow. At December 31, 2013, we had total letters of credit of $36.8 million outstanding, of which $31.6 million were issued under our $265 million senior revolving credit facility. The letters of credit are used to support certain long-term debt, certain workers compensation insurance policies, certain plant closure and post-closure obligations and certain international pension funding requirements. Long-Term Debt
| December 31,
| 2013 |  | 2012
Notes payable: | ($ in millions)
Variable-rate Go Zone bonds, due 2024 (1.42% and 1.72% at December 31, 2013 and 2012, respectively) | $ | 50.0 |  |  | $ | 50.0 |
Variable-rate Recovery Zone bonds, due 2024-2035 (1.42% and 1.72% at December 31, 2013 and 2012, respectively) | 103.0 |  |  | 103.0 |
Variable-rate Industrial development and environmental improvement obligations due 2025 (0.22% and 0.26% at December 31, 2013 and 2012, respectively) | 2.9 |  |  | 2.9 |
5.5%, due 2022 | 200.0 |  |  | 200.0 |
6.5%, due 2013 | — |  |  | 11.4 |
6.75%, due 2016 (includes interest rate swaps of $6.1 million and $8.4 million in 2013 and 2012, respectively) | 131.1 |  |  | 133.4 |
7.23%, SunBelt Notes due 2013-2017 (includes unamortized fair value premium of $0.8 million and $1.1 million and interest rate swaps of $1.2 million and $1.8 million in 2013 and 2012, respectively) | 50.7 |  |  | 63.9 |
8.875%, due 2019 (includes unamortized discount of $0.8 million in 2013 and $0.9 million in 2012) | 149.2 |  |  | 149.1 |
Capital lease obligations | 4.1 |  |  | — |
Total debt | 691.0 |  |  | 713.7 |
Amounts due within one year | 12.6 |  |  | 23.6 |
Total long-term debt | $ | 678.4 |  |  | $ | 690.1 |
In January 2013, we repaid the $11.4 million 2013 Notes, which became due. During 2013, assets of $4.2 million were acquired under capital leases with terms of 7 years. Pursuant to a note purchase agreement dated December 22, 1997, SunBelt sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G. The SunBelt Notes bear interest at a rate of 7.23% per annum, payable semi-annually in arrears on each June 22 and December 22. Beginning on December 22, 2002 and each year through 2017, SunBelt is required to repay $12.2 million of the SunBelt Notes, of which $6.1 million is attributable to the Series O Notes and of which $6.1 million is attributable to the Series G Notes. In conjunction with the SunBelt acquisition, we consolidated the SunBelt Notes with a fair value of $87.3 million for the remaining principal balance of $85.3 million as of February 28, 2011. In December 2013, 2012 and 2011, $12.2 million was repaid on these SunBelt Notes. In August 2012, we sold $200.0 million of 2022 Notes with a maturity date of August 15, 2022. The 2022 Notes were issued at par value. Interest is paid semi-annually on February 15 and August 15. The acquisition of KA Steel was partially financed with proceeds of $196.0 million, after expense of $4.0 million, from the 2022 Notes. In June 2012, we redeemed $7.7 million of industrial revenue bonds due in 2017. We paid a premium of $0.2 million to the bond holders, which was included in interest expense. We also recognized a $0.2 million deferred gain in interest expense related to the interest rate swaps, which were terminated in March 2012, on these industrial revenue bonds. In December 2011, we repaid the $75.0 million 2011 Notes, which became due. In December 2010, we completed a financing of Recovery Zone tax-exempt bonds totaling $42.0 million due 2033. The bonds were issued by MS Finance pursuant to a trust indenture between MS Finance and U.S. Bank National Association, as trustee. The bonds were sold to PNC Bank, as administrative agent for itself and a syndicate of participating banks, in a private placement under a Credit and Funding Agreement dated December 1, 2010, between us and PNC Bank. Proceeds of the bonds were loaned by MS Finance to us under a loan agreement, whereby we are obligated to make loan payments to MS Finance sufficient to pay all debt service and expenses related to the bonds. Our obligations under the loan agreement and related note bear interest at a fluctuating rate based on LIBOR. The financial covenants in the credit agreement mirror those in our senior revolving credit facility. The bonds may be tendered to us (without premium) periodically beginning November 1, 2015. During December 2010, we drew $42.0 million of the bonds. The proceeds from the bonds are required to be used to fund capital project spending for the ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS. As of December 31, 2013, $4.2 million of the proceeds remain with the trustee and are classified as a noncurrent asset on our consolidated balance sheet as restricted cash, until such time as we request reimbursement of qualifying amounts used for the Oxford, MS Winchester relocation. In October 2010, we completed a financing of tax-exempt bonds totaling $70.0 million due 2024. The bonds include $50.0 million of Go Zone and $20.0 million of Recovery Zone. The bonds were issued by the AL Authority pursuant to a trust indenture between the AL Authority and U.S. Bank National Association, as trustee. The bonds were sold to PNC Bank, as administrative agent for itself and a syndicate of participating banks, in a private placement under a Credit and Funding Agreement dated October 14, 2010, between us and PNC Bank. Proceeds of the bonds were loaned by the AL Authority to us under a loan agreement, whereby we are obligated to make loan payments to the AL Authority sufficient to pay all debt service and expenses related to the bonds. Our obligations under the loan agreement and related note bear interest at a fluctuating rate based on LIBOR. The financial covenants in the credit agreement mirror those in our senior revolving credit facility. The bonds may be tendered to us (without premium) periodically beginning November 1, 2015. We had the option to borrow up to the entire $70.0 million in a series of draw downs through December 31, 2011. We drew $36.0 million of the bonds in 2011 and $34.0 million in 2010. The proceeds from the bonds are required to be used to fund capital project spending at our McIntosh, AL facility and were fully utilized as of December 31, 2012. Annual maturities of long-term debt, including capital lease obligations, are $12.6 million in 2014, $12.6 million in 2015, $143.7 million in 2016, $14.6 million in 2017, $0.5 million in 2018 and a total of $507.0 million thereafter. We have entered into interest rate swaps, as disclosed below, whereby we agree to pay variable and fixed rates to a counterparty who, in turn, pays us fixed and variable rates. In all cases the underlying index for variable rates is the six-month LIBOR. Accordingly, payments are settled every six months and the terms of the swaps are the same as the underlying debt instruments. The following table reflects the swap activity related to certain debt obligations:
Underlying Debt Instrument |  | Swap Amount |  | Date of Swap |  | December 31, 2013
|  | ($ in millions) |  |  |  | Olin Pays Floating Rate:
6.75%, due 2016 |  | $ | 65.0 |  |  | March 2010 |  | 3.5 - 4.5% | (a)
6.75%, due 2016 |  | $ | 60.0 |  |  | March 2010 |  | 3.5 - 4.5% | (a)
|  |  |  |  |  | Olin Receives Floating Rate:
6.75%, due 2016 |  | $ | 65.0 |  |  | October 2011 |  | 3.5 - 4.5% | (a)
6.75%, due 2016 |  | $ | 60.0 |  |  | October 2011 |  | 3.5 - 4.5% | (a)
(a) | Actual rate is set in arrears. We project the rate will fall within the range shown.
In March 2010, we entered into interest rate swaps on $125 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, pays us fixed rates. The counterparty to these agreements is Citibank. In October 2011, we entered into $125 million of interest rate swaps with equal and opposite terms as the $125 million variable interest rate swaps on the 2016 Notes. We have agreed to pay a fixed rate to a counterparty who, in turn, pays us variable rates. The counterparty to this agreement is also Citibank. The result was a gain of $11.0 million on the $125 million variable interest rate swaps, which will be recognized through 2016. As of December 31, 2013, $6.1 million of this gain was included in long-term debt. In October 2011, we de-designated our $125 million interest rate swaps that had previously been designated as fair value hedges. The $125 million variable interest rate swaps and the $125 million fixed interest rate swaps do not meet the criteria for hedge accounting. All changes in the fair value of these interest rate swaps are recorded currently in earnings. In 2001 and 2002, we entered into interest rate swaps on $75 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, paid us fixed rates. The counterparty to these agreements was Citibank. In January 2009, we entered into a $75 million fixed interest rate swap with equal and opposite terms as the $75 million variable interest rate swaps on the 2011 Notes. We agreed to pay a fixed rate to a counterparty who, in turn, paid us variable rates. The counterparty to this agreement was Bank of America. The result was a gain of $7.9 million on the $75 million variable interest rate swaps, which was recognized through 2011. In January 2009, we de-designated our $75 million interest rate swaps that had previously been designated as fair value hedges. The $75 million variable interest rate swaps and the $75 million fixed interest rate swap did not meet the criteria for hedge accounting. All changes in the fair value of these interest rate swaps were recorded currently in earnings. In June 2012, we terminated $73.1 million of interest rate swaps with Wells Fargo that had been entered into on the SunBelt Notes in May 2011. The result was a gain of $2.2 million which will be recognized through 2017. As of December 31, 2013, $1.2 million of this gain was included in long-term debt. Our loss in the event of nonperformance by these counterparties could be significant to our financial position and results of operations. These interest rate swaps reduced interest expense by $2.9 million, $3.4 million and $7.2 million for 2013, 2012 and 2011, respectively. The difference between interest paid and interest received is included as an adjustment to interest expense.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 3: 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 + Details
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