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Long-Term Debt | 12 Months Ended
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Dec. 31, 2019
Long-Term Debt [Abstract] |
Long-Term Debt | Note 6 – Long-Term Debt Long-term debt consists of the following:
|  | December 31, 2019 |  |  | December 31, 2018 |
Credit facility |  | $ | - |  |  | $ | - |
Convertible senior notes, due 2025 |  |  | 509,128 |  |  |  | 495,203 |
Convertible senior debentures, due 2040 |  |  | 126 |  |  |  | 539 |
Convertible senior debentures, due 2041 |  |  | 6,677 |  |  |  | 12,812 |
Convertible senior debentures, due 2042 |  |  | - |  |  |  | 923 |
Deferred financing costs |  |  | (16,784 | ) |  |  | (14,968 | )
|  |  | 499,147 |  |  |  | 494,509 |
Less current portion |  |  | - |  |  |  | - |
|  | $ | 499,147 |  |  | $ | 494,509 |
Credit Facility On June 5, 2019, the Company entered into a new credit agreement with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent, and the lenders (the "New Credit Facility"), which provides an aggregate commitment of $750,000 of revolving loans available until June 5, 2024. The New Credit Facility replaces Vishay’s previous credit agreement that provided for an aggregate commitment of $640,000, and that was scheduled to mature on December 10, 2020. The New Credit Facility also provides for the ability of Vishay to request up to $300,000 of incremental facilities, subject to the satisfaction of certain conditions, which could take the form of additional revolving commitments, incremental “term loan A” or “term loan B” facilities, or incremental equivalent debt. Borrowings under the New Credit Facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on the Company's leverage ratio. Based on the Company's current leverage ratio, borrowings bear interest at LIBOR plus 1.50%, the same as pursuant to the previous credit agreement. The Company also pays a commitment fee, also based on its leverage ratio, on undrawn amounts. The undrawn commitment fee, based on the Company's current leverage ratio, is 0.25% per annum, an improvement of 5 basis points over the previous credit agreement. The New Credit Facility allows an unlimited amount of defined “Investments,” which include certain intercompany transactions and acquisitions, provided the Company's pro forma leverage ratio is equal to or less than 2.75 to 1.00. If the Company's pro forma leverage ratio is greater than 2.75 to 1.00, such Investments are subject to certain limitations. The New Credit Facility also allows an unlimited amount of defined "Restricted Payments," which include cash dividends and share repurchases, provided the Company's pro forma leverage ratio is equal to or less than 2.50 to 1.00. If the Company's pro forma leverage ratio is greater than 2.50 to 1.00, the New Credit Facility allows such payments up to $100,000 per annum (subject to a cap of $300,000 for the term of the facility, with up to $25,000 of any unused amount of the $100,000 per annum base available for use in the next succeeding calendar year). Similar to the previous credit agreement, the borrowings under the New Credit Facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of the Company and certain significant subsidiaries located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries. The New Credit Facility continues to limit or restrict the Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming the Company’s pro forma leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming the Company's pro forma leverage ratio is greater than 2.50 to 1.00), and requires the Company to comply with other covenants, including the maintenance of specific financial ratios. Similar to the previous credit agreement, the New Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, material misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings, the insolvency of the Company or certain of its significant subsidiaries, and the rendering of a judgment in excess of $50,000 against the Company or its subsidiaries. Upon the occurrence of an event of default under the New Credit Facility, the Company's obligations under the credit facility may be accelerated and the lending commitments under the credit facility may be terminated. At December 31, 2019 and 2018, there was $747,912 and $636,211, respectively, available under the Credit Facility. Letters of credit totaling $2,088 and $3,789 were outstanding at December 31, 2019 and 2018, respectively. Convertible Debt Instruments In June 2018, the Company issued $600,000 aggregate principal amount of 2.25% convertible senior notes due 2025 to qualified institutional investors. The following table summarizes some key facts and terms regarding the outstanding convertible debt instruments as of December 31, 2019:
|  | Due 2025 |  |  | Due 2040 |  |  | Due 2041 |
Issuance date |  | June 12, 2018 |  |  | November 9, 2010 |  |  | May 13, 2011 |
Maturity date |  | June 15, 2025 |  |  | November 15, 2040 |  |  | May 15, 2041 |
Principal amount |  | $ | 600,000 |  |  | $ | 300 |  |  | $ | 16,890 |
Cash coupon rate (per annum) |  |  | 2.25 | % |  |  | 2.25 | % |  |  | 2.25 | %
Nonconvertible debt borrowing rate at issuance (per annum) |  |  | 5.50 | % |  |  | 8.00 | % |  |  | 8.375 | %
Conversion rate effective December 12, 2019 (per $1 principal amount) |  |  | 31.8083 |  |  |  | 80.0018 |  |  |  | 58.3812 |
Effective conversion price effective December 12, 2019 (per share) |  | $ | 31.44 |  |  | $ | 12.50 |  |  | $ | 17.13 |
130% of the conversion price (per share) |  | $ | 40.87 |  |  | $ | 16.25 |  |  | $ | 22.27 |
Call date |  |  | n/a |  |  | November 20, 2020 |  |  | May 20, 2021 |
The terms of the convertible senior debentures due 2040 and due 2041 are generally congruent. The terms of the fully retired convertible senior debentures due 2042 were also generally congruent to the convertible senior debentures due 2040 and due 2041. Prior to three months before the maturity date, the holders may convert their convertible senior debentures due 2040 and due 2041 only under the following circumstances: (1) during any fiscal quarter after the first full quarter subsequent to issuance, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. The convertible senior debentures due 2040 are currently convertible. The convertible senior debentures due 2041 are not currently convertible. Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) during any fiscal quarter after the fiscal quarter ending September 29, 2018, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the notes falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions. The convertible senior notes due 2025 are not currently convertible. At the direction of its Board of Directors, the Company intends, upon future conversion of any of the convertible debt instruments, to repay the principal amounts of the convertible debt instruments in cash and settle any additional amounts in shares of Vishay common stock. Vishay must provide additional shares upon conversion if there is a “fundamental change” in the business as defined in the indenture governing the debentures. Vishay may not redeem the convertible senior debentures prior to the respective call dates. On or after the call date and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay’s common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption. The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible debt instruments effective as of the ex-dividend date of each cash dividend. The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $0.085 per share of common stock. GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The resulting discount on the debt is amortized as non-cash interest expense in future periods. The carrying values of the liability and equity components of the convertible debentures are reflected in the Company’s accompanying consolidated balance sheets as follows:
|  | Principal amount of the convertible debt |  |  | Unamortized discount |  |  | Embedded derivative |  |  | Carrying value of liability component |  |  | Equity component (including temporary equity) - net carrying value |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible senior notes due 2025 |  | $ | 600,000 |  |  |  | (90,872 | ) |  |  | - |  |  | $ | 509,128 |  |  | $ | 85,262 |
Convertible senior debentures |  | $ | 17,190 |  |  |  | (10,387 | ) |  |  | - |  |  | $ | 6,803 |  |  | $ | 7,129 |
Total |  | $ | 617,190 |  |  | $ | (101,259 | ) |  | $ | - |  |  | $ | 515,931 |  |  | $ | 92,391 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible senior notes due 2025 |  | $ | 600,000 |  |  |  | (104,797 | ) |  |  | - |  |  | $ | 495,203 |  |  | $ | 85,262 |
Convertible senior debentures |  | $ | 36,556 |  |  |  | (22,352 | ) |  |  | 70 |  |  | $ | 14,274 |  |  | $ | 15,092 |
Total |  | $ | 636,556 |  |  | $ | (127,149 | ) |  | $ | 70 |  |  | $ | 509,477 |  |  | $ | 100,354 |
Interest is payable on the convertible debt instruments semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company’s estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, contingent interest will accrue in certain circumstances relating to the trading price of the convertible senior debentures due 2040 and due 2041 and under certain other circumstances, beginning ten years subsequent to their respective issuance. The convertible senior notes due 2025 do not possess contingent interest features. Interest expense related to the debentures is reflected on the accompanying consolidated statements of operations for the years ended December 31:
|  | Contractual coupon interest |  |  | Non-cash amortization of debt discount |  |  | Non-cash amortization of deferred financing costs |  |  | Non-cash change in value of derivative liability |  |  | Total interest expense related to the debentures |
2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible senior notes due 2025 |  | $ | 13,500 |  |  |  | 13,925 |  |  |  | 1,816 |  |  |  | - |  |  | $ | 29,241 |
Convertible senior debentures |  | $ | 498 |  |  |  | 221 |  |  |  | 7 |  |  |  | (42 | ) |  | $ | 684 |
Total |  | $ | 13,998 |  |  | $ | 14,146 |  |  | $ | 1,823 |  |  | $ | (42 | ) |  | $ | 29,925 |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible senior notes due 2025 |  | $ | 7,463 |  |  |  | 7,240 |  |  |  | 1,059 |  |  |  | - |  |  | $ | 15,762 |
Convertible senior debentures |  | $ | 8,627 |  |  |  | 3,529 |  |  |  | 126 |  |  |  | 128 |  |  | $ | 12,410 |
Total |  | $ | 16,090 |  |  | $ | 10,769 |  |  | $ | 1,185 |  |  | $ | 128 |  |  | $ | 28,172 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible senior debentures |  | $ | 12,938 |  |  |  | 4,984 |  |  |  | 189 |  |  |  | (316 | ) |  | $ | 17,795 |
Total |  | $ | 12,938 |  |  | $ | 4,984 |  |  | $ | 189 |  |  | $ | (316 | ) |  | $ | 17,795 |
The Company used substantially all of the net proceeds of the June 2018 issuance of convertible senior notes due 2025 to repurchase $220,000 and $69,060 principal amounts of convertible senior debentures due 2040 and due 2042, respectively. The net carrying value of the debentures repurchased were $89,276 and $29,037, respectively. In accordance with the authoritative accounting guidance for convertible debentures, the aggregate repurchase payment of $584,991 was allocated between the liability ($133,647) and equity (including temporary equity, $451,344) components of the convertible debentures, using the Company's nonconvertible debt borrowing rate at the time of the repurchases. As a result, the Company recognized a loss on extinguishment of convertible debentures of $17,309, including the write-off of a portion of unamortized debt issuance costs. The Company used a substantial portion of the cash repatriated to the United States in 2018 (see Note 5) to repurchase $53,690, $116,922, and $78,772 principal amounts of convertible senior debentures due 2040, due 2041, and due 2042, respectively. The net carrying value of the debentures repurchased were $22,018, $45,157, and $33,466, respectively. In accordance with the authoritative accounting guidance for convertible debentures, the aggregate repurchase payment of $376,004 was allocated between the liability ($108,059) and equity (including temporary equity, $267,945) components of the convertible debentures, using the Company's nonconvertible debt borrowing rate at the time of the repurchases. As a result, the Company recognized a loss on extinguishment of convertible debentures of $9,274, including the write-off of a portion of unamortized debt issuance costs. The Company used cash to repurchase $1,010, $16,188 and $2,168 principal amounts of convertible senior debentures due 2040, due 2041, and due 2042, respectively, in 2019. The net carrying value of the debentures repurchased were $417, $6,282, and $924, respectively. In accordance with the authoritative accounting guidance for convertible debentures, the aggregate repurchase payment of $27,863 was allocated between the liability ($9,568) and equity (including temporary equity, $18,295) components of the convertible debentures, using the Company's nonconvertible debt borrowing rate at the time of the repurchase. As a result, the Company recognized a loss on extinguishment of convertible debentures of $2,030, including the write-off of a portion of unamortized debt issuance costs. The convertible senior debentures due 2042 have been fully repurchased, and the trustee has confirmed that the Company has satisfied and discharged its obligations under the indenture governing the convertible senior debentures due 2042. Other Borrowings Information None of the Company's long-term debt matures in the next five years. At December 31, 2019 and 2018, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $6,000 and $7,000, respectively, with substantially no amounts borrowed. Interest paid was $16,177, $23,859, and $21,216 for the years ended December 31, 2019, 2018, and 2017, respectively. See Note 18 for further discussion on the fair value of the Company’s long-term debt.

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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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