Debt

12 Months Ended

Jun. 30, 2014

Debt

Revolving Credit Facility and Term B Loan

On April 16, 2014, Phibro, together with certain of its subsidiaries acting as guarantors, entered into a Credit Agreement (the “Credit Agreement”) with Bank of America, N.A. (“Bank of America”), as Administrative Agent, Collateral Agent and L/C Issuer, and each lender from time to time party thereto (the “Lenders”). Under the Credit Agreement, the Lenders agreed to extend credit to the Company in the form of (i) a Term B loan in an aggregate principal amount equal to $290,000 (the “Term B Loan”) and (ii) a revolving credit facility in an aggregate principal amount of $100,000 (the “Revolving Credit Facility,” and together with the Term B Loan, the “Credit Facilities”). The Revolving Credit Facility was undrawn at closing and contains a letter of credit facility.

Borrowings under the Credit Facilities bear interest based on a fluctuating rate equal to the sum of an applicable margin and, at the Company’s election from time to time, either (1) a Eurocurrency rate determined by reference to LIBOR with a term as selected by the Company, of one day or one, two, three or six months (or twelve months or any shorter amount of time if consented to by all of the lenders under the applicable loan), or (2) a base rate determined by reference to the highest of (a) the rate as publicly announced from time to time by Bank of America as its “prime rate,” (b) the federal funds effective rate plus 0.50% and (c) one-month LIBOR plus 1.00%. The Revolving Credit Facility has applicable margins equal to 1.50% or 1.75%, in the case of base rate loans, and 2.50% or 2.75%, in the case of LIBOR loans; the margins are based on the First Lien Net Leverage Ratio. The Term B Loan has applicable margins equal to 2.00%, in the case of base rate loans, and 3.00%, in the case of LIBOR loans. Interest on the Term B Loan is subject to a floor of 1.00% in the case of LIBOR loans.

Indebtedness under the Credit Facilities is collateralized by a first priority lien on substantially all assets of Phibro and certain of our domestic subsidiaries. The Term B Loan requires, among other things, mandatory quarterly principal payments of $725 beginning September 2014. The maturity dates of the Revolving Credit Facility and the Term B Loan are April 15, 2019 and April 15, 2021, respectively.

We issued the Term B Loan at 99.75% of par value, with proceeds of $284,740, after deducting $5,260 of original issue discount and costs related to the issuance of these facilities.

As of June 30, 2014, we had no outstanding borrowings under the Revolving Credit Facility and had outstanding letters of credit and other commitments of $17,140, leaving $82,860 available for borrowings and letters of credit under the Revolving Credit Facility.

We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less than one year.

The Credit Facilities contains various covenants which, among other things and subject to the permitted exceptions described therein, restrict us and our subsidiaries with respect to: (i) incurring additional debt; (ii) making certain restricted payments or making optional redemptions of other indebtedness; (iii) making investments or acquiring assets; (iv) disposing of assets (other than in the ordinary course of business); (v) creating any liens on our assets; (vi) entering into transactions with affiliates; (vii) entering into merger or consolidation transactions; and (viii) creating guarantee obligations; provided, however, that we are permitted to pay distributions to stockholders out of available cash subject to certain annual limitations and so long as no default or event of default under the Credit Facilities shall have occurred and be continuing at the time such distribution is declared.

The Revolving Credit Facility requires, among other things, the maintenance of a maximum consolidated first lien net debt to consolidated EBITDA leverage ratio, calculated on a trailing four quarter basis, and contains an acceleration clause should an event of default (as defined in the agreement) occur. The permitted maximum ratio is 4.50:1.00 for measurement periods beginning September 30, 2014 through June 30, 2015 and 4.25:1.00 for measurements periods thereafter. As of June 30, 2014, we were in compliance with the covenants of the Credit Facilities.

Long-Term Debt

As of June 30
Term B loan due April 15, 2021	$	290,000		$	—
Senior notes due July 1, 2018		—			300,000
Term loan payable to Mayflower due December 31, 2016		—			24,000
Term loan payable to BFI due August 1, 2014		—			10,000
Capitalized lease obligations		94			132
		290,094			334,132
Unamortized debt discount		(703	)		(2,528	)
		289,391			331,604
Less: current maturities		(2,969	)		(64	)
	$	286,422		$	331,540

Foreign Bank Loans

Our Israel subsidiaries have aggregate credit facilities available of approximately $15 million (the “Israel Credit Facility”). As of June 30, 2014, we had no outstanding borrowings or other commitments outstanding under the Israel Credit Facility. Interest rate elections under the Israel Credit Facility are LIBOR plus 2.25% or Prime Rate plus 1.00%. The Israel Credit Facility matures on December 31, 2014.

Aggregate Maturities of Long-Term Debt

	For the Years Ended June 30
	2015			$ 2,969
	2016			2,918
	2017			2,907
	2018			2,900
	2019			2,900
	Thereafter			275,500
	Total			$ 290,094

- 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.

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