Debt

Retirement of 9.25% Senior Notes, Mayflower Term Loan, BFI Term Loan and Domestic Senior Credit Facility

In connection with our IPO, in April 2014, we retired a $24,000 term loan payable to Mayflower due December 31, 2016, a $10,000 term loan payable to BFI Co., LLC (“BFI”), a Bendheim family investment vehicle, due August 1, 2014 and $36,000 of outstanding borrowings under our domestic senior credit facility. In addition, in May 2014, we retired $300,000 of 9.25% senior notes, which were due July 1, 2018 (the “Senior Notes”). Primarily as the result of the retirement of the Senior Notes, our consolidated statement of operations for the year ended June 30, 2014 included a $22,771 loss on extinguishment of debt.

Revolving Credit Facility and Term B Loan

In April 2014, Phibro, together with certain of its subsidiaries acting as guarantors, entered into a Credit Agreement (the “Credit Agreement”) with lenders from time to time party thereto. 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 “Revolver,” and together with the Term B Loan, the “Credit Facilities”). The Revolver was undrawn at closing and contains a letter of credit facility. We issued the Term B Loan at 99.75% of par value. In connection with entering into the Credit Facilities, we incurred and capitalized deferred financing fees of $4,551.

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 Revolver 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 Revolver and the Term B Loan are April 2019 and April 2021, respectively.

Pursuant to the terms of the Credit Agreement, the Credit Facilities are subject to 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 Revolver 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 through June 30, 2015 and 4.25:1.00 for measurements periods thereafter. As of June 30, 2015, we were in compliance with the covenants of the Credit Facilities.

As of June 30, 2015, we had $3,000 in borrowings under the Revolver and had outstanding letters of credit of $14,008, leaving $82,992 available for borrowings and letters of credit under the Revolver. 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 weighted-average interest rate on the Revolver was 2.80% for the year ended June 30, 2015. There were no outstanding borrowings under the facility for the year ended June 30, 2014.

The weighted-average interest rate on the Term B loan was 4.00% for the years ended June 30, 2015 and 2014.

Foreign Short-Term Debt

Our Israel subsidiaries have aggregate credit facilities available of approximately $15 million (the “Israel Credit Facility”). As of June 30, 2015, 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 0.5%. The Israel Credit Facility matures in December 2015.

Long-Term Debt

As of June 30	2015			2014
Term B loan due April 2021		$	287,100		$	290,000
Capitalized lease obligations			18			94
			287,118			290,094
Unamortized debt discount			(600)			(703)
			286,518			289,391
Less: current maturities			(2,809)			(2,969)
		$	283,709		$	286,422

Aggregate Maturities of Long-Term Debt

For the Years Ended June 30
2016	$	2,913
2017		2,905
2018		2,900
2019		2,900
2020		2,900
Thereafter		272,600
Total	$	287,118