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Debt | 9 Months Ended
--- | ---
Jun. 30, 2015
Debt Disclosure [Abstract] |
Debt | Debt The Company’s consolidated debt consists of the following:
|  | June 30, 2015 |  | September 30, 2014 |  |
|  | Amount |  | Rate |  | Amount |  | Rate |  | Interest rate
HRG |  |  |  |  |  |  |  |  |  |
7.875% Senior Secured Notes, due July 15, 2019 |  | $ | 864.4 |  |  | 7.9 | % |  | $ | 604.4 |  |  | 7.9 | % |  | Fixed rate
7.75% Senior Unsecured Notes, due January 15, 2022 |  | 890.0 |  |  | 7.8 | % |  | 750.0 |  |  | 7.8 | % |  | Fixed rate
Spectrum Brands |  |  |  |  |  |  |  |  |  |
Term Loan, due September 4, 2017 (Tranche A)* |  | — |  |  | — | % |  | 648.4 |  |  | 3.0 | % |  | Variable rate, see below
Term Loan, due September 4, 2019 (Tranche C)* |  | — |  |  | — | % |  | 509.9 |  |  | 3.6 | % |  | Variable rate, see below
Term Loan, due June 23, 2022** |  | 1,450.0 |  |  | 3.8 | % |  | — |  |  | — | % |  | Variable rate, see below
CAD Term Loan, due December 17, 2019* |  | — |  |  | — | % |  | 34.2 |  |  | 5.1 | % |  | Variable rate, see below
CAD Term Loan, due June 23, 2022** |  | 60.9 |  |  | 4.5 | % |  | — |  |  | — | % |  | Variable rate, see below
Euro Term Loan, due September 4, 2019 (Tranche A)* |  | — |  |  | — | % |  | 283.3 |  |  | 3.8 | % |  | Variable rate, see below
Euro Term Loan, due June 23, 2022** |  | 336.2 |  |  | 3.5 | % |  | — |  |  | — | % |  | Variable rate, see below
6.375% Senior Notes, due November 15, 2020 |  | 520.0 |  |  | 6.4 | % |  | 520.0 |  |  | 6.4 | % |  | Fixed rate
6.625% Senior Notes, due November 15, 2022 |  | 570.0 |  |  | 6.6 | % |  | 570.0 |  |  | 6.6 | % |  | Fixed rate
6.75% Senior Notes, due March 15, 2020 |  | — |  |  | — | % |  | 300.0 |  |  | 6.8 | % |  | Fixed rate
6.125% Notes, due December 15, 2024 |  | 250.0 |  |  | 6.1 | % |  | — |  |  | — | % |  | Fixed rate
5.75% Notes, due July 15, 2025 |  | 1,000.0 |  |  | 5.8 | % |  | — |  |  | — | % |  | Fixed rate
Revolver Facility, expiring June 23, 2020 |  | 47.5 |  |  | 5.3 | % |  | — |  |  | — | % |  | Variable rate, see below
Other notes and obligations |  | 31.0 |  |  | 13.6 | % |  | 36.6 |  |  | 8.8 | % |  | Various
Capitalized lease obligations |  | 88.7 |  |  | 5.9 | % |  | 94.7 |  |  | 6.1 | % |  | Various
FGL |  |  |  |  |  |  |  |  |  |
6.375% Senior Notes, due April 1, 2021 |  | 300.0 |  |  | 6.4 | % |  | 300.0 |  |  | 6.4 | % |  | Fixed rate
FGL Credit Agreement |  | — |  |  | 5.3 | % |  | — |  |  | 5.3 | % |  | Variable rate, see below
Compass |  |  |  |  |  |  |  |  |  |
Compass Credit Agreement, due February 14, 2018 |  | 327.0 |  |  | 2.7 | % |  | 243.2 |  |  | 2.7 | % |  | Variable rate, see below
Salus |  |  |  |  |  |  |  |  |  |
Unaffiliated long-term debt of consolidated variable-interest entity |  | 113.4 |  |  | 10.0 | % |  | 193.0 |  |  | 6.7 | % |  | Variable rate, see below
Secured borrowings under non-qualifying loan participations |  | 11.2 |  |  | 9.4 | % |  | 106.8 |  |  | 10.8 | % |  | Fixed rate
Total |  | 6,860.3 |  |  |  |  | 5,194.5 |  |  |  |  |
Original issuance discounts on debt, net of premiums |  | (27.6 | ) |  |  |  | (36.7 | ) |  |  |  |
Total debt |  | 6,832.7 |  |  |  |  | 5,157.8 |  |  |  |  |
Less current maturities and short-term debt |  | 51.4 |  |  |  |  | 96.7 |  |  |  |  |
Non-current portion of debt |  | $ | 6,781.3 |  |  |  |  | $ | 5,061.1 |  |  |  |  |
________________________ *Together, defined as the "Prior Term Loan" ** Together, defined as the "Term Loan" HRG April Secured Notes On April 14, 2015, the Company issued $100.0 aggregate principal amount of additional 7.875% Notes (the "April Secured Notes"). The April Secured Notes were priced at 104.5% of par plus accrued interest from January 15, 2015. Interest on the 7.875% Notes is payable semi-annually, in January and July. In connection with the April Secured Notes offering, the Company recorded $2.0 of fees during the three and nine months ended June 30, 2015. These fees were classified as "Other assets" in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2015, and are being amortized to interest expense utilizing the effective interest method over the term of the April Secured Notes. The April Secured Notes were issued under the Company's existing indenture governing the 7.875% Notes. May Secured Notes On May 19, 2015, the Company issued $160.0 aggregate principal amount of additional 7.875% Notes (the "May Secured Notes"). The May Secured Notes were priced at 104.5% of par plus accrued interest from January 15, 2015. Interest on the 7.875% Notes is payable semi-annually, in January and July. In connection with the May Secured Notes offering, the Company recorded $2.5 of fees during the three and nine months ended June 30, 2015. These fees were classified as "Other assets" in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2015, and are being amortized to interest expense utilizing the effective interest method over the term of the May Secured Notes. The May Secured Notes were issued under the Company's existing indenture governing the 7.875% Notes. May Unsecured Notes On May 19, 2015, the Company issued $140.0 aggregate principal amount of additional 7.75% Notes (the "May Unsecured Notes"). The May Unsecured Notes were priced at 98.51% of par plus accrued interest from January 15, 2015. Interest on the 7.75% Notes is payable semi-annually, in January and July. In connection with the May Unsecured Notes offering, the Company recorded $2.2 of fees during the three and nine months ended June 30, 2015. These fees were classified as "Other assets" in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2015, and are being amortized to interest expense utilizing the effective interest method over the term of the May Unsecured Notes. The May Unsecured Notes were issued under the Company's existing indenture governing the 7.75% Notes. Spectrum Brands Interest terms Certain of Spectrum Brands’ debt instruments are subject to variable interest rates. The variable rates are weighted averages based on outstanding debt balances and corresponding rates in effect as of the period end. At June 30, 2015, Spectrum Brands’ variable interest rate terms were as follows: in the case of the U.S. dollar denominated term loan facility (the "USD Term Loan"), either adjusted LIBOR (International Exchange London Interbank Offered Rate), subject to a 0.75% floor, plus 3.0% per annum, or base rate plus 2% per annum; in the case of the Canadian dollar ("CAD") denominated term loan facility (the "CAD Term Loan"), either CDOR (Canadian Dollar Offered Rate), subject to a 0.75% floor (0.99% at June 28, 2015) plus 3.5% per annum, or base rate plus 2.5% per annum; in the case of Euro denominated term loan facility (the "Euro Term Loan"), EURIBOR (Euro Interbank Offered Rate), subject to a 0.75% floor, plus 2.75% per annum, with no base rate option available; and in the case of cash flow based revolving credit facility (the “Revolver Facility”), either adjusted LIBOR plus 3.0% per annum or base rate plus 2.0% per annum. Term Loan On June 23, 2015, Spectrum Brands, Inc., a subsidiary of Spectrum Brands ("SBI") entered into term loan facilities pursuant to a Senior Credit Agreement consisting of a $1,450.0 USD Term Loan due June 23, 2022, a $75.0 CAD Term Loan due June 23, 2022 and a €300.0 Euro Term Loan due June 23, 2022 (together, the "Term Loan") and entered into a $500.0 Revolver Facility due June 23, 2020. The proceeds from the Term Loan facilities and draws on the Revolver Facility were used to repay Spectrum Brands’ then-existing senior term credit facility, repay Spectrum Brands’ outstanding 6.75% senior unsecured notes due 2020, repay and replace the Spectrum Brands’ then-existing asset based revolving loan facility, and to pay fees and expenses in connection with the refinancing and for general corporate purposes. Subject to certain mandatory prepayment events, the Term Loan is subject to repayment according to scheduled amortizations, with the final payments of all amounts outstanding, plus accrued and unpaid interest, due at maturity. The Senior Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on SBI and its restricted subsidiaries’ ability to incur indebtedness, create liens, make investments, pay dividends or make certain other distributions, and merge or consolidate or sell assets, in each case subject to certain exceptions set forth in the Senior Credit Agreement. Pursuant to a guarantee agreement, Spectrum Brands' wholly owned subsidiary, SB/RH Holdings, LLC and the material wholly-owned domestic subsidiaries of SBI have guaranteed SBI’s obligations under the Senior Credit Agreement and related loan documents. Pursuant to a security agreement, SBI and such subsidiary guarantors have pledged substantially all of their respective assets to secure such obligations and, in addition, SB/RH Holdings, LLC has pledged the capital stock of SBI to secure such obligations. The Senior Credit Agreement also provides for customary events of default including payment defaults and cross-defaults to other material indebtedness. In addition, the Senior Credit Agreement, solely with respect to the Revolver Facility, contains a financial covenant on the maximum net total leverage ratio that is tested on the last day of each fiscal quarter commencing with the fiscal quarter ending September 30, 2015. The USD Term Loan, the CAD Term Loan and the Euro Term Loan were issued at a 0.25%, 1.0% and 0.25% discount, respectively and were recorded net of the $3.6, $0.8 and €0.8 , respectively. The discount will be amortized as an adjustment to the carrying value of principal with a corresponding charge to interest expense over the remaining life of the respective loans. Spectrum Brands previously issued €150.0 of term debt in the three months ended December 31, 2014 and repaid the same term debt in the three months ended June 30, 2015 in connection with the issuance of the Euro Term Loan incurring Spectrum Brands recorded $2.6 of fees for the three months ended June 30, 2015. In connection with the issuance costs of the USD Term Loan, the CAD Term Loan and the Euro Term Loan, Spectrum Brands recorded $12.4, $0.6 and $4.9 of fees, respectively, of which $4.5, $0.4 and $2.6, respectively, are classified as "Other assets" in the accompanying Condensed Consolidated Balance Sheets and are amortized as an adjustment to interest expense over the remaining life of the respective loans with the remainder of reflected as an increase to interest expense for the three and nine months ended June 30, 2015. Spectrum Brands recorded accelerated amortization of portions of the unamortized discount and unamortized debt issuance costs related to the refinancing of the USD Term Loan, the CAD Term Loan and the Euro Term Loan of $5.1, $0.4 and $2.3, respectively, as an increase to interest expense for the three and nine months ended June 30, 2015. 6.125% Notes On December 4, 2014, Spectrum Brands issued $250.0 aggregate principal amount of 6.125% Notes at par value, due December 15, 2024 (the “6.125% Notes”). The 6.125% Notes are guaranteed by SB/RH Holdings, LLC, as well as by Spectrum Brands' existing and future domestic subsidiaries. Spectrum Brands may redeem all or a part of the 6.125% Notes, at any time on or after December 15, 2019, at specified redemption prices. In addition, prior to December 15, 2019, Spectrum Brands may redeem the notes at a redemption price equal to 100% of the principal amount plus a “make-whole” premium. Spectrum Brands is also entitled to redeem up to 35% of the aggregate principal amount of the notes before December 15, 2017 with an amount of cash equal to the net proceeds that Spectrum Brands raises in equity offerings at specified redemption prices. Further, the indenture governing the 6.125% Notes (the “2024 Indenture”) requires Spectrum Brands to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of Spectrum Brands, as defined in the 2024 Indenture. The 2024 Indenture contains customary covenants that limit, among other things, the incurrence of additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates. In addition, the 2024 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or on acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. Events of default under the 2024 Indenture arising from certain events of bankruptcy or insolvency will automatically cause the acceleration of the amounts due under the 6.125% Notes. If any other event of default under the 2024 Indenture occurs and is continuing, the trustee for the 2024 Indenture or the registered holders of at least 25% in the then aggregate outstanding principal amount of the 6.125% Notes, may declare the acceleration of the amounts due under those notes. Spectrum Brands recorded $4.6 of fees in connection with the offering of the 6.125% Notes for the nine months ended June 30, 2015. The fees were classified as "Other assets" within the accompanying unaudited Condensed Consolidated Financial Statements and are amortized as an adjustment to interest expense over the remaining life of the 6.125% Notes. 5.75% Notes On May 20, 2015, in connection with the acquisition of the AAG Business, Spectrum Brands issued $1,000.0 aggregate principal amount of 5.75% Notes at par value, due July 15, 2025 (the "5.75% Notes"). The 5.75% Notes are guaranteed by SB/RH Holdings, LLC, as well as by Spectrum Brands' existing and future domestic subsidiaries. Spectrum Brands may redeem all or a part of the 5.75% Notes, at any time on or after July 15, 2020, at specified redemption prices. In addition, prior to July 15, 2020, Spectrum Brands may redeem the notes at a redemption price equal to 100% of the principal amount plus a “make-whole” premium. Spectrum Brands is also entitled to redeem up to 35% of the aggregate principal amount of the notes before July 15, 2018 with an amount of cash equal to the net proceeds that Spectrum Brands raises in equity offerings at specified redemption prices. Further, the indenture governing the 5.75% Notes (the “2025 Indenture”) requires Spectrum Brands to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of Spectrum Brands, as defined in the 2025 Indenture. The 2025 Indenture contains customary covenants that limit, among other things, the incurrence of additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates. In addition, the 2025 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or on acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. Events of default under the 2025 Indenture arising from certain events of bankruptcy or insolvency will automatically cause the acceleration of the amounts due under the 5.75% Notes. If any other event of default under the 2025 Indenture occurs and is continuing, the trustee for the 2025 Indenture or the registered holders of at least 25% in the then aggregate outstanding principal amount of the 5.75% Notes, may declare the acceleration of the amounts due under those notes. Spectrum Brands recorded $19.5 of fees in connection with the offering of the 5.75% Notes for the three and nine months ended June 30, 2015. The fees are classified as "Other assets" within the accompanying Condensed Consolidated Balance Sheets and are amortized as an adjustment to interest expense over the remaining life of the 5.75% Notes. 6.75% Notes On June 23, 2015 Spectrum Brands called its $300.0 outstanding aggregate principal amount of 6.75% senior unsecured notes due 2020 (“the 6.75% Notes”). In connection with the call, Spectrum Brands paid the trustee principal, interest and a call premium sufficient to redeem the $300.0 of 6.75% Notes outstanding. The trustee under the indenture governing the 6.75% Notes accepted those funds in trust for the benefit of the holders of the 6.75% Notes and has acknowledged the satisfaction and discharge of the 6.75% Notes and the indenture governing the 6.75% Notes. On July 23, 2015 the Trustee redeemed the 6.75% Notes. In connection with the call, Spectrum Brands recorded $15.2 of fees and expenses as a cash charge to interest expense for the three and nine months ended June 30, 2015. In connection with the satisfaction and discharge process, Spectrum Brands recorded cash charges of $1.7 to interest expense for the three and nine months ended June 30, 2015. In addition, $4.1 of debt issuance costs related to the 6.75% Notes were written off as a non-cash charge to interest expense for the three and nine months ended June 30, 2015. Revolver Facility As noted above, on June 23, 2015, Spectrum Brands entered into a new Revolver Facility under the Senior Credit Agreement for $500.0 of aggregate commitment maturing on June 23, 2020. In connection with the new Revolver Facility, the Company incurred $5.7 of fees all of which are classified as "Other assets" within the accompanying Condensed Consolidated Balance Sheets and are amortized as an adjustment to interest expense over the remaining life of the Revolver Facility. Spectrum Brands recorded accelerated amortization of portions of the unamortized debt issuance costs related to the refinancing of the Prior Revolver Facility totaling $1.1 as an increase to interest expense for the three and nine months ended June 30, 2015. As a result of borrowings and payments under the Revolver Facility, at June 30, 2015, Spectrum Brands had aggregate borrowing availability of approximately $419.3, net of outstanding letters of credit of $33.2. FGL As of June 30, 2015, FGL had a borrowing base of $150.0 under their three-year unsecured revolving credit facility (the "FGL Credit Agreement") with no unfunded investment commitments. If FGL were to draw on the revolver, the interest rate would be equal to a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.5%, (b) the rate of interest determined by Royal Bank of Canada as its prime commercial lending rate for U.S. dollar loans in the U.S. for such day as the "U.S. Prime Rate", and (c) the Eurodollar rate for an interest period of one month beginning on such day (or if such day is not a business day, the business day immediately preceding such day) plus 1.00% per annum. As of June 30, 2015, the interest rate would be equal to 5.25%, had FGL drawn on the revolver. Compass As of June 30, 2015, Compass had $327.0 of outstanding indebtedness under the revolving credit agreement entered into by Compass (the "Compass Credit Agreement"). The borrowing base is redetermined semi-annually, with Compass and the lenders having the right to request interim unscheduled redeterminations in certain circumstances. The interest rate grid ranges from LIBOR plus 175 bps to 275 bps (or Alternate Base Rate ("ABR") plus 75 bps to 175 bps), depending on the percentages of drawn balances to the borrowing base as defined in the agreement. On June 30, 2015, the one month LIBOR was 0.2% which resulted in an interest rate of approximately 2.7%. Borrowings under the Compass Credit Agreement are collateralized by first lien mortgages providing a security interest of not less than 80% of the engineered value, as defined in the Compass Credit Agreement, of the oil and natural gas properties evaluated by the lenders for purposes of establishing the borrowing base. Compass is permitted to have derivative financial instruments covering no more than 100% of the forecasted production from proved developed producing reserves (as defined in the agreement) for any month during the first two years of the forthcoming five year period, 90% of the forecasted production from proved developed producing reserves for any month during the third year of the forthcoming five year period and 85% of the forecasted production from proved developed producing reserves for any month during the fourth and fifth year of the forthcoming five year period. On May 7, 2015, Compass entered into an amendment to the terms of the Compass Credit Agreement that included a) modification of the Compass' Consolidated Leverage Ratio (as defined in the Compass Credit Agreement) whereby the permitted ratio limit was increased to 5.75 to 1.0 for the periods ending June 30, 2015 and September 30, 2015, and b) an additional financial covenant added in the form of Consolidated Cash Interest Coverage Ratio (as defined in the Compass Credit Agreement), whereby as of the periods ending June 30, 2015 and September 30, 2015 the ratio of consolidated earnings before tax, interest, depreciation, depletion, amortization and exploration expenses ("EBITDAX") (as defined in the Compass Credit Agreement) to consolidated interest expense for the trailing four quarters will not be less than 3.50 to 1.0. Concurrently with such amendment, HGI Funding, a wholly-owned subsidiary of the Company, provided a guarantee of a limited portion of the debt under the Compass Credit Agreement until the date of Compass’ next borrowing base redetermination (which is scheduled to occur at the beginning of the fourth quarter of calendar 2015) and committed to make a debt or equity contribution to Compass on such date in an amount to be determined based on the amount of the borrowing base at such time, which amount shall not exceed $80.0 (plus certain interest charges on unpaid amounts under the guaranty and reimbursement of enforcement expenses), but may be less depending on the amounts outstanding under the Compass Credit Agreement at that time. As a result of these amendments to the Compass Credit Agreement, Compass returned to good standing under the covenants specified in the Compass Credit Agreement, as amended. Compass is presently current on all obligation related to the Compass Credit Agreement. The Compass Credit Agreement matures on February 14, 2018. Salus Salus acts as co-lender under some of the asset-based loans that it originates, and such loans are structured to meet the definition of a "participating interest" as defined under ASC 860-10, Transfers and Servicing. For loans originated with co-lenders that have terms that result in such a co-lender not having a qualifying "participating interest", Salus recognizes the whole, undivided loan. Salus also reflects a secured borrowing owing to the co-lender representing their share in the undivided whole loan. As of June 30, 2015, Salus had $11.2 of such secured borrowings to co-lenders outstanding related to non-qualifying "participating interests." In February 2013, September 2013 and February 2015, Salus completed a collateralized loan obligation ("CLO") securitization of up to $578.5 notional aggregate principal amount that was $463.9 at June 30, 2015. The CLO was funded with $331.1 of the asset-based loan receivables that Salus had initially originated, of which $113.4 remains taken up by unaffiliated entities. The obligations of the securitization is secured by the assets of the VIE, primarily asset-based loan receivables, and carry a variable interest rate ranging from LIBOR plus 2.25% to LIBOR plus 11.50%. During the third quarter of 2015, Salus initiated a restructuring of the CLO pursuant to a special redemption of outstanding senior debt tranches in order to reduce the CLO’s outstanding leverage and borrowing costs.

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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 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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