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Debt | 9 Months Ended
--- | ---
Jun. 30, 2017
Debt Disclosure [Abstract] |
Debt | The Company’s consolidated debt consists of the following:
|  | June 30, 2017 |  | September 30, 2016 |  |
|  | Amount |  | Rate |  | Amount |  | Rate |  | Interest rate
HRG |  |  |  |  |  |  |  |  |  |
7.875% Senior Secured Notes, due July 15, 2019 |  | $ | 864.4 |  |  | 7.9 | % |  | $ | 864.4 |  |  | 7.9 | % |  | Fixed rate
7.75% Senior Unsecured Notes, due January 15, 2022 |  | 890.0 |  |  | 7.8 | % |  | 890.0 |  |  | 7.8 | % |  | Fixed rate
2017 Loan, due July 13, 2018 |  | 50.0 |  |  | 3.5 | % |  | — |  |  | — | % |  | Variable rate, see below
Spectrum Brands |  |  |  |  |  |  |  |  |  |
USD Term Loan, due June 23, 2022 |  | 1,247.3 |  |  | 3.2 | % |  | 1,005.5 |  |  | 3.6 | % |  | Variable rate, see below
CAD Term Loan, due June 23, 2022 |  | 56.5 |  |  | 4.5 | % |  | 54.9 |  |  | 4.6 | % |  | Variable rate, see below
Euro Term Loan, due June 23, 2022 |  | — |  |  | — | % |  | 63.0 |  |  | 3.5 | % |  | Variable rate, see below
6.375% Notes, due November 15, 2020 |  | — |  |  | — | % |  | 129.7 |  |  | 6.4 | % |  | Fixed rate
6.625% Notes, due November 15, 2022 |  | 570.0 |  |  | 6.6 | % |  | 570.0 |  |  | 6.6 | % |  | Fixed rate
6.125% Notes, due December 15, 2024 |  | 250.0 |  |  | 6.1 | % |  | 250.0 |  |  | 6.1 | % |  | Fixed rate
5.75% Notes, due July 15, 2025 |  | 1,000.0 |  |  | 5.8 | % |  | 1,000.0 |  |  | 5.8 | % |  | Fixed rate
4.00% Notes, due October 1, 2026 |  | 486.3 |  |  | 4.0 | % |  | 477.0 |  |  | 4.0 | % |  | Fixed rate
Revolver Facility, expiring March 6, 2022 |  | 293.0 |  |  | 3.1 | % |  | — |  |  | — | % |  | Variable rate, see below
Other notes and obligations |  | 15.5 |  |  | 10.2 | % |  | 16.8 |  |  | 9.8 | % |  | Variable rate
Obligations under capital leases |  | 240.8 |  |  | 5.7 | % |  | 114.7 |  |  | 5.5 | % |  | Various
HGI Energy |  |  |  |  |  |  |  |  |  |
HGI Energy Notes, due June 30, 2018* |  | 92.0 |  |  | 0.7 | % |  | 92.0 |  |  | 0.7 | % |  | Fixed rate
Salus |  |  |  |  |  |  |  |  |  |
Unaffiliated long-term debt of consolidated variable-interest entity |  | 28.9 |  |  | — | % |  | 39.7 |  |  | — | % |  | Variable rate, see below
Long-term debt of consolidated variable-interest entity with FGL* |  | 48.1 |  |  | — | % |  | 65.9 |  |  | — | % |  | Variable rate, see below
Unaffiliated secured borrowings under non-qualifying loan participations |  | 0.8 |  |  | — | % |  | 2.0 |  |  | — | % |  | Fixed rate
Total |  | 6,133.6 |  |  |  |  | 5,635.6 |  |  |  |  |
Original issuance discounts on debt, net of premiums |  | (21.3 | ) |  |  |  | (22.8 | ) |  |  |  |
Unamortized debt issue costs |  | (79.8 | ) |  |  |  | (87.0 | ) |  |  |  |
Total debt |  | 6,032.5 |  |  |  |  | 5,525.8 |  |  |  |  |
Less current maturities and short-term debt |  | 125.9 |  |  |  |  | 166.0 |  |  |  |  |
Non-current portion of debt |  | $ | 5,906.6 |  |  |  |  | $ | 5,359.8 |  |  |  |  |
* The debt balances included in the accompanying Condensed Consolidated Balance Sheets and in the table above reflect transactions between the businesses held for sale and businesses held for use that are expected to continue to exist after the completion of any disposition resulting from the FGL Merger and Front Street Sale. Such transactions are not eliminated in the accompanying Condensed Consolidated Financial Statements in order to appropriately reflect the continuing operations and balances held for sale. HRG On January 13, 2017, the Company, through its wholly-owned subsidiaries, entered into the 2017 loan agreement, pursuant to which it may borrow up to an aggregate amount of $150.0 (the “2017 Loan”). The 2017 Loan bears interest at an adjusted International Exchange London Interbank Offered Rate (“LIBOR”), plus 2.35% per annum, payable quarterly and a commitment fee of 75 bps. The 2017 Loan matures on July 13, 2018, with an option for early termination by the borrower. At June 30, 2017, the 2017 Loan was secured by approximately $525.2 worth of marketable securities owned by a subsidiary of HGI Funding. The Company incurred $1.1 of financing costs in connection with the 2017 Loan. As of June 30, 2017, the Company had drawn $50.0 under the 2017 Loan. The 2017 Loan contains a customary mandatory prepayment clause, which requires the borrower to pay back any amounts borrowed under the 2017 Loan if certain events occur, including, but not limited to, a breach of the terms of the agreement by the borrower, a change of control of the borrower or the issuer of the pledged securities or a delisting of the pledged securities. Spectrum Brands Interest terms On October 6, 2016, Spectrum Brands entered into the first amendment to the credit agreement under its term loans and the revolving credit facility (the “Revolver Facility”, collectively the “Credit Agreement”) reducing the interest rate margins applicable to the U.S. dollar denominated term loan facility (the “USD Term Loan”) to either adjusted LIBOR, subject to a 0.75% floor, plus margin of 2.50% per annum, or base rate with a 1.75% floor plus margin of 1.50% per annum. Spectrum Brands recognized $1.0 of costs in connection with amending the Credit Agreement that has been recognized as interest expense. On March 6, 2017, Spectrum Brands entered into a second amendment to the Credit Agreement expanding the overall capacity of the Revolver Facility to $700.0, reducing the interest rate margin to either adjusted LIBOR plus margin ranging from 1.75% to 2.25%, or base rate plus margin ranging from 0.75% to 1.25%, reducing the commitment fee to 35 bps and extending the maturity to March 2022. Spectrum Brands recognized $2.6 of costs in connection with amending the cash revolver that has been deferred as debt issuance costs. On April 7, 2017, Spectrum Brands entered into a third amendment to the Credit Agreement reducing the interest rate margins applicable to the USD Term Loans to either adjusted LIBOR plus margin of 2.00% per annum, or base rate plus margin of 1.00%. Spectrum Brands recognized $0.6 of costs in connection with amending the Credit Agreement that has been recognized as interest expense. On May 16, 2017, Spectrum Brands entered into a fourth amendment to the Credit Agreement increasing its USD Term Loan by $250.0 of incremental borrowings and removing the floor which both LIBOR and base rates were subject to. Spectrum Brands recognized $2.7 as costs in connection with the increased borrowing that has been deferred as debt issuance costs. On May 24, 2017, Spectrum Brands extinguished its Euro denominated term loan facility (the “Euro Term Loan”) and recognized non-cash interest expense of $0.6 for previously deferred debt issuance costs in connection with the extinguishment. Subsequent to the amendments to the Credit Agreement discussed above, Spectrum Brands’ term loans and Revolver Facility are subject to the following variable interest rates: (i) the USD Term Loan is subject to either adjusted LIBOR, plus margin of 2.00% per annum, or base rate plus margin of 1.00% per annum; (ii) the CAD denominated term loan facility (the “CAD Term Loan”) is subject to either Canadian Dollar Offered Rate, subject to a 0.75% floor plus 3.50% per annum, or base rate with a 1.75% floor plus 2.50% per annum; (iii) the Euro Term Loan was subject to Euro Interbank Offered Rate, subject to a 0.75% floor plus 2.75% per annum; and (iv) the Revolver Facility is subject to either adjusted LIBOR plus margin ranging from 1.75% to 2.25% per annum or base rate plus margin ranging from 0.75% to 1.25% per annum. As a result of borrowings and payments under the Revolver Facility, at June 30, 2017, Spectrum Brands had borrowing availability of $385.4, net outstanding letters of credit of $20.1 and a $1.5 amount allocated to a foreign subsidiary. The Credit Agreement, solely with respect to the Revolver Facility, contains a financial covenant test on the last day of each fiscal quarter on the maximum total leverage ratio. This is calculated as the ratio of (i) the principal amount of third party debt for borrowed money (including unreimbursed letter of credit drawings), capital leases and purchase money debt, at period-end, less cash and cash equivalents, to (ii) adjusted earnings before interest, taxes, depreciation and amortization for the trailing twelve months. The maximum total leverage ratio should be no greater than 6.0 to 1.0. As of June 30, 2017, Spectrum Brands was in compliance with all covenants under the Credit Agreement and the indentures governing the 6.625% Notes due November 15, 2022, the 6.125% Notes due December 15, 2024, the 5.75% Notes due July 15, 2025 and the 4.00% Notes. On October 20, 2016, Spectrum Brands redeemed the remaining outstanding aggregate principal on the 6.375% Notes due 2020 (the “6.375% Notes”) of $129.7 with a make whole premium of $4.6 recognized as interest expense for the nine months ended June 30, 2017 in connection with the issuance of the €425.0 aggregate principal amount of 4.00% Notes and repurchase of the 6.375% Notes. Spectrum Brands recognized $1.9 in non-cash interest expense for previously deferred debt issuance costs associated with the 6.375% Notes. HGI Energy In February 2013, HGI Energy entered into note purchase agreements with FGL and Front Street for $100.0 notional aggregate principal amount due February 14, 2021 (the “HGI Energy Notes”). During the fourth quarter of the fiscal year ended September 30, 2016, the HGI Energy Notes was canceled and replaced with $92.0 notional aggregate amount of new notes of HGI Energy which were then transferred from FGL to a reinsurance funds withheld account, for which Front Street bears the economic risk. On May 8, 2017, the HGI Energy Notes were amended to (i) extend the stated maturity date to the earlier of (x) June 30, 2018 and (y) five business days following the date of any occurrence of acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group, other than HRG or its subsidiaries, of common stock representing more than 50.0% of FGL’s issued an outstanding common stock; and (ii) increase the rate of interest paid by the HGI Energy Notes from 0.7% to 1.5%, effective August 22, 2017. Salus 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. At June 30, 2017 and September 30, 2016, the outstanding notional aggregate principal amount of $28.9 and $39.7, respectively, was taken up by unaffiliated entities and consisted entirely of subordinated debt in both periods, and $48.1 and $65.9, respectively, was taken up by FGL and included in “Assets of business held for sale” in the accompanying Condensed Consolidated Balance Sheets. The obligations of the securitization is secured by the assets of the Variable Interest Entity, primarily asset-based loan receivables and carry residual interest subject to maintenance of certain covenants. Due to losses incurred in the CLO, at June 30, 2017 and September 30, 2016, the CLO was not accruing interest on the subordinated 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://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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