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Debt and Credit Facility | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Debt and Credit Facility | Debt and Credit Facility Senior Notes In May 2012, we issued $225.0 million principal amount of 8.25% unsecured senior notes due June 1, 2020 ("Senior Notes") at 100% of the principal amount. Interest expense, including amortization of deferred financing costs, relating to the Senior Notes was $18.8 million for 2015, and $19.4 million each for 2014 and 2013. A portion of the interest relating to the Senior Notes was capitalized as construction in progress. The effective interest rate of the Senior Notes is approximately 8.6% per annum, taking into account the amortization of deferred financing costs. The Senior Notes are unsecured obligations and are guaranteed by certain of our domestic subsidiaries that own virtually all of our operating assets and through which we conduct the vast majority of our business. See Note 17 for condensed guarantor and non-guarantor financial information. The indenture governing the Senior Notes places limitations on our and certain of our subsidiaries' ability to, among other things, incur liens, consolidate, merge or sell all or substantially all of our and certain of our subsidiaries' assets, incur or guarantee additional indebtedness, enter into transactions with affiliates and to make "restricted payments" (which are defined in the indenture to include certain loans, investments, dividend payments, share repurchases and prepayments, redemptions or repurchases of certain indebtedness). Certain types and amounts of restricted payments are allowed by various provisions of the indenture. In particular, the indenture provisions permit us to make restricted payments in any amount if, after giving effect to such restricted payments, our "consolidated total indebtedness" as a ratio of "EBITDA" (each term as defined in the indenture) is less than 2.00:1.00. We may redeem the Senior Notes at our option in whole or part at any time on or after June 1, 2016 at a redemption price of 104.125% of the principal amount, declining to 102.0625% of the principal amount on or after June 1, 2017 and declining further to 100% of the principal amount on or after June 1, 2018, in each case plus any accrued and unpaid interest. At any time prior to June 1, 2016, we may also redeem some or all of the Senior Notes at a redemption price equal to 100% of the principal amount, together with any accrued and unpaid interest, plus a "make-whole premium." Holders of the Senior Notes have the right to require us to repurchase the Senior Notes at a price equal to 101% of the principal amount plus any accrued and unpaid interest following a change of control. A change of control includes: (i) certain ownership changes; (ii) certain recapitalizations, mergers and dispositions; (iii) certain changes in the composition of our Board of Directors; and (iv) shareholders' approval of any plan or proposal for the liquidation or dissolution of us. We may also be required to offer to repurchase the Senior Notes at 100% of the principal amount, plus any accrued and unpaid interest, with the proceeds of certain asset sales. During 2015, we repurchased $27.2 million aggregate principal amount of our Senior Notes for 107.5% of the face value plus $0.8 million of accrued interest for a total net cash outflow of $30.0 million and a loss of $2.5 million recognized within Other (expense) income, net on our Statements of Consolidated (Loss) Income. As of December 31, 2015 and December 31, 2014, the aggregate principal amount of our Senior Notes outstanding was $197.8 million and $225.0 million, respectively. The fair value of the outstanding Senior Notes at December 31, 2015 and December 31, 2014 was approximately $207.3 million and $244.5 million, respectively. See Note 11 for information relating to the estimated fair value of the Senior Notes. Cash Convertible Senior Notes Convertible Notes. In March 2010, we issued $175.0 million principal amount of 4.5% unsecured cash convertible senior notes due April 1, 2015 ("Convertible Notes"). We accounted for the cash conversion feature of the Convertible Notes as a separate derivative instrument ("Bifurcated Conversion Feature") with the fair value on the issuance date equaling the original issuance discount for purposes of accounting for the debt component of the Convertible Notes. The effective interest rate for the term of the Convertible Notes was approximately 11%, taking into account the amortization of the original issuance discount and deferred financing costs. At December 31, 2014, the carrying amount of the Convertible Notes, net of $2.5 million of unamortized issuance discount, was $172.5 million. The following table provides additional information regarding the Convertible Notes (in millions of dollars):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Contractual coupon interest | $ | 2.0 |  |  | $ | 7.9 |  |  | $ | 7.9 |
Amortization of discount | 2.4 |  |  | 9.1 |  |  | 8.2 |
Amortization of deferred financing costs | 0.3 |  |  | 1.1 |  |  | 1.2 |
Total interest expense 1 | $ | 4.7 |  |  | $ | 18.1 |  |  | $ | 17.3 |
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1. | A portion of the interest relating to the Convertible Notes was capitalized as construction in progress.
We settled the Convertible Notes in cash on April 1, 2015. The conversion value of 154.261% of par was determined over a period of 50 consecutive trading days that ended on March 27, 2015, resulting in a total settlement amount of $273.8 million, comprised of a final coupon payment of $3.9 million, principal of $175.0 million and conversion premium of $94.9 million. Hedge Transactions. In connection with the issuance of our Convertible Notes, we purchased cash-settled call options ("Option Assets") relating to shares of our common stock that settled contemporaneously with the Convertible Notes. The Option Assets' settlement proceeds of $94.9 million equaled the Convertible Notes' conversion premium. Accordingly, the net cash outflow to settle our Convertible Notes and Option Assets on April 1, 2015 was $178.9 million. Contemporaneous with the issuance of the Convertible Notes and our purchase of the Option Assets, we sold net-share-settled warrants ("Warrants") relating to approximately 3.7 million notional shares of our common stock. During the Warrant settlement period from July 1, 2015 through December 18, 2015, we issued 1,015,185 shares of our common stock in connection with the Warrants according to the formula discussed in Note 12. In addition, we paid a de minimis amount in cash to the holders for fractional shares at the end of the settlement period. See Note 12 for additional information relating to the settlement of our Warrants. Revolving Credit Facility Our credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto ("Revolving Credit Facility") was amended and extended on December 1, 2015, with the term being extended from September 2016 to December 2020 and the commitment under the facility remaining unchanged at $300.0 million. Co-borrowers under the facility are the Company and four of our wholly-owned domestic operating subsidiaries: Kaiser Aluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC, Kaiser Aluminum Washington, LLC and Kaiser Aluminum Alexco, LLC. The Revolving Credit Facility is secured by a first priority lien on substantially all of our accounts receivable, inventory and certain other of our related assets and proceeds and our domestic operating subsidiaries as well as certain machinery and equipment. Under the Revolving Credit Facility, we are able to borrow from time to time an aggregate commitment amount equal to the lesser of $300.0 million and a borrowing base comprised of: (i) 85% of eligible accounts receivable; (ii) the lesser of (a) 75% of eligible inventory and (b) 85% of the net orderly liquidation value of eligible inventory as determined in the most recent inventory appraisal ordered by the administrative agent; and (iii) certain eligible machinery and equipment supporting up to $60.0 million of borrowing availability, reduced by certain reserves, all as specified in the Revolving Credit Facility. Up to a maximum of $20.0 million of availability under the Revolving Credit Facility may be utilized for letters of credit. Borrowings under the Revolving Credit Facility bear interest at a rate equal to either a base prime rate or LIBOR, at our option, plus, in each case, a specified variable percentage determined by reference to the then-remaining borrowing availability under the Revolving Credit Facility. The Revolving Credit Facility may, subject to certain conditions and the agreement of lenders thereunder, be increased up to $400.0 million. We had $288.1 million of borrowing availability under the Revolving Credit Facility at December 31, 2015, based on the borrowing base determination then in effect. At December 31, 2015, there were no borrowings under the Revolving Credit Facility and $7.3 million was used to support outstanding letters of credit, leaving $280.8 million of net borrowing availability. The interest rate applicable to any overnight borrowings under the Revolving Credit Facility would have been 3.75% at December 31, 2015. Amounts owed under the Revolving Credit Facility may be accelerated upon the occurrence of various events of default including, without limitation, the failure to make principal or interest payments when due and breaches of covenants, representations and warranties set forth therein. The Revolving Credit Facility places limitations on our ability and certain of our subsidiaries to, among other things, grant liens, engage in mergers, sell assets, incur debt, enter into sale and leaseback transactions, make investments, undertake transactions with affiliates, prepay certain debt, pay dividends and repurchase shares. We are allowed to prepay debt, pay dividends and repurchase shares in any amount if, after giving effect to such payment, $52.5 million or more would be available for us to borrow under the Revolving Credit Facility, or if after giving effect to such payment, $45.0 million or more would be available to us to borrow under the Revolving Credit Facility and we maintain a fixed charge coverage ratio at or above 1.15:1.0. In addition, we are required to maintain a fixed charge coverage ratio on a consolidated basis at or above 1.0:1.0 if borrowing availability under the Revolving Credit Facility is less than $30.0 million.

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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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