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Debt | 12 Months Ended
--- | ---
Dec. 31, 2015
Debt Disclosure [Abstract] |
Debt | Debt Total debt, net of debt issuance costs, is summarized in the following table ($ in millions):
| December 31, 2015 |  | December 31, 2014
Term Loan A-1 | $ | 60.0 |  |  | $ | — |
Term Loan A-2 | 249.4 |  |  | — |
Revolving Credit Agreement - U.S. dollar borrowings | 197.0 |  |  | 354.0 |
Revolving Credit Agreement - euro borrowings | 62.4 |  |  | 71.1 |
French Employee Profit Sharing | 11.4 |  |  | 14.6 |
Bank Overdrafts | — |  |  | 0.4 |
Total Debt | 580.2 |  |  | 440.1 |
Less: Debt issuance costs | (8.7 | ) |  | (2.2 | )
Less: Current debt | (3.3 | ) |  | (2.3 | )
Long-Term Debt | $ | 568.2 |  |  | $ | 435.6 |
Credit Agreement On October 28, 2015 Schweitzer-Mauduit International, Inc. entered into a Second Amended and Restated Credit Agreement, or the Amended Credit Agreement, with JPMorgan Chase Bank, N.A., as administrative agent, providing for credit facilities in the aggregate principal amount of $1 billion, consisting of a $650 million revolving credit facility, or Revolving Credit Facility available to the Company; a $100 million Term Loan A-1 (“Term Loan A-1”) made to the Company; and a $250 million Term Loan A-2 (“Term Loan A-2” and, together with Term Loan A-1, the “Term Loans”) made to the Company. The Revolving Credit Facility matures on October 28, 2020. The Term Loan A-1 amortizes at the rate of 5.0% for the first two years, at the rate of 10.0% for the final three years and matures on October 28, 2020. The Term Loan A-2 amortizes at the rate of 1.0% per year and matures on October 28, 2022. The Term Loans are generally subject to mandatory repayment out of the net cash proceeds of asset sales which are not reinvested in operating assets. The credit facilities are secured by substantially all of the personal property of the Company and its domestic subsidiaries. In December 2015, the Company prepaid the full amount of amortization for Term Loan A-1, which totaled $40 million. The Amended Credit Agreement amends and restates the Company’s Amended and Restated Credit Agreement, dated as of December 11, 2013, which provided for a $500.0 million unsecured revolving credit facility which was scheduled to mature on December 11, 2018. The interest rate margins applicable to the Revolving Credit Facility and the Term Loans under the Amended Credit Agreement will be based on a fluctuating rate of interest measured by reference to either, at the Company's option, (i) a base rate, plus an applicable margin, which ranges from 0.25% to 1.25%, in the case of the Revolving Credit Facility and Term Loan A-1, and from 0.50% to 1.50%, in the case of Term Loan A-2, or (ii) an adjusted London interbank offered rate (adjusted for maximum reserves) (“LIBOR”), plus an applicable margin, which ranges from 1.25% to 2.25%, in the case of the Revolving Credit Facility and Term Loan A-1, and from 1.50% to 2.50%, in the case of Term Loan A-2. The applicable margin, in each case, will be adjusted from time to time based on the Company's ratio of net debt to EBITDA as defined by the Amended Credit Agreement. As of December 31, 2015, the applicable interest rate on Amended Credit Agreement borrowings was 2.36% on US Revolving Credit Facility borrowings, 2.00% on Euro Revolving Credit Facility borrowings, 2.31% on Term Loan A-1 borrowings and 2.69% on Term Loan A-2 borrowings. The Amended Credit Agreement also contains representations and warranties which are customary for facilities of this type and covenants and provisions that, among other things, require the Company to maintain (a) a maximum net debt to EBITDA ratio of 3.50, reducing to 3.00 after September 30, 2016 and (b) minimum interest coverage of 3.00. The Amended Credit Agreement contains provisions allowing the Company to increase the leverage ratio upon the occurrence of a material acquisition or the occurrence of unsecured indebtedness. The Company was in compliance with all of its covenants under the Credit Agreement at December 31, 2015. Previously, in December 2013, the Company amended and restated its unsecured revolving credit facility, or Credit Agreement. The five-year revolving Credit Agreement provided for borrowing capacity of $500.0 million in either U.S. Dollars or a $300.0 million equivalent sublimit in euros with an option to increase borrowing capacity by $200 million. The Credit Agreement contained representations and warranties which are customary for facilities of this type and covenants and provisions that, among other things, required the Company to maintain (a) a maximum net debt to EBITDA ratio of 3.00 and (b) a minimum interest coverage ratio of 3.50. The Company was in compliance with all of its covenants under the Credit Agreement at December 31, 2014. Under the Credit Agreement, interest rates were based on the London Interbank Offered Rate plus an applicable margin that varies from 1.25% to 2.00% depending on the Net Debt to EBITDA Ratio, as defined in the Credit Agreement. The Company incurred commitment fees at an annual rate of 0.20% to 0.30% of the applicable margin on the committed amounts not drawn, depending on the Net Debt to EBITDA Ratio. As of December 31, 2014, the applicable interest rate on Credit Agreement borrowings was 1.48% on US Dollar borrowings and 1.55% on Euro borrowings. The balance of the facility was due upon maturity in December 2018. French Employee Profit Sharing At both December 31, 2015 and 2014, long-term debt other than the Amended Credit Agreement primarily consisted of obligations of the French operations related to government-mandated profit sharing. Each year, representatives of the workers at each of the French businesses can make an election for the profit sharing amounts from the most recent year ended to be invested in a financial institution or with their respective employer. To the extent that funds are invested with the Company, these amounts bear interest at 1.08% and 2.28% at December 31, 2015 and 2014, respectively, and are generally payable in the fifth year subsequent to the year the profit sharing is accrued. Bank Overdrafts The Company also had bank overdraft facilities of $28.9 million and $30.8 million, at December 31, 2015 and 2014, respectively, of which $0 and $0.4 million were outstanding at December 31, 2015 and 2014, respectively, and reported as current debt on the consolidated balance sheet. Interest is incurred on outstanding amounts at market rates and was 0.30% and 0.55%, respectively, at December 31, 2015 and 2014. No commitment fees are paid on the unused portion of these facilities. Rate Swap Agreement The Company maintained a forward interest rate swap agreement on a portion of its long-term debt as of December 31, 2015 that will fix the LIBOR rate on $50.0 million of the Company's variable-rate long-term debt as of October 2014 at a predetermined rate plus a credit spread through the end of October 2018. The impact of swap agreements on the consolidated financial statements was not material for the years ended December 31, 2015 and 2014. See Note 13. Derivatives for more information. Principal Repayments Under the Amended Credit Agreement, the Company selects an "interest period" for each of its borrowings from the Revolving Credit Facility. The Company can repay such borrowings and borrow again at a subsequent date if it chooses to do so, providing it flexibility and efficient use of any excess cash. The Company expects to continue to file notices of continuation related to its borrowings outstanding at December 31, 2015 such that those amounts are not expected to be repaid prior to the December 2020 expiration of the Revolving Credit Facility. Following are the expected maturities for the Company's debt obligations as of December 31, 2015 ($ in millions):
2016 | $ | 5.0 |
2017 | 4.9 |
2018 | 5.4 |
2019 | 5.1 |
2020 | 322.9 |
Thereafter | 236.9 |
Total | $ | 580.2 |
Fair Value of Debt At December 31, 2015 and 2014, the estimated fair values of the Company's current and long-term debt approximated the respective carrying amounts since the interest rates were variable and based on current market indices. Debt Issuance Costs In conjunction with the Amended Credit Agreement, the Company capitalized approximately $7.4 million in deferred debt issuance costs associated with the new facility which will be amortized over the term of the related debt instrument. As of December 31, 2015 and 2014, the Company's total deferred debt issuance costs totaled $8.7 million and $2.2 million, respectively. In conjunction with the Company's adoption of ASU 2015-03, the deferred debt issuance costs have been reclassified from Other Assets to Current Debt and Long-term Debt in the accompanying Consolidated Balance Sheet for all periods presented. Amortization expense of $0.9 million and $0.6 million was recorded during the years ended December 31, 2015 and 2014, respectively, and has been included as a component of Interest Expense in the accompanying Consolidated Statements of Income. Following is the expected future amortization of the Company's deferred debt issuance costs as of December 31, 2015 ($ in millions):
2016 | $ | 1.7 |
2017 | 1.7 |
2018 | 1.7 |
2019 | 1.7 |
2020 | 1.4 |
Thereafter | 0.5 |
Total | $ | 8.7 |

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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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