Debt

As of December 31, 2017 and 2016, our debt balances were as follows (in millions):



	Weighted- Average Interest Rate	Maturities	As of December 31,
			2017			2016
Senior Secured Term Loan	3.83%	2021	$	339.0		$	339.0
Senior Unsecured Notes	6.25%	2022	250.0			250.0
Total debt			589.0			589.0
Unamortized Debt Discounts and Issuance Costs
Senior Secured Term Loan			(5.2		)	(6.5		)
Senior Unsecured Notes			(2.9		)	(3.5		)
Total Debt, net			580.9			579.0
Less current portion of long-term debt			39.8			—
Total long-term debt			$	541.1		$	579.0

Senior Secured Term Loan and Revolving Credit Facility

The senior secured term loan (the “Term Loan Facility”) is under a credit agreement that also includes a senior secured revolving credit facility allowing borrowings of up to $250 million, with a letter of credit sub-facility in an amount of $75 million and a swingline sub-facility in an amount of $25 million (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Senior Credit Facilities”). The Senior Credit Facilities are secured by substantially all of our assets located in the United States and a certain percentage of our foreign subsidiaries’ capital stock. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the Term Loan Facility using the interest method, resulting in an effective interest rate of 4.53% as of December 31, 2017.

The credit agreement contains an excess cash flow provision that requires a mandatory principal prepayment of our Term Loan Facility if we generate cash in excess of a defined measure of cash flow. Accordingly, we are required to prepay $40 million under this prepayment requirement as we generated Excess Cash in the year ended December 31, 2017. This prepayment is classified as “Current portion of long-term debt” in the accompanying consolidated balance sheet and will be paid in the first quarter of 2018.

Borrowings under the Term Loan Facility bear interest, at our option, at either (i) a reserve-adjusted LIBOR rate, subject to a floor of 0.75%, plus 2.75%, or (ii) a base rate, subject to a floor of 0.75%, (calculated as the greatest of (1) the prime rate, (2) the U.S. federal funds effective rate plus 0.50% or (3) the one month LIBOR Rate plus 1.00%) plus 1.75%. As of December 31, 2017, the interest rate in effect for the Term Loan Facility was 4.10%.

Borrowings under the Revolving Credit Facility will bear interest, at our option, at either (i) a reserve-adjusted LIBOR rate, plus a margin ranging between 1.75% to 2.50% per annum, depending on our consolidated total leverage ratio, or (ii) the base rate plus a margin ranging between 0.75% to 1.50% per annum, depending on our consolidated total leverage ratio. The unused portion of our Revolving Credit Facility will be subject to a commitment fee equal to (i) 0.25% per annum, when our consolidated total leverage ratio is less than 2.25 to 1.00 and (ii) 0.40% per annum, otherwise.

To the extent we remain in compliance with certain financial covenants in our credit agreement. we have the ability to access our Revolving Credit Facility. As of December 31, 2017, we had no borrowings and letters of credit of $3 million outstanding under the Revolving Credit Facility. The maturity date for the Revolving Credit Facility is October 31, 2019.

Senior Unsecured Notes

The Senior Unsecured Notes (“Notes”) will mature on October 15, 2022 and interest accrues at a rate of 6.25% per annum and is payable semi-annually in arrears on April 15 and October 15 of each year. The Notes are guaranteed, jointly and severally, by each of our domestic subsidiaries that guarantees the Senior Credit Facilities. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the credit agreement using the interest method, resulting in an effective interest rate of 6.53% as of December 31, 2017.

Debt Covenants

The senior secured term loan and the Notes are subject to similar covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to:


•	incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of our restricted subsidiaries, preferred stock;


•	pay dividends on, repurchase or make distributions in respect of our capital stock;


•	make certain investments or acquisitions;


•	sell, transfer or otherwise convey certain assets;


•	create liens;


•	enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers;


•	consolidate, merge, sell or otherwise dispose of all or substantially all of our and our subsidiaries’ assets;


•	enter into transactions with affiliates; and


•	prepay certain kinds of indebtedness.

We have the ability to divest significant assets, such as the Divestiture described in “Discontinued Operations” in Note 2. The credit agreement allows re-investment of the proceeds into the business through acquisition of another business or through capital expenditures. However, if no investments are made within a specified period of time, the proceeds are to be used to reduce amounts owed under the Senior Credit Facilities and the Notes.

Pursuant to the restrictive covenants that limit our ability to pay dividends, we have the ability to pay dividends, repurchase stock and make investments up to an “Available Amount,” as defined in the credit agreement governing the Senior Credit Facilities, provided that we are in compliance with all required covenants, there are no events of default and upon meeting certain financial ratios.

As of December 31, 2017, we were in compliance with all of our debt covenants. As of December 31, 2017, our repayment requirements in the next five years includes a mandatory prepayment of $40 million on our Term Loan facility in the first quarter of 2018, with the remainder owed under our Term Loan Facility and the $250 million Notes due on their respective maturity dates, which are October 31, 2021 and October 15, 2022.