XML 24 R14.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Long-Term Debt | 9 Months Ended
--- | ---
Sep. 30, 2017
Debt Disclosure [Abstract] |
Long-Term Debt | Note 8—Long-term debt:
| December 31, 2016 |  |  | September 30, 2017 |
| (In millions) |
Valhi: |  |  |  |  |  |  |
Snake River Sugar Company | $ | 250.0 |  |  | $ | 250.0 |
Contran credit facility |  | 278.9 |  |  |  | 284.3 |
Total Valhi debt |  | 528.9 |  |  |  | 534.3 |
Subsidiary debt: |  |  |  |  |  |  |
Kronos: |  |  |  |  |  |  |
Kronos International, Inc. 3.75% Senior Secured Notes |  | — |  |  |  | 464.2 |
Term loan |  | 335.9 |  |  |  | — |
WCS: |  |  |  |  |  |  |
Financing capital lease |  | 64.0 |  |  |  | 62.7 |
Tremont: |  |  |  |  |  |  |
Promissory note payable |  | 14.5 |  |  |  | 14.5 |
BMI: |  |  |  |  |  |  |
Bank note payable – Meadows Bank |  | 8.4 |  |  |  | — |
Bank loan – Western Alliance Bank |  | — |  |  |  | 18.7 |
LandWell: |  |  |  |  |  |  |
Note payable to the City of Henderson |  | 2.9 |  |  |  | 2.7 |
Other |  | 10.4 |  |  |  | 9.6 |
Total subsidiary debt |  | 436.1 |  |  |  | 572.4 |
Total debt |  | 965.0 |  |  |  | 1,106.7 |
Less current maturities |  | 7.8 |  |  |  | 3.9 |
Total long-term debt | $ | 957.2 |  |  | $ | 1,102.8 |
Valhi – Contran credit facility – During the first nine months of 2017, we borrowed a net $5.4 million under our Contran credit facility. The average interest rate on the existing balance as of and for the nine months ended September 30, 2017 was 5.25% and 5.03%, respectively. At September 30, 2017, the equivalent of $40.7 million was available for borrowing under this facility. Kronos – Senior Secured Notes – On September 13, 2017, Kronos International, Inc. (“KII”), Kronos’ wholly-owned subsidiary, issued €400 million aggregate principal amount of its 3.75% Senior Secured Notes due September 15, 2025 (the “Senior Notes”), at par value ($477.6 million when issued). Kronos used $338.6 million of the net proceeds of the new Senior Notes to prepay in full the outstanding principal balance of its term loan (along with accrued and unpaid interest through the prepayment date) and $21.0 million to repay the outstanding balance under its North American revolving credit facility. The remaining net proceeds of the Senior Notes are available for Kronos’ general corporate purposes. The new Senior Notes:
| • | bear interest at 3.75% per annum, payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2018;
| • | have a maturity date of September 15, 2025. Prior to September 15, 2020, Kronos may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium (as defined in the indenture governing the Senior Notes). On or after September 15, 2020, Kronos may redeem the Senior Notes at redemption prices ranging from 102.813% of the principal amount, declining to 100% on or after September 15, 2023. In addition, on or before September 15, 2020, Kronos may redeem up to 40% of the Senior Notes with the net proceeds of certain public or private equity offerings at 103.75% of the principal amount. If Kronos experiences certain specified change of control events, it would be required to make an offer to purchase the Senior Notes at 101% of the principal amount. Kronos would also be required to make an offer to purchase a specified portion of the Senior Notes at par value in the event that it generates a certain amount of net proceeds from the sale of assets outside the ordinary course of business, and such net proceeds are not otherwise used for specified purposes within a specified time period;
| • | are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Kronos Worldwide, Inc. and each of its direct and indirect domestic, wholly-owned subsidiaries;
| • | are collateralized by a first priority lien on (i) 100% of the common stock or other ownership interests of each existing and future direct domestic subsidiary of KII and the guarantors, and (ii) 65% of the voting common stock or other ownership interests and 100% of the non-voting common stock or other ownership interests of each foreign subsidiary that is directly owned by KII or any guarantor;
| • | contain a number of covenants and restrictions which, among other things, restrict Kronos’ ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of its assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of this type (however, there are no ongoing financial maintenance covenants); and
| • | contain customary default provisions, including a default under any of Kronos’ other indebtedness in excess of $50.0 million.
The carrying value of the Senior Notes at September 30, 2017 is stated net of unamortized debt issuance costs of $7.4 million. Term loan – During the first six months of 2017, Kronos made its required quarterly principal payment of $1.8 million. Concurrent with the issuance of Kronos’ Senior Notes, in September 2017, Kronos voluntarily prepaid in full the outstanding $338.6 million principal balance of its term loan (and such term loan facility was terminated). As a result of such prepayment, we recognized a loss on prepayment of debt aggregating $7.1 million in the third quarter of 2017 consisting principally of (i) the write-off of unamortized debt issuance costs and original issue discount associated with the term loan of $2.7 million and $.7 million, respectively, and (ii) a charge of $3.3 million related to the early termination of our interest rate swap contract discussed in Note 17. Funds for the aggregate prepayment were provided by the net proceeds from the Senior Notes discussed above. The average interest rate on the term loan for the year-to-date period ended September 13, 2017 (the pay-off date) was 4.1%. North American revolving credit facility – In January 2017, Kronos extended the maturity date of its North American revolving credit facility to the earlier of (i) January 30, 2022 or (ii) 90 days prior to the maturity date of our existing term loan indebtedness (or 90 days prior to the maturity date of any indebtedness incurred in a permitted refinancing of such existing term loan indebtedness). The issuance of the Senior Notes is a permitted refinancing of our term loan, and accordingly, the maturity date of the North American revolving credit facility is January 30, 2022. During the first nine months of 2017, Kronos borrowed $253.9 million and repaid $253.9 million under its North American revolving credit facility. The average interest rate on outstanding borrowings for the year-to-date period ended September 13, 2017 when the outstanding balance was repaid was 4.8% . As discussed above, in September 2017 we used a portion of the net proceeds from the Senior Notes to repay our then-outstanding principal balance of $21.0 million. At September 30, 2017, approximately $100.0 million was available for additional borrowing under this revolving credit facility. European revolving credit facility – In September 2017, Kronos amended its European revolving credit facility. The amendment extended the maturity date of the European revolving credit facility by five years to September 2022 and reduced the maximum amount Kronos may borrow under the credit facility from €120 million to €90 million. In addition, the amendment reduced the interest rate on outstanding borrowings under this credit facility from the Euro Interbank Offered Rate (EURIBOR) plus 1.90% per annum to EURIBOR plus 1.60% per annum. Kronos’ European revolving credit facility requires the maintenance of certain financial ratios, and one of such requirements is based on the ratio of net debt to last twelve months earnings before income tax, interest, depreciation and amortization expense (EBITDA) of the borrowers. Based upon the borrowers’ last twelve months EBITDA as of September 30, 2017 and the net debt to EBITDA financial test, the full €90.0 million of the credit facility ($106.1 million) is available for borrowing availability at September 30, 2017. Other – In February 2017, a wholly-owned subsidiary of BMI entered into a $20.5 million loan agreement with Western Alliance Bank. The proceeds were used to refinance the $8.5 million outstanding bank note payable to Meadows Bank and to finance improvements to BMI’s water delivery system. The agreement requires semi-annual payments of principal and interest on June 1 and December 1 aggregating $1.9 million annually beginning on June 1, 2017 through the maturity date in June 2032 (except during 2017 which calls for prorated aggregate principal and interest payments of $1.6 million). The agreement bears interest at 5.34% and is collateralized by certain real property, including the water delivery system, and revenue streams under the City of Henderson water contract. Debt issuance costs were approximately $1.0 million, and the carrying value of the banknote payable at September 30, 2017 is stated net of such unamortized debt issuance costs. Restrictions and other – Certain of the credit facilities with unrelated, third-party lenders described above require the respective borrowers to maintain minimum levels of equity, require the maintenance of certain financial ratios, limit dividends and additional indebtedness and contain other provisions and restrictive covenants customary in lending transactions of this type. We are in compliance with all of our debt covenants at September 30, 2017.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration