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Debt | 9 Months Ended
--- | ---
Sep. 30, 2016
Debt Disclosure [Abstract] |
Debt | Debt Outstanding debt at September 30, 2016 and December 31, 2015 is summarized as follows:
(in millions) |  | September 30, 2016 |  | December 31, 2015
Revolving credit facility |  | $ | 20.0 |  |  | $ | — |
Term loan A |  | — |  |  | 312.8 |
Term loan B |  | — |  |  | 119.5 |
Senior notes due 2020 |  | — |  |  | 613.1 |
Senior notes due 2022 |  | — |  |  | 299.2 |
Senior secured second lien notes due 2021 |  | 249.2 |  |  | — |
Other |  | 43.3 |  |  | 66.3 |
Deferred financing costs |  | (4.2 | ) |  | (13.3 | )
Total debt |  | 308.3 |  |  | 1,397.6 |
Short-term borrowings and current portion of long-term debt |  | (15.3 | ) |  | (67.2 | )
Long-term debt |  | $ | 293.0 |  |  | $ | 1,330.4 |
On March 3, 2016, the Company entered into a $225.0 million Asset Based Revolving Credit Facility (as amended, the "ABL Revolving Credit Facility") by and among the Company and certain of its domestic and German subsidiaries, as borrowers, the lenders party thereto, Wells Fargo Bank, N.A. as Administrative Agent, and Wells Fargo Bank N.A., JP Morgan Chase Bank, N.A. and Goldman Sachs Bank USA as Joint Lead Arrangers. The ABL Revolving Credit Facility includes a $75.0 million Letter of Credit Facility, $10.0 million of which is available to the German borrower, with a term of 5 years. Loans made under the ABL Revolving Credit Facility are subject to a borrowing base and are secured by certain inventories and fixed assets of the Company and the guarantors and are guaranteed by the material direct and indirect subsidiaries of the Company. The ABL Revolving Credit Facility contains a Fixed Charge Coverage springing financial covenant, which measures the ratio of (i) consolidated earnings before interest, taxes, depreciation, amortization and other adjustments (Adjusted EBITDA), as defined in the credit agreement, to (ii) fixed charges, as defined in the related credit agreement. The financial covenant is triggered only if the Company fails to maintain minimum levels of availability under the credit facility. If triggered, the Company must maintain a Minimum Fixed Charge Coverage Ratio of 1.00 to 1.00. The ABL Revolving Credit Facility includes customary representations and warranties, events of default and customary covenants, including without limitation: limitations on indebtedness, capital expenditures, restricted payments, disposals, investments, and acquisitions. In October 2016, the ABL Revolving Credit Facility was amended to accommodate certain previously restricted activities related to the relocation of its manufacturing operations from Manitowoc, WI to Shady Grove, PA as announced during the third quarter of 2016. Among other things, the amendment will allow the Company to transfer, sell, and/or impair fixed assets located at the Manitowoc, WI facility with limited impact on the availability under the facility. The ABL Revolving Credit Facility replaced the $1,050.0 million Third Amended and Restated Credit Agreement (the “Prior Senior Credit Facility”), which the Company entered into on January 3, 2014. The Prior Senior Credit Facility included three different loan facilities. The first was a revolving facility with a five year term in the amount of $500.0 million. The second facility was Term Loan A in the aggregate amount of $350.0 million, with a term of five years. The third facility was Term Loan B in the aggregate amount of $200.0 million, with a term of seven years. The termination of the Prior Senior Credit Facility resulted in a loss of $5.9 million related to the write-off of deferred financing expenses. As of December 31, 2015, the Company had $175.0 million notional amount of float-to-fixed interest rate swaps outstanding related to Term Loan A under the Prior Senior Credit Facility that were designated as cash flow hedges. As a result, $175.0 million of Term Loan A was hedged at an interest rate of 1.635%, plus the applicable spread based on the Consolidated Total Leverage Ratio of the Company as defined under the Prior Senior Credit Facility. Interest rate swaps were terminated concurrent with the Spin-Off resulting in a loss of $4.3 million. On February 18, 2016, the Company entered into an indenture with Wells Fargo Bank, N.A., as trust and collateral agent, and completed the sale of $260.0 million aggregate principal amount of its 12.750% Senior Secured Second Lien Notes due August 15, 2021 (the "2021 Notes"). Interest on the 2021 Notes is payable semi-annually in February and August of each year. The 2021 Notes were sold pursuant to exemptions from registration under the Securities Act of 1933. The 2021 Notes are guaranteed by certain of the Company's 100% owned domestic subsidiaries. These subsidiaries also guarantee the Company's obligations under the ABL Revolving Credit Facility together with certain of the Company's German subsidiaries. The 2021 Notes contain affirmative and negative covenants that limit, among other things, the Company's ability to redeem or repurchase its debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, repurchase capital stock, and create or become subject to liens and include customary events of default. If an event of default occurs and is continuing with respect to the 2021 Notes, then the trustee or the holders of at least 25% of the principal amount of the outstanding 2021 Notes may declare the principal and accrued interest to be due and payable immediately. In addition, in the case of an event of default arising from certain events of bankruptcy, all unpaid principal of, unamortized discount, and accrued and unpaid interest on all outstanding 2021 Notes will become due and payable immediately. The 2021 Notes are redeemable, at the Company’s option, in whole or in part from time to time, at any time prior to February 15, 2019, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued but unpaid interest to the date of redemption. In addition, the Company may redeem the 2021 Notes in whole or in part for a premium at any time on or after February 15, 2019. The following would be the principal and premium paid by the Company, expressed as percentages of the principal amount thereof, if it redeems the 2021 Notes during the periods as set forth below:
Start Date (on or after) | End Date (prior to) | Percentage
2/15/2019 | 2/15/2020 | 106.375 | %
2/15/2020 | 8/15/2020 | 103.188 | %
8/15/2020 | 8/15/2021 | 100.000 | %
In addition, at any time prior to February 15, 2019, the Company is permitted to, at its option, use the net cash proceeds of one or more public equity offerings to redeem up to 35% of the 2021 Notes at a redemption price of 112.75%, plus accrued but unpaid interest, if any, to the date of redemption; provided that (1) at least 65.0% of the principal amount of the 2021 Notes outstanding remains outstanding immediately after any such redemption; and (2) the Company makes such redemptions not more than 90 days after the consummation of any such public offering. Further, the Company is required to offer to repurchase the 2021 Notes for cash at a price of 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, upon the occurrence of a change of control triggering event. On March 3, 2016, the Company redeemed its previously outstanding 8.50% Senior Notes due 2020 (the “Prior 2020 Notes”) and 5.875% Senior Notes due 2022 (the “Prior 2022 Notes” and, together with the 2021 Notes and Prior 2020 Notes, the "Senior Notes") for $625.5 million and $330.5 million, or 104.250% and 110.167% as expressed as a percentage of the principal amount, respectively. The redemption of the Prior 2020 Notes resulted in a loss on debt extinguishment of $31.5 million during the first quarter of 2016 and consisted of $24.6 million related to the redemption premium and $6.9 million related to the write-off of deferred financing fees. Previously monetized derivative assets related to fixed-to-float interest rate swaps were treated as an increase to the debt balance of the Prior 2020 Notes and were being amortized to interest expense over the life of the original swap. As a result of the redemption, the remaining monetization balance of $11.8 million as of March 3, 2016, was amortized as a reduction to interest expense during the first quarter of 2016. The redemption of the Prior 2022 Notes resulted in a loss on debt extinguishment of $34.6 million during the first quarter of 2016 and consisted of $31.2 million related to the redemption premium and $3.4 million related to write-off of deferred financing fees. Previously, derivative liabilities related to termination of fixed-to-float swaps were treated as a decrease to the debt balance of the Prior 2022 Notes and were being amortized to interest expense over the life of the original swap. As a result of the redemption, the remaining balance of $0.7 million as of March 3, 2016 was amortized as an increase to interest expense during the first quarter of 2016. Outstanding balances under the Company's Prior Senior Credit Facility and Prior 2020 and 2022 Notes were repaid with proceeds from the 2021 Notes and a cash dividend from MFS in conjunction with the Spin-Off. As of September 30, 2016, the Company had outstanding $43.3 million of other indebtedness that has a weighted-average interest rate of approximately 5.41%. This debt includes outstanding line of credit balances and capital lease obligations. As of September 30, 2016, the Company had $20.0 million of borrowings outstanding on the ABL Revolving Credit Facility. During the quarter ended September 30, 2016, the highest daily borrowing was $29.5 million and the average borrowing was $8.1 million, while the average annual interest rate was 2.89%. The interest rate of the ABL Revolving Credit Facility fluctuates based on excess availability. As of September 30, 2016, the spreads for LIBOR and Prime borrowings were 1.50% and 0.50%, respectively, with excess availability of approximately $145.6 million, which represents revolver borrowing capacity of $182.3 million less current non pre-payable borrowings of $20.0 million and outstanding letters of credit of $16.7 million. We also had on-hand $16.0 million in money market funds as of September 30, 2016, which results in net availability under the ABL Revolving Credit Facility of $161.6 million. As of September 30, 2016, the Company had no interest rate swaps outstanding related to the 2021 Notes. The balance sheet values of the Senior Notes as of September 30, 2016 and December 31, 2015 are not equal to the face value of the Senior Notes because of original issue discounts and gains (losses) of previously terminated fixed-to-float interest rate hedges (see Note 5, "Derivative Financial Instruments" for more information), respectively, which are included in the applicable balance sheet values. Effective January 1, 2016, the Company adopted ASC No. 2015-03 and has classified its net deferred financing costs related to its 2021 Notes as a direct deduction from long-term debt versus as a deferred asset. Net deferred financing costs associated with the Company's ABL Revolving Credit Facility are classified as a deferred asset and are included with other long-term assets. As of September 30, 2016, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and the 2021 Notes. Based upon the Company's current plans and outlook, management believes the Company will be able to comply with these covenants during the subsequent twelve months.

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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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