Tecumseh Products 2014 Annual Report Download - page 55

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December 31,
(in millions) 2014 2013
Weighted Avg.
Int. Rate
Weighted Avg.
Int. Rate
Short-term borrowings
Lines of credit $ 21.3 $ 33.9
Revolving credit facility 0.3 8.0
Capital lease obligations 0.5 —
Other debt 0.6 0.4
Current maturities of long-term debt 6.7 7.4
Total short-term borrowings $ 29.4 11.3% $ 49.7 8.7%
Long-term borrowings
Lines of credit $ 16.5 $ 7.1
Term Loan 8.3 15.0
Capital lease obligations 0.6 1.8
Other debt 1.1 1.0
Less: Current maturities of long-term debt (6.7)(7.4)
Total long-term debt borrowings $ 19.8 4.9% $ 17.5 4.4%
We have a Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”). Subject to the terms and
conditions of the agreement as amended, PNC agreed to provide senior secured revolving credit financing up to an aggregate
principal amount of $34.0 million, which includes up to $10.0 million in letters of credit subject to a borrowing base formula,
lender reserves and PNC’s reasonable discretion. With the 2013 amendment, PNC also provided a senior secured term loan up
to an aggregate principal amount of $15.0 million. The loans under the facilities bear interest at either LIBOR or an alternative
base rate, plus a margin that varies with borrowing availability under the revolving credit facility. The maturity of these
facilities has been extended to December 11, 2018.
During the first quarter of 2014, we entered into an amendment to our Revolving Credit and Security Agreement with PNC,
pursuant to which all closing conditions which existed at the end of 2013 related to the 2013 amendment were deemed met and
we agreed to use a portion of those proceeds to prepay the Term Loan because of a shortfall in the margin value of the
collateral. As a result, we reclassified the remaining proceeds from "Restricted cash and cash equivalents" to "Cash and cash
equivalents" on our Consolidated Balance Sheets.
We paid $0.4 million in fees associated with the amendments. We had a remaining balance of $0.1 million in fees associated
with the original agreement in 2011, which were capitalized and will now be amortized over the new five year term of the
amended agreement. We must also pay a facility fee of 0.375% a year on the unused portion of the facility. The facility is
guaranteed by Tecumseh Products Company and its U.S. and Canadian subsidiaries and is secured by substantially all of the
assets of the borrowers.
The PNC agreement contains various covenants, including limitations on dividends, investments and additional indebtedness
and liens, and a minimum fixed charge coverage ratio, which would apply only if average undrawn borrowing availability, as
defined by the credit agreement, were to fall below a specified level for more than five business days. We had $0.4 million of
additional borrowing capacity under this facility as of December 31, 2014, after giving effect to our fixed charge coverage ratio
covenant and our outstanding borrowings and letters of credit under this facility. We were in compliance with all covenants and
terms of the agreement at December 31, 2014.
At December 31, 2014, our borrowings under the PNC revolving facility totaled $0.3 million and borrowings under the PNC
term loan were $8.3 million. In addition, we had $6.4 million in outstanding letters of credit.
In April 2013, we signed a loan agreement with the Mississippi Development Authority ("MDA") for draws up to $1.5 million
at an interest rate of 2.25% and with a maturity date of February 2021. Draws under the agreement are permitted for purchases
of certain equipment at our Tupelo, Mississippi location. We received the final draw in the second quarter of 2014. Fixed
principal and interest payments started on the loan in the first quarter of 2014 and as of December 31, 2014 we had an
outstanding balance of $1.3 million.
In the U.S., we have $0.3 million outstanding in short term borrowings related to financing some of our insurance premiums
and $0.4 million outstanding in long term borrowings related to software financing.
We have various borrowing arrangements at our foreign subsidiaries to support working capital needs and government
sponsored borrowings which provide advantageous lending rates.