Debt | Note 8. Debt Short-Term Debt Short-term debt consists of the following (in thousands): September 30, 2016 December 31, 2015 Current maturities of debts (excluding capital leases) $ 34,382 $ 28,528 Current maturities of capital leases 998 964 Total short-term debt $ 35,380 $ 29,492 Long-Term Debt Long-term debt consists of the following (in thousands): September 30, 2016 December 31, 2015 Term Loan Credit Facility (net of discount of $889 and $1,222 ) $ 362,861 $ 415,903 Amended Revolving Credit Facility 41,500 - Other foreign subsidiary indebtedness 35,737 30,703 Debt issue costs (6,664) (8,962) Total debt 433,434 437,644 Less: Current maturities of debts (excluding capital leases) (34,382) (28,528) Total long-term debt $ 399,052 $ 409,116 Term Loan Credit Facility On April 23, 2013, the Company entered into a Term Loan and Guaranty Agreement (the “Term Loan Credit Agreement”) by and among Tower Automotive Holdings USA, LLC (the “Term Loan Borrower”), the Company, Tower Automotive Holdings I, LLC (“Term Loan Holdco”), Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the Lenders from time to time party thereto and Citibank, N.A., as administrative agent for the Lenders (the credit facility evidenced by the Term Loan Credit Agreement and related documentation, the “Term Loan Credit Facility”). On January 31, 2014, the Company amended the Term Loan Credit Agreement by entering into the Second Refinancing Term Loan Amendment and Additional Term Loan Amendment (“Second Term Loan Amendment”), pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full and additional term loans in an aggregate principal amount of approximately $33 million (the “Additional Term Loans”) were disbursed, resulting in an increase in cash and cash equivalents. After giving effect to the disbursement of the Additional Term Loans, there were term loans (the “Term Loans”) in the aggregate principal amount of $450 million outstanding under the Term Loan Credit Agreement. The maturity date of the Term Loan Credit Facility remains April 23, 2020 and the Term Loans bear interest at (i) the Alternate Base Rate plus a margin of 2.00% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR rate by a statutory reserve rate, with a floor of 1.00% ) plus a margin of 3.00% . The Term Loan Borrower’s obligations under the Term Loan Credit Facility are guaranteed by the Company on an unsecured basis and guaranteed by Term Loan Holdco and certain of the Company's other direct and indirect domestic subsidiaries on a secured basis (the “Subsidiary Guarantors”). The Term Loan Credit Facility is secured by (i) a first priority security interest in certain assets of the Term Loan Borrower and the Subsidiary Guarantors, other than, inter alia, accounts, chattel paper, inventory, cash deposit accounts, securities accounts, machinery, equipment and real property and all contract rights, and records and proceeds relating to the foregoing and (ii) on a second priority basis to all other assets of the Term Loan Borrower and the Subsidiary Guarantor which have been pledged on a first priority basis to the agent for the benefit of the lenders under the Amended Revolving Credit Facility described below. The Term Loan Credit Agreement includes customary covenants applicable to certain of the Company’s subsidiaries and includes customary events of default and amounts due there under may be accelerated upon the occurrence of an event of default. On January 15, 2016, the Company made a $50 million voluntary repayment on its Term Loan Credit Facility. In connection with this prepayment, the Company accelerated the amortization of the original issue discount and the associated debt issue costs by $0.7 million. As of September 30, 2016, the outstanding principal balance of the Term Loan Credit Facility was $362. 9 million (net of a remaining $0.9 million original issue discount) and the effective interest rate was 4.00% per annum. Amended Revolving Credit Facility On September 17, 2014, the Company entered into a Third Amended and Restated Revolving Credit and Guaranty Agreement (“Third Amended Revolving Credit Facility Agreement”), by and among Tower Automotive Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. The Third Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Second Amended Revolving Credit Facility Agreement, dated as of June 19, 2013, by and among Tower Automotive Holdings USA, LLC (“the Borrower”), its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent. The Third Amended Revolving Credit Facility Agreement provides for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Third Amended Revolving Credit Facility Agreement also provides for the issuance of letters of credit in an aggregate amount not to exceed $50 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Third Amended Revolving Credit Facility Agreement is subject to an overall cap, on any date, of $200 million. The Company may request the issuance of Letters of Credit denominated in Dollars or Euros. The expiration date for the Amended Revolving Credit Facility is September 17, 2019 . Advances under the Amended Revolving Credit Facility bear interest at an alternate base rate plus a base rate margin or LIBOR plus a Eurodollar margin. The applicable margins are determined by the Company’s Total Net Leverage Ratio (as defined in the Third Amended Revolving Credit Facility Agreement). As of September 30, 2016, the applicable margins were 1.50% per annum and 2.50% per annum for base rate and LIBOR based borrowings, respectively, resulting in a weighted average interest rate of 3.6% . The Company will pay a commitment fee at a rate equal to 0.50% per annum on the average daily unused total revolving credit commitment. The Amended Revolving Credit Facility is guaranteed by the Company on an unsecured basis and is guaranteed by certain of the Company’s other direct and indirect domestic subsidiaries on a secured basis. The Amended Revolving Credit Facility is secured (i) by a first priority security interest in certain assets of the Borrower and the Subsidiary Guarantors, including accounts, inventory, chattel paper, cash, deposit accounts, securities accounts, machinery, equipment and real property and all contract rights, and records and proceeds relating to the foregoing and (ii) on a second priority basis to all other assets of the Borrower and the Subsidiary Guarantors. The Borrower’s and each Subsidiary Guarantor’s pledge of such assets as security for the obligations under the Amended Revolving Credit Facility is evidenced by a Revolving Credit Security Agreement dated as of September 17, 2014, among the Borrower, the guarantors party thereto, and the Agent. The Third Amended Revolving Credit Facility Agreement contains customary covenants applicable to certain of the Company’s subsidiaries and includes customary events of default and amounts due there under may be accelerated upon the occurrence of an event of default. As of September 30, 2016, there was $148.4 million of unutilized borrowing availability under the Amended Revolving Credit Facility . AT that date, there were $41.5 million of borrowings and $10.1 million of letters of credit outstanding under the Amended Revolving Credit Facility . Other Foreign Subsidiary Indebtedness As of September 30, 2016, other foreign subsidiary indebtedness of $35.7 million consisted primarily of receivables factoring in Europe of $28.5 million and other indebtedness in Europe of $7.3 million. The change in foreign subsidiary indebtedness from December 31, 2015 to September 30, 2016 is explained by the following (in thousands): Europe Balance at December 31, 2015 $ 30,704 Maturities of indebtedness (1,054) Change in borrowings on credit facilities, net 5,015 Foreign exchange impact 1,072 Balance at September 30, 2016 $ 35,737 Generally, borrowings of foreign subsidiaries are made under credit agreements with commercial lenders and are used to fund working capital and other operating requirements. As of September 30, 2016, the receivables factoring facilities balance available to the Company was $28.5 million (€ 25.3 million), of which the entire amount was drawn. These are uncommitted, demand facilities which are subject to termination at the discretion of the banks and bear interest rates based on the average three month EURIBOR plus a spread ranging from 2.50% to 3.00% . The effective annual interest rates as of September 30, 2016 ranged from 2.20% to 2.70% , with a weighted average interest rate of 2.49% per annum. Any receivables factoring under these facilities is with recourse and is secured by the accounts receivable factored. These receivables factoring transactions are recorded in the Company’s Condensed Consolidated Balance Sheets in short-term debt and current maturities of capital lease obligations. As of September 30, 2016, the secured line of credit balance available to the Company was $9.4 million (€ 8.4 million) , of which no borrowings were outstanding . The facility bears an interest rate based on the EURIBOR plus a spread of 2.15% and has a maturity date of October 2016 . The effective annual interest rate as of September 30, 2016 was 1.78% per annum. The facilities are secured by certain accounts receivable related to customer funded tooling, real estate, and other assets, and are subject to negotiated prepayments upon the receipt of funds from completed customer projects. As of September 30, 2016, the Company’s European subsidiaries had borrowings of $7.3 million (€ 6.5 million), which had an annual interest rate of 6.25% and a maturity date of November 2017 . This term loan is secured by certain machinery and equipment. As of September 30, 2016, the Company’s European subsidiaries had an asset-based revolving credit facility balance available to the Company of $32.7 million, of which no borrowings were outstanding. This facility bears an interest rate based upon the one month LIBOR plus a spread of 4.00% and has a maturity date of October 2017 . Availability on the credit facility is determined based upon the appraised value of certain machinery, equipment, and real estate, subject to a borrowing base availability limitation and customary covenants. Covenants As of September 30, 2016, the Company was in compliance with the financial covenants that govern its credit agreements. Capital Leases The Company had the following capital lease obligations as of the dates presented (in thousands). These capital lease obligations expire in March 2018: September 30, 2016 December 31, 2015 Current maturities of capital leases $ 998 $ 964 Non-current maturities of capital leases 5,445 5,984 Total capital leases $ 6,443 $ 6,948 Debt Issue Costs The Company had debt issuance costs, net of amortization, of $6.7 million and $9 .0 million as of September 30, 2016 and December 31, 2015, respectively. These amounts are reflected in the Condensed Consolidated Balance Sheets as a direct deduction from long-term debt, net of current maturities, rather than as an asset, in accordance with ASU No. 2015-03. The Company incurred interest expense related to the amortization of debt issue costs of $0.5 million and $2.0 million during the three and nine months ended September 30, 2016, respectively. The Company incurred interest expense related to the amortization of debt issue costs of $0.5 million and $1.9 million during the three and nine months ended September 30, 2015, respectively. |