Quarterly report pursuant to Section 13 or 15(d)

Long-term Debt

v3.8.0.1
Long-term Debt
 9 Months Ended
Sep. 30, 2017
Debt Disclosure [Abstract]  
Long-term Debt
Long-term Debt:
The summary of long-term debt is as follows:
 
September 30, 2017
 
December 31, 2016
Term Loan Facility (U.S. dollar denominated)
$
918,473

 
$
925,430

Term Loan Facility (Euro denominated)
331,368

 
297,317

6.75% Senior Secured Notes due 2022
625,000

 
625,000

Floating Rate Senior Unsecured Notes due 2022
525,000

 
525,000

8.5% Senior Notes due 2022
200,000

 
200,000

ABL Facility
35,000

 
—

Other
68,207

 
45,223

Total debt
2,703,048

 
2,617,970

Original issue discount
(26,470
)
 
(28,497
)
Deferred financing costs
(24,842
)
 
(27,275
)
Total debt, net of original issue discount and deferred financing costs
2,651,736

 
2,562,198

Less: current portion
(54,255
)
 
(14,481
)
Total long-term debt
$
2,597,481

 
$
2,547,717


The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction. As of September 30, 2017 and December 31, 2016, the fair value of the senior secured term loans and senior secured and unsecured notes was higher than book value by $69,936 and $68,477, respectively. The fair value of the senior secured term loans and senior secured and unsecured notes was derived from published loan prices as of September 30, 2017 and December 31, 2016, as applicable. The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 3 to these condensed consolidated financial statements for further information on fair value measurements).
New Markets Tax Credit Financing
On June 22, 2017, the Company’s subsidiary, Potters Industries, LLC (“Potters”), entered into a New Markets Tax Credit (“NMTC”) financing arrangement with U.S. Bank N.A. (“USB”), one of USB’s affiliates (“USB Investment Fund”) and Business Conduit No. 28, LLC, an affiliate of Community Reinvestment Fund, Inc. (“CRF”). USB contributed $3,054 to USB Investment Fund, and Potters Leveraged Lender LLC, an indirect subsidiary of the Company, lent USB Investment Fund $6,221. USB Investment Fund then contributed $9,000 to CRF, which in turn lent $8,820 to Potters pursuant to a credit agreement (the “June 2017 NMTC Agreement”). Potters used the $8,820 in proceeds to acquire equipment for the expansion of Potters’ manufacturing facility in Paris, Texas. The June 2017 NMTC Agreement provides the Company with certain monetary benefits as an offset to specifically identified capital expenditures. The June 2017 NMTC Agreement requires that certain commitments and covenants are maintained over a period of seven years in order to legally recognize the benefit. The $8,820 was outstanding as of September 30, 2017. The capital expenditures associated with the June 2017 NMTC Agreement are expected to be completed in 2017.
In connection with the June 2017 NMTC Agreement, the Company provided an indemnification related to its actions or inactions which cause either a NMTC disallowance or recapture event. In the event that the Company causes either a recapture or disallowance of the tax credits expected to be generated under this program, then the Company will be required to repay the disallowed or recaptured tax credits plus an amount sufficient to pay the taxes on such repayment to the counterparty of the agreement. This indemnification covers the Company’s actions and inactions prior to June 22, 2024. The maximum potential amount of future payments under this indemnification is approximately $3,682. The Company currently believes that the likelihood of a required payment under this indemnification is remote.
Term Loans Repricing
On August 7, 2017, the Company re-priced the existing $927,750 U.S. dollar-denominated tranche and the existing €283,338 Euro-denominated tranche of its term loans to reduce the applicable interest rates. The terms of the facilities are substantially consistent following the re-pricing, except that borrowings under the term loans bear interest at a rate equal to the LIBOR rate plus a margin of 3.25% with respect to U.S. dollar-denominated LIBOR rate loans, and the EURIBOR rate plus a margin of 3.25% with respect to Euro-denominated EURIBOR rate loans. In addition, the LIBOR rate elected under the facilities is subject to a floor of 0% and the EURIBOR rate elected under the facilities is subject to a floor of 0.75%.
Senior Unsecured Notes Partial Repayment
Subsequent to September 30, 2017 and in conjunction with the Company’s IPO, on October 3, 2017, the Company repaid $446,208, in aggregate principal of the $525,000 of PQ Corporation’s Floating Rate Senior Unsecured Notes due 2022 using the proceeds from the IPO. In connection with the repayment, the Company also paid accrued interest of $2,693 and applicable redemption premiums of $32,284.