Debt |
6 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Debt Disclosure [Abstract] | |
| Debt |
Debt
We have a credit facility allowing borrowings of up to $400 million. The arrangement terminates on March 9, 2020, at which time all outstanding borrowings must be repaid.
The credit facility permits us to make borrowings in currencies other than the United States Dollar. At March 31, 2017, we have U.S. Dollar borrowings of $115.0 million and no borrowings in other currencies.
At March 31, 2017, we held two letters of credit under the credit facility totaling $0.7 million. These letters of credit may be called by vendors in the event that the Company defaults under the terms of a contract, the probability of which we believe is remote. In addition, two letters of credit totaling $3.0 million, secured with restricted cash balances, are held with another financial institution to cover similar obligations to customers.
Our credit facility requires us to comply with certain financial covenants and other covenants including a maximum total leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with all covenants as of March 31, 2017. There are no restrictions on our dividend payments if our leverage ratio is less than 2.5:1.0. At March 31, 2017, our total leverage ratio was less than 1.0:1.0. Accordingly, we do not believe that the provisions of the credit facility represent a significant restriction on our ability to pay dividends or to the successful operation of the business.
During the six months ended March 31, 2017 and 2016, we made interest payments of $1.6 million and $1.7 million, respectively. We utilize interest swap agreements to manage our exposure against interest rate fluctuations. Approximately $34.0 million of our outstanding debt balance was covered by these instruments at March 31, 2017; all arrangements expire before the end of fiscal year 2017. Gains and losses in the fair value of these instruments are recorded in the statement of comprehensive income.
In addition to borrowings under the credit facility, we have an outstanding loan of $0.7 million (0.9 million Canadian Dollars) with the Atlantic Innovation Fund of Canada. There is no interest charge on this loan. The Atlantic Innovation Fund loan is repayable over 21 remaining quarterly installments.
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