SNAP-ON Inc | 2013 | FY |

Note 9: Short-term and Long-term Debt

Short-term and long-term debt as of 2013 and 2012 year end consisted of the following:

 

(Amounts in millions)		2013				2012
5.85% unsecured notes due March 2014		$	100.0			$	100.0
5.50% unsecured notes due 2017			150.0				150.0
4.25% unsecured notes due 2018			250.0				250.0
6.70% unsecured notes due 2019			200.0				200.0
6.125% unsecured notes due 2021			250.0				250.0
Other debt*			22.0				25.6
			972.0				975.6
Less: notes payable and current maturities of long-term debt			(113.1)				(5.2)
Total long-term debt		$	858.9			$	970.4

 

*	Includes fair value adjustments related to interest rate swaps.

Notes payable and current maturities of long-term debt of $113.1 million as of December 28, 2013, includes $100.0 million of 5.85% unsecured notes that mature on March 1, 2014 (“the 2014 Notes”) and $13.1 million of other notes. Snap-on anticipates repaying the 2014 Notes upon maturity with available cash on hand coupled with its sources of borrowings. As of 2012 year end, the 2014 Notes were included in “Long-term debt” on the accompanying Consolidated Balance Sheets as their scheduled maturity was in excess of one year of the December 29, 2012 year-end balance sheet date. Notes payable as of 2012 year end totaled $5.2 million.

The annual maturities of Snap-on’s long-term debt and notes payable over the next five years are $113.1 million in 2014, no maturities in 2015 or 2016, $150.0 million in 2017 and $250 million in 2018.

Average notes payable outstanding were $13.4 million in 2013 and $14.1 million in 2012. The weighted-average interest rate on notes payable was 10.85% in 2013 and 6.34% in 2012. As of 2013 and 2012 year end, the weighted-average interest rate on outstanding notes payable was 12.73% and 6.36%, respectively. The higher 2013 weighted-average interest rates primarily relate to local borrowings in emerging growth markets where rates are generally higher. No commercial paper was outstanding as of 2013 or 2012 year end.

On September 27, 2013, Snap-on amended and restated its $500 million multi-currency revolving credit facility that was set to terminate on December 8, 2016, by entering into a five-year, $700 million multi-currency revolving credit facility that terminates on September 27, 2018 (the “Credit Facility”); no amounts were outstanding under the Credit Facility as of 2013 year end. Borrowings under the Credit Facility bear interest at varying rates based on Snap-on’s then-current, long-term debt ratings. The Credit Facility’s financial covenant requires that Snap-on maintain, as of each fiscal quarter end, either (i) a ratio not greater than 0.60 to 1.00 of consolidated net debt (consolidated debt net of certain cash adjustments) to the sum of such consolidated net debt plus total equity and less accumulated other comprehensive income or loss; or (ii) a ratio not greater than 3.50 to 1.00 of such consolidated net debt to earnings before interest, taxes, depreciation, amortization and certain other adjustments for the preceding four fiscal quarters then ended. As of 2013 year end, the company’s actual ratios of 0.30 and 1.33, respectively, were both within the permitted ranges set forth in this financial covenant.

Snap-on’s previous 364-day loan and servicing agreement, which allowed Snap-on to borrow up to $200 million (subject to borrowing base requirements) through the pledging of finance receivables under an asset-backed commercial paper conduit facility, expired at the end of its term on September 27, 2013, and was not renewed. At the time of its expiration, no amounts were outstanding under the loan and servicing agreement.

Snap-on’s Credit Facility and other debt agreements also contain certain usual and customary borrowing, affirmative, negative and maintenance covenants. As of 2013 year end, Snap-on was in compliance with all covenants of its Credit Facility and debt agreements.