10-K FY 2022 FINAL MOOG Inc - Flipbook - Page 36
Table of Contents
CAPITAL STRUCTURE AND RESOURCES
We maintain bank credit facilities to fund our short and long-term capital requirements, including acquisitions. From
time to time, we also sell debt and equity securities to fund acquisitions or take advantage of favorable market
conditions.
Our U.S. revolving credit facility, which matures on October 15, 2024, has a capacity of $1.1 billion and also provides
an expansion option, which permits us to request an increase of up to $400 million to the credit facility upon
satisfaction of certain conditions. The U.S. revolving credit facility had an outstanding balance of $321 million at
October 1, 2022. The weighted-average interest rate on the majority of the outstanding credit facility borrowings was
4.16% and is principally based on LIBOR plus the applicable margin, which was 1.5% at October 1, 2022. The credit
facility is secured by substantially all of our U.S. assets. See Note 24 - Subsequent Events, for information related to
the amended and restated U.S. revolving credit facility.
The U.S. revolving credit facility contains various covenants. The minimum for the interest coverage ratio, defined as
the ratio of EBITDA to interest expense for the most recent four quarters, is 3.0. The maximum for the leverage ratio,
defined as the ratio of net debt to EBITDA for the most recent four quarters, is 4.0. We are in compliance with all
covenants. EBITDA is defined in the loan agreement as (i) the sum of net income, interest expense, income taxes,
depreciation expense, amortization expense, other non-cash items reducing consolidated net income and non-cash
equity-based compensation expenses minus (ii) other non-cash items increasing consolidated net income.
We are generally not required to obtain the consent of lenders of the U.S. revolving credit facility before raising
significant additional debt financing; however, certain limitations and conditions may apply that would require consent
to be obtained. In recent years, we have demonstrated our ability to secure consents to access debt markets. We
have also been successful in accessing equity markets from time to time. We believe that we will be able to obtain
additional debt or equity financing as needed.
The SECT has a revolving credit facility with a borrowing capacity of $35 million, maturing on July 26, 2024. Interest
was 5.16% as of October 1, 2022 and is based on LIBOR plus a margin of 2.13%. As of October 1, 2022, there were
$20 million of outstanding borrowings.
We have $500 million aggregate principal amount of 4.25% senior notes due December 15, 2027 with interest paid
semiannually on June 15 and December 15 of each year, which commenced on June 15, 2020. The senior notes are
unsecured obligations, guaranteed on a senior unsecured basis by certain subsidiaries and contain normal
incurrence-based covenants and limitations such as the ability to incur additional indebtedness, pay dividends, make
other restricted payments and investments, create liens and certain corporate acts such as mergers and
consolidations. We are in compliance with all covenants. The aggregate net proceeds were used to repay
indebtedness under our U.S. bank facility, thereby increasing the unused portion of our U.S. revolving credit facility.
On November 4, 2021, we amended and restated our Receivables Purchase Agreement, which matures on
November 4, 2024, allowing the Receivables Subsidiary to sell receivables to the Purchasers in amounts up to a $100
million limit so long as certain conditions are satisfied. The receivables are sold to the Purchasers in consideration for
the Purchasers making payments of cash. As of October 1, 2022, the amount sold to the Purchasers and
derecognized was $100 million. Each Purchaser’s share of capital accrues yield at a variable rate plus an applicable
margin, which totaled 4.04% as of October 1, 2022.
Previously, we securitized certain trade receivables that were accounted for as secured borrowings (the
"Securitization Program"). The Securitization Program was extended on October 29, 2021 and matured on
December 29, 2021, providing up to $80 million of borrowing capacity and lowered our cost to borrow funds as
compared to the U.S. revolving credit facility. Under the Securitization Program, we sold certain trade receivables and
related rights to an affiliate, which in turn sold an undivided variable percentage ownership interest in the trade
receivables to a financial institution, while maintaining a subordinated interest in a portion of the pool of trade
receivables. The Securitization Program had a minimum borrowing requirement equal to the lesser of either 80% of
our borrowing capacity or 100% of our borrowing base, which was a subset of the trade receivables sold under this
agreement. Interest on the secured borrowings under the Securitization Program was based on 30-day LIBOR plus an
applicable margin.
At October 1, 2022, we had $788 million of unused capacity, including $762 million from the U.S. revolving credit
facility after considering standby letters of credit and other limitations. Our leverage ratio covenant limits our unused
borrowing capacity to $664 million as of October 1, 2022.
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