Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

4. DEBT

Our long-term debt, as of March 31, 2022 and December 31, 2021, was as follows (in thousands):

	March 31,			December 31,
	2022			2021
2021 Credit Agreement:
2021 Term loan, due September 2026, interest at adjusted LIBOR plus       1.375% (combined rate of 2.381% at March 31, 2022)	$	146,250		$	148,125
Less – deferred financing costs		(3,218	)		(3,406	)
2021 Term Loan, net of unamortized discounts		143,032			144,719
$450 million revolving loan facility, due September 2026, interest at adjusted       LIBOR plus applicable margin		245,000			-
2016 Convertible Notes:
2016 Convertible Notes – Senior convertible notes; due March 15, 2036;       cash interest at 4.25%		-			230,000
Total debt, net of unamortized discounts		388,032			374,719
Current portion of long-term debt, net of unamortized discounts		(252,500	)		(237,500	)
Long-term debt, net of unamortized discounts	$	135,532		$	137,219

2021 Credit Agreement. During the quarter ended March 31, 2022, we made $1.9 million of principal repayments on our $150 million aggregate principal five-year term loan (the “2021 Term Loan”). Additionally, in March 2022 we borrowed $245.0 million from our $450 million aggregate principal five-year revolving loan facility (“2021 Revolver”). These funds were used to settle our 2016 Convertible Notes (see below).

As of March 31, 2022, our interest rate on the 2021 Term Loan is 2.381% (adjusted LIBOR plus 1.375% per annum), effective through June 2022, and our commitment fee on the unused $205.0 million 2021 Revolver is 0.15%. As of March 31, 2022, the remaining $205.0 million of the 2021 Revolver is available to us.

The interest rates under the 2021 Credit Agreement are based upon our choice of an adjusted LIBOR rate plus an applicable margin of 1.375% - 2.125%, or an alternate base rate (“ABR”) plus an applicable margin of 0.375% - 1.125%, with the applicable margin, depending on our then-net secured total leverage ratio. We will pay a commitment fee of 0.150% - 0.325% of the average daily unused amount of the 2021 Revolver, with the commitment fee rate also dependent upon our then-net secured total leverage ratio. The 2021 Credit Agreement includes LIBOR transition language in which we can elect an ABR, a Eurodollar rate, an alternate currency term rate, or an alternate currency daily rate.

2016 Convertible Notes. During the period from, and including, December 15, 2021 to the close of business on the business day immediately preceding March 15, 2022 (the “Conversion Period”), the 2016 Convertible Note holders were able to convert all or any portion of their 2016 Convertible Notes at the conversion rate then in effect (17.7621 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes). For the 2016 Convertible Notes presented during this Conversion Period, the settlement amount was equal to the sum of the daily settlement amounts for each of the following 40 consecutive trading days during the period of January 12, 2022 to March 10, 2022 (the “Observation Period”).

During the Conversion Period, $229.1 million principal amount of the 2016 Convertible Notes were converted. On March 15, 2022, we paid each converting holder that exercised their conversion right, cash in an amount equal to $1,053.68 per each $1,000 principal amount of 2016 Convertible Notes being converted, for a total cash payment of $241.4 million. The remaining principal amount of $0.9 million that was not converted by the holders was redeemed and paid for on March 15, 2022 at a redemption price of 100% of the principal amount. Total settlement of the 2016 Convertible Notes was $242.3 million. As of March 31, 2022, there were no remaining 2016 Convertible Notes outstanding.

As a result of our irrevocable election made in December 2021 to settle all conversions during the Conversion Period (discussed above) in cash, a derivative liability was created and required to be separated from the debt upon conversion by the holders. There were no conversions as of December 31, 2021. At the close of the Observation Period, as a result of the conversions in March 2022, we recognized a $7.5 million loss on derivative liability upon debt conversion due to the related change in our stock price over the Observation Period. The loss was recorded to other income (expense) in our unaudited Condensed Consolidated Statements of Income (the “Income Statements”) with the remaining amount paid above par recorded to additional paid-in capital.