Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

16. Debt

			Carrying amount
	Weighted Average Interest Rate % 1		September 30, 2023		December 31, 2022
Short-term debt			$	4.7	$	29.1
Long-term debt:
Term loans (maturing September 2026):
DDTL Facility loan denominated in Canadian dollars, secured	5.86	%	—		85.5
Term Loan A Facility loan denominated in Canadian dollars, secured ("CAD TLA Facility")	7.83	%	82.1		—
Term Loan A Facility loan denominated in US dollars, secured ("USD TLA Facility")	7.87	%	1,725.0		—
Less: unamortized debt issuance costs			(16.8)		(0.4)
Senior secured and unsecured notes:
5.375% Senior unsecured notes due in January 2025 (the "2016 Notes")			—		500.0
Less: unamortized debt issuance costs			—		(3.6)
6.75% Senior secured notes due in March 2028 (the "2023 Secured Notes")			550.0		—
Less: unamortized debt issuance costs			(7.2)		—
7.75% Senior unsecured notes due in March 2031 (the "2023 Unsecured Notes")			800.0		—
Less: unamortized debt issuance costs			(10.9)		—
Total long-term debt			3,122.2		581.5
Total debt			$	3,126.9	$	610.6
Long-term debt:
Current portion			$	41.2	$	4.4
Non-current portion			3,081.0		577.1
Total long-term debt			$	3,122.2	$	581.5

1 The weighted average interest rate reflects the rate at the end of the period for the debt outstanding

At September 30, 2023, the Company had unused committed revolving credit facilities aggregating $730.1 million that are available until September 2026 subject to certain covenant restrictions, unused uncommitted revolving credit facilities aggregating $5.0 million that are available until October 2023, and unused uncommitted revolving credit facilities aggregating $5.0 million with no maturity date. The Company was in compliance with all financial and other covenants applicable to the credit facilities at September 30, 2023.

Short-term Debt

Short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facilities and has a weighted average interest rate of 4.0% at September 30, 2023 (at December 31, 2022: 5.8%).

Long-term Debt

a)Term Loans

During 2016, the Company entered into a credit agreement with a syndicate of lenders (as amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). The Credit Agreement is comprised of multicurrency revolving facilities (the “Revolving Facilities”), the delayed-draw term loan facility (the “DDTL Facility”), and the Term Loan A facility (the “TLA Facility” and together with the Revolving Facilities and DDTL Facility, the “Facilities”). The Credit Agreement matures on September 21, 2026. Beginning in the third quarter of 2022, the existing DDTL Facility, denominated in Canadian Dollars, was subject to an annual amortization rate of 5%, payable in quarterly installments, with the balance payable upon maturity.

In connection with the acquisition of IAA the Company entered into a debt commitment letter with certain financial institutions that committed to provide, subject to the terms and conditions, a bridge loan facility in an aggregate principal amount of up to $2.8 billion and a backstop revolving facility in an aggregate principal amount of up to $750.0 million. In December 2022, the Company subsequently amended the terms of its Credit Agreement which, among other things, permitted the acquisition of IAA and served to terminate the backstop commitments (including the revolving backstop facility and $88.9 million of bridge commitments that served as a backstop for its existing term loans under the credit agreement) and replaced an additional $1.8 billion of bridge commitments with further TLA Facility commitments.

On March 20, 2023, with the closing of the acquisition of IAA, $1.8 billion of the TLA Facility was funded at an initial adjusted term SOFR of 7.54%. The TLA Facility is comprised of a facility denominated in US dollars (“USD TLA Facility”) and a facility denominated in Canadian dollars (“CAD TLA Facility”). The Company’s existing Canadian dollar DDTL Facility loan of CAD $115.9 million was converted to a CAD TLA Facility loan, an alternative currency term rate loan, and continues to be subject to an annual amortization rate of 5%, payable in quarterly installments, with the balance payable upon maturity. Under the amended terms, mandatory principal repayments on the USD TLA Facility began in the second quarter of 2023 and are subject to quarterly installments of 1.25% of the $1.8 billion principal amount, with the balance payable at maturity. On June 30, 2023, the Company repaid $100.0 million of principal as permitted by the Credit Agreement, $22.8 million of which was mandatory and due on June 30, 2023 and $77.2 million of which was voluntary. The voluntary repayment of $77.2 million was fully applied to the mandatory repayment amounts due on September 30, 2023, December 31, 2023, and March 31, 2024, and partially applied to the June 30, 2024 mandatory repayment. The next mandatory repayment is due on June 30, 2024 for $14.1 million, and is recognized in the current portion of long term debt on the consolidated balance sheet, together with $22.8 million mandatory repayment due on September 30, 2024. Further, under the terms of the amendment to the Credit Agreement made in December 2022, certain amended terms became effective including an increase to the total size of the Facilities to up to $2.7 billion, including $1.9 billion of commitments under the TLA Facility.

In connection with the funding of the TLA facility in the first quarter of 2023, the Company incurred debt issuance costs of $22.5 million in connection with the amendment of the Credit Agreement and funding of the TLA Facility, of which $1.4 million is included in non-current assets, $20.5 million has been capitalized against the TLA Facility, and $0.6 million is recorded in acquisition-related and integration costs.

At September 30, 2023, the Company had $4.3 million unamortized deferred debt issue costs relating to the Revolving Facilities, all of which is included in non-current assets.

b)Senior Secured and Unsecured Notes

2016 Notes

On December 21, 2016, the Company completed the offering of $500.0 million aggregate principal amount of 5.375% senior unsecured notes due January 15, 2025 (the “2016 Notes”).

The 2016 Notes were redeemed on March 20, 2023 at 100.0% of their original offering price, plus accrued and unpaid interest. The Company was relieved of its obligations for the 2016 Notes upon redemption and therefore recognized the difference of $3.3 million between the reacquisition price and the net carrying amount of the debt extinguished (which included unamortized deferred debt issuance costs) as a loss on redemption of the 2016 Notes in interest expense in the condensed consolidated income statement during the first quarter of 2023.

2021 Notes

On December 21, 2021, in connection with the proposed acquisition of Euro Auctions, the Company completed the offering of two series of senior notes: (i) $600.0 million aggregate principal amount of 4.750% senior notes due December 15, 2031 and (ii) $425.0 million Canadian dollar aggregate principal amount of 4.950% senior notes due December 15, 2029 (together the “2021 Notes”). On May 4, 2022, the Company redeemed all of the 2021 Notes at a redemption price equal to 100% of the original offering price of the notes, plus accrued and unpaid interest. The Company was relieved of its obligations for the 2021 Notes upon redemption and therefore recognized the difference of $4.8 million between the reacquisition price and the net carrying amount of the debt extinguished (which included unamortized deferred debt issuance costs) as a loss on redemption of the 2021 Notes in interest expense in the condensed consolidated income statement during the second quarter of 2022.

2023 Notes

On March 15, 2023, the Company completed the offering of (i) $550.0 million aggregate principal amount of 6.750% senior secured notes due March 15, 2028 (the “2023 Secured Notes”) and (ii) $800.0 million aggregate principal amount of 7.750% senior unsecured notes due March 15, 2031 (the “2023 Unsecured Notes”, and together with the 2023 Secured Notes, the “2023 Notes”). The gross proceeds of the 2023 Notes were released from escrow on March 20, 2023 and were used, along with the TLA Facility, to fund the acquisition of IAA.

Interest on the 2023 Notes is payable in cash semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2023.

The 2023 Secured Notes are jointly and severally guaranteed on a senior secured basis and the 2023 Unsecured Notes are jointly and severally guaranteed on a senior unsecured basis by certain of the Company’s subsidiaries.

The Company incurred total debt issuance costs of $19.7 million in connection with the issuance of the 2023 Secured Notes and 2023 Unsecured Notes, all of which has been capitalized and recorded as a reduction of the amounts outstanding under the 2023 Notes.