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Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt DEBT
The Company’s borrowings consist of the following:
As of December 31
(in thousands)MaturitiesStated Interest RateEffective Interest Rate20222021
Unsecured notes (1)
20265.75%5.75%$397,548 $396,830 
Revolving credit facility
2027
1.61% - 7.88%
3.16%200,236 209,643 
Truist Bank commercial note (2)
2031
1.85% - 5.77%
3.39%23,522 24,504 
Truist Bank commercial note
2032
2.10% - 6.17%
3.71%66,513 22,500 
Truist Bank commercial note (3)
2032
3.49% - 5.92%
4.78%26,548 — 
Pinnacle Bank term loan20244.15%4.19%8,433 9,558 
Other indebtedness2025 - 2030
0.00% - 16.00%
3,560 4,466 
Total Debt726,360 667,501 
Less: current portion(155,813)(141,749)
Total Long-Term Debt$570,547 $525,752 
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(1)    The carrying value is net of $2.5 million and $3.2 million of unamortized debt issuance costs as of December 31, 2022 and 2021, respectively.
(2)    The carrying value is net of $0.1 million of unamortized debt issuance costs as of December 31, 2022 and 2021.
(3)    The carrying value is net of $0.1 million of unamortized debt issuance costs as of December 31, 2022.
The Company’s $400 million senior unsecured fixed-rate notes (the Notes), due June 1, 2026, are guaranteed, jointly and severally, on a senior unsecured basis, by certain of the Company’s existing and future domestic subsidiaries, as described in the terms of the indenture. The Notes have a coupon rate of 5.75% per annum, payable semi-annually on June 1 and December 1. The Company may redeem the Notes in whole or in part at any time at the respective redemption prices described in the indenture. At December 31, 2022 and 2021, the fair value of the Notes, based on quoted market prices (Level 2 fair value assessment), totaled $395.1 million and $417.5 million, respectively.
On May 3, 2022, the Company amended the revolving credit facility to, among other things, (i) extend the maturity of the facility to May 30, 2027, (ii) eliminate borrowings under separate U.S. dollar and multicurrency tranches, (iii) update certain interest rate benchmarks including replacing USD London Interbank Offered Rate (LIBOR) with SOFR for borrowings denominated in U.S. dollars, (iv) incorporate a sub-facility for the issuance of letters of credit, and (v) allow for applicable margin for borrowings to be determined and adjusted quarterly based on the Company’s Total Net Leverage Ratio. The outstanding balance on the Company’s $300 million unsecured revolving credit facility was $200.2 million as of December 31, 2022, consisting of U.S. dollar borrowings of $140 million with interest payable at SOFR plus 1.375% or prime rate plus 0.375%, and British Pound (GBP) borrowings of £50 million with interest payable at Daily Sterling Overnight Index Average (SONIA) plus 1.375%.
On July 5, 2022, the Company’s automotive subsidiary amended its commercial note, dated December 28, 2021, with Truist Bank to, among other things, increase the aggregate loan amount to $71.6 million. The amended commercial note is payable over a 10-year period, with a final payment of the outstanding principal balance due on July 1, 2032. The amended commercial note bears interest at variable rates based on SOFR plus 2.05% per annum.
On July 5, 2022, the Company’s automotive subsidiary entered into three additional commercial notes with Truist Bank in an aggregate amount of $27.2 million. The commercial notes are each payable over a 10-year period, with a final payment of the outstanding principal balances due on July 1, 2032. The commercial notes each bear interest at variable rates based on SOFR plus 1.8% per annum. On the same date, the Company’s automotive subsidiary entered into three interest rate swap agreements with a total notional value of $27.2 million and a maturity date of July 1, 2032. The interest rate swap agreements will pay the automotive subsidiary interest on the $27.2 million notional amount based on SOFR plus 1.8% per annum and the automotive subsidiary will pay the counterparty a fixed rate of 4.861% per annum. The new interest rate swap agreements were entered into to convert the variable rate borrowings under these commercial notes into fixed rate borrowings. Based on the terms of the new interest rate swap agreements and the underlying borrowings, the new interest rate swaps were determined to be effective and thus qualify as cash flow hedges.
On October 21, 2021, the Company’s automotive subsidiary entered into a commercial note with Truist Bank in an aggregate principal amount of $24.75 million. The commercial note is payable over a 10-year period, with a final payment of the outstanding principal balance on October 1, 2031. The commercial note bears interest at variable rates based on SOFR plus 1.8% per annum. The automotive subsidiary used the net proceeds from this commercial note to repay the outstanding balance on the commercial note due in 2029. On the same date, the Company’s
automotive subsidiary rolled its existing interest rate swap into a new interest rate swap agreement with a total notional value of $24.75 million and a maturity date of October 1, 2031. The new interest rate swap agreement will pay the automotive subsidiary variable interest on the $24.75 million notional amount based on SOFR plus 1.8% per annum and the automotive subsidiary will pay the counterparty a fixed rate of 4.118% per annum. The new interest rate swap agreement was entered into to convert the variable rate borrowing under this commercial note into a fixed rate borrowing. Based on the terms of the new interest rate swap agreement and the underlying borrowing, the new interest rate swap was determined to be effective and thus qualifies as a cash flow hedge.
On December 2, 2022, the GHG subsidiary amended its loan facility with Pinnacle Bank to extend the maturity of its $6.0 million line of credit to December 2, 2023 and updated the interest rate to be based on SOFR plus 2.85% per annum. The GHG subsidiary had no borrowings outstanding under its line of credit as of December 31, 2022 and 2021.
On January 26, 2021, the GHG subsidiary amended its loan facility with Pinnacle Bank to decrease the principal of the term loan to $10.6 million, bearing interest at 4.15% per annum.
The fair value of the Company’s other debt, which is based on Level 2 inputs, approximates its carrying value as of December 31, 2022 and 2021. The Company is in compliance with all financial covenants of the revolving credit facility, commercial notes, and Pinnacle Bank term loan as of December 31, 2022.
During 2022 and 2021, the Company had average borrowings outstanding of approximately $689.9 million and $545.2 million, respectively, at average annual interest rates of approximately 4.8%. The Company incurred net interest expense of $51.2 million, $30.5 million and $34.4 million during 2022, 2021 and 2020, respectively.
For the years ended December 31, 2022, 2021 and 2020, the Company recorded interest expense of $16.5 million, $4.1 million and $8.5 million, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest. The fair value of the mandatorily redeemable noncontrolling interest was based on the fair value of the underlying subsidiaries owned by GHC One and GHC Two, after taking into account any debt and other noncontrolling interests of its subsidiary investments. The fair value of the owned subsidiaries is determined by reference to either a discounted cash flow or EBITDA multiple, which approximates fair value (Level 3 fair value assessment).