Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

DEBT

The Company’s borrowings consist of the following:

				As of
(in thousands)	Maturities	Stated Interest Rate	Effective Interest Rate	March 31, 2023		December 31, 2022
Unsecured notes (1)	2026	5.75%	5.75%	$	397,725	$	397,548
Revolving credit facility	2027	4.80% - 8.38%	5.81%	168,766		200,236
Truist Bank commercial note (2)	2031	6.10% - 6.37%	6.33%	23,276		23,522
Truist Bank commercial note	2032	6.38% - 6.72%	6.54%	63,483		66,513
Truist Bank commercial note (3)	2032	6.13% - 6.47%	6.40%	26,211		26,548
Pinnacle Bank term loan	2024	4.15%	4.18%	8,152		8,433
Other indebtedness	2025 - 2030	0.00% - 16.00%		3,506		3,560
Total Debt				691,119		726,360
Less: current portion				(123,018)		(155,813)
Total Long-Term Debt				$	568,101	$	570,547

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(1)     The carrying value is net of $2.3 million and $2.5 million of unamortized debt issuance costs as of March 31, 2023 and December 31, 2022, respectively.

(2)     The carrying value is net of $0.1 million of unamortized debt issuance costs as of March 31, 2023 and December 31, 2022.

(3)     The carrying value is net of $0.1 million of unamortized debt issuance costs as of March 31, 2023 and December 31, 2022.

At March 31, 2023 and December 31, 2022, the fair value of the Company’s 5.75% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $393.7 million and $395.1 million, respectively.

The outstanding balance on the Company’s $300 million unsecured revolving credit facility was $168.8 million as of March 31, 2023, consisting of U.S. dollar borrowings of $107 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%.

The fair value of the Company’s other debt, which is based on Level 2 inputs, approximates its carrying value as of March 31, 2023 and December 31, 2022. The Company is in compliance with all financial covenants of the revolving credit facility, commercial notes, and Pinnacle Bank term loan as of March 31, 2023.

During the three months ended March 31, 2023 and 2022, the Company had average borrowings outstanding of approximately $735.0 million and $665.0 million, respectively, at average annual interest rates of approximately 5.8% and 4.3%, respectively. During the three months ended March 31, 2023 and 2022, the Company incurred net interest expense of $13.1 million and $10.7 million, respectively.

During the three months ended March 31, 2023 and 2022, the Company recorded interest expense of $1.5 million and $3.4 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).