Debt

9 Months Ended

Sep. 30, 2023

Debt

Debt

NOTE 8—DEBT

Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s debt structure discussed below. The Company was in compliance with all debt related covenants as of September 30, 2023 and December 31, 2022.

As of September 30, 2023 and December 31, 2022, debt consisted of the following:

			September 30, 2023						December 31, 2022
	Interest Rate as of September 30, 2023	Maturity Date	Carrying Amount		Unamortized Deferred Financing Fees (1)		Total Debt, Less Unamortized Deferred Financing Fees		Carrying Amount		Unamortized Deferred Financing Fees (1)		Total Debt, Less Unamortized Deferred Financing Fees
2029 Senior Notes	5.125%	April 2029	$	447.0	$	(11.6)	$	435.4	$	447.0	$	(12.9)	$	434.1
2025 Senior Notes	5.375%	September 2025 (2)		115.0		(0.6)		114.4		500.0		(3.7)		496.3
Senior Credit Facility
2024 Term Loan B	—	September 2024 (2)		—		—		—		663.4		(5.1)		658.3
2028 Term Loan B	7.931%	May 2028		730.6		(12.5)		718.1		735.9		(14.4)		721.5
2026 Revolving Facility (3)	Various	May 2026		—		—		—		—		—		—
2028 Refinance Term Loans	13.827%	May 2028 (2)		1,045.2		(25.4)		1,019.8		—		—		—
Accounts Receivable Securitization Facility (4)	Various	November 2024		—		—		—		—		—		—
Other indebtedness	Various	Various		7.4		—		7.4		7.4		—		7.4
Total debt			$	2,345.2	$	(50.1)	$	2,295.1	$	2,353.7	$	(36.1)	$	2,317.6
Less: current portion(5)								(20.9)						(16.0)
Total long-term debt, net of unamortized deferred financing fees							$	2,274.2					$	2,301.6

(1) This caption does not include deferred financing fees related to the Company’s revolving facilities, which are included within “Deferred charges and other assets” on the condensed consolidated balance sheets.

(2) The 2024 Term Loan B was repaid in full on September 8, 2023 using the proceeds of the 2028 Refinance Term Loans, discussed below. Additionally, the 2025 Senior Notes were partially repaid on September 8, 2023 using the proceeds of the 2028 Refinance Term Loans.

(3) As of September 30, 2023, under the 2026 Revolving Facility, the Company had a capacity of $375.0 million and $26.8 million outstanding letters of credit. As of September 30, 2023, the Company had funds available for borrowing of $95.7 million (net of the applicable $16.8 million outstanding letters of credit as defined in the secured credit agreement), which reflects the borrowing limit imposed by the springing covenant. The springing covenant applies when 30% or more of the 2026 Revolving Facility’s capacity is drawn which then requires the Company to meet a first lien net leverage ratio (as defined in the secured credit agreement) not to exceed 3.50x at the end of each financial quarter. As of September 30, 2023, the first lien net leverage ratio was 6.41x and the outstanding borrowings did not exceed the 30% threshold. Additionally, the Company is required to pay a quarterly commitment fee in respect of any unused commitments under this facility equal to 0.375% per annum.

(4) As of September 30, 2023, this facility had a borrowing capacity of $150.0 million, and the Company had approximately $120.4 million of accounts receivable available to support this facility, based on the pool of eligible accounts receivable.

(5) The current portion of long-term debt as of September 30, 2023 was primarily related to $18.3 million of the scheduled future principal payments on both the 2028 Term Loan B and the 2028 Refinance Term Loans while the current portion of long-term debt as of December 31, 2022 was primarily related to $14.5 million of the scheduled future principal payments on both the 2024 Term Loan B and 2028 Term Loan B.

Pursuant to the terms of the existing senior secured credit agreement that was entered into during 2017 (the “Credit

Agreement”), the Company implemented the benchmark replacement to replace the LIBO rate with the Secured Overnight Financing Rate (“SOFR”) in the third quarter of 2023. Accounting Standards Codification (“ASC”) 848, Reference Rate Reform, will allow the Company to account for the modification as a continuation of the existing contract without additional analysis.

2028 Refinance Term Loans

On September 8, 2023, the Company entered into a Credit Agreement (the “2028 Refinance Credit Agreement”) which provides for a senior secured term loan facility of $1,077.3 million maturing in May 2028 (the “2028 Refinance Term Loans”). The 2028 Refinance Term Loans bear interest at a rate per annum equal to Term SOFR (as defined in the 2028 Refinance Credit Agreement) plus 8.50%, subject to a 3.00% SOFR floor, and was issued at a 3.0% original issue discount. Further, the 2028 Refinance Term Loans require scheduled quarterly payments, commencing on January 2, 2024, in amounts equal to 0.25% of the original principal amount of the 2028 Refinance Term Loans, with the balance to be paid at maturity.

The obligations under the 2028 Refinance Term Loans are secured by equity pledges of 100% of the equity interests and substantially all assets of certain subsidiaries of the Company that do not guaranty the obligations under the Credit Agreement.

The 2028 Refinance Credit Agreement requires the Company to comply with customary affirmative, negative and financial covenants, and contains events of default including (i) relating to a change of control or (ii) failure to maintain at least $100.0 million of Liquidity at the end of any calendar month, and (iii) a cross default to the Credit Agreement. If an event of default occurs, the Term Lenders will be entitled to take various actions, including the acceleration of amounts due under the 2028 Refinance Term Loans. Liquidity is defined under the 2028 Refinance Credit Agreement as a combination of cash and cash equivalents held at certain of the Company’s restricted subsidiaries as well as the funds available for borrowing under both the 2026 Revolving Facility and the Accounts Receivable Securitization Facility, subject to certain restrictions outlined in the 2028 Refinance Credit Agreement.

As of September 30, 2023, the Company was in compliance with all debt covenant requirements under the 2028 Refinance Credit Agreement and the Credit Agreement. The Company had Liquidity of $492.9 million, comprised of $276.8 million of cash and cash equivalents and approximately $216.1 million of funds available for borrowing under both the 2026 Revolving Facility and the Accounts Receivable Securitization Facility, $95.7 million and $120.4 million respectively.

Fees incurred in connection with the issuance of the 2028 Refinance Term Loans were $26.6 million. Due to a portion of the 2028 Refinance Term Loans meeting the criteria for modification accounting, $0.9 million of these fees were expensed and included within “(Gain) loss on extinguishment of long-term debt” in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023. The remaining $25.7 million of fees were capitalized and recorded within “Long-term debt, net of unamortized deferred financing fees” on the condensed consolidated balance sheet. Capitalized fees related to the 2028 Refinance Term Loans are being amortized over the 4.7 year term of the facility using the effective interest method.

2024 Term Loan B

On September 6, 2017, the Company entered into the Credit Agreement, which provides senior secured financing of up to $1,075.0 million (the “Senior Credit Facility”), which included $700.0 million senior secured Term Loan B facility maturing in September 2024 (the “2024 Term Loan B”).

On September 8, 2023, upon completion of the refinancing transactions discussed above, the Company repaid in full the outstanding principal amount of, and all accrued and unpaid interest on, the 2024 Term Loan B, in an aggregate amount of $659.9 million. As a result of this termination, the Company recognized a $3.1 million loss on extinguishment of debt, comprised of $3.0 million for the write-off of unamortized deferred financing costs, and $0.1 million of unamortized original issue discount.

2025 Senior Notes

On August 29, 2017, the Company executed an indenture (the “2017 Indenture”) pursuant to which it issued $500.0 million aggregate principal amount of 5.375% senior notes due 2025 (the “2025 Senior Notes”) in a 144A private transaction exempt from the registration requirements of the Securities Act of 1933, as amended.

On September 8, 2023, upon completion of the refinancing transactions discussed above, the Company redeemed $385.0 million of the 2025 Senior Notes. As a result, the Company recognized a $2.2 million loss on extinguishment of debt, which was comprised entirely of the write-off of unamortized deferred financing fees.