Indebtedness

6 Months Ended

Jul. 03, 2021

Debt Disclosure [Abstract]

Indebtedness

INDEBTEDNESS

Total borrowings outstanding are summarized as follows (in millions):

			July 3, 2021		December 31, 2020
Term loan
	2019 Term loan due August 15, 2022		$	600.0	$	600.0
Notes and Bonds
	Coupon	Due
	5.105%	July 28, 2023(1)	160.2		164.9
	4.000%	November 15, 2023	215.6		215.6
	3.900%	December 15, 2024	700.0		700.0
	4.375%	March 15, 2026	700.0		700.0
	3.150%	June 15, 2030	750.0		750.0
	5.300%	November 15, 2043	90.5		90.5
	4.900%	December 15, 2044	303.9		303.9
	Total notes and bonds		2,920.2		2,924.9
Other financing			53.4		57.4
Unamortized premium (discount), net			(2.1)		(0.3)
Deferred financing fees			(15.6)		(17.1)
Total borrowings outstanding			3,555.9		3,564.9
	Current indebtedness		(630.1)		(37.3)
Total long-term debt less current portion			$	2,925.8	$	3,527.6

    (1) Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate.

Revolving Credit Agreements

On March 8, 2018, we entered into a $1.0 billion revolving credit agreement maturing on March 8, 2023 (the "2018 Revolver"). There were no borrowings outstanding under the 2018 Revolver as of July 3, 2021 or December 31, 2020.

Term Loan and Notes

In August 2019, we refinanced a prior term loan with the proceeds of a new $600.0 million term loan, maturing on August 15, 2022 (the "2019 Term Loan"). We had $600.0 million outstanding under our 2019 Term Loan as of both July 3, 2021 and December 31, 2020.

Waiver of Debt Covenants

We are subject to financial covenants in the 2018 Revolver and 2019 Term Loan, including a maximum leverage ratio covenant, which previously required us to maintain a ratio of Consolidated Net Indebtedness to Consolidated EBITDA (as such terms are defined in such credit agreements) of not more than 3.75 to 1.00 at the end of each fiscal quarter. As of July 3, 2021, we were not in compliance with such covenant. However, we have received a waiver of such covenant from the lenders under both such credit facilities and have entered into an amendment to each of the 2018 Revolver and 2019 Term Loan. Under such amendments, the maximum leverage ratio was increased to 5.75 to 1.00 for the third quarter of 2021, returning to 3.75 to 1.00 beginning with the fourth quarter of 2021. If we consummate certain qualifying acquisitions in the fourth quarter of 2021 or any subsequent quarter during the term of the loan, the maximum ratio would increase to 4.00 to 1.00 for such quarter. Neither the failure to meet the leverage covenant for the second quarter of 2021, nor the waiver and amendments described above, affect our ability to draw under the 2018 Revolver.

2020 Notes

On June 19, 2020, Perrigo Finance Unlimited Company, an indirect wholly-owned finance subsidiary of Perrigo ("Perrigo Finance"), issued $750.0 million in aggregate principal amount of 3.150% Senior Notes due 2030 (the “2020 Notes") and received net proceeds of $737.1 million after the underwriting discount and offering expenses. Interest on the 2020 Notes is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The 2020 Notes will mature on June 15, 2030 and are governed by a base indenture and a third supplemental indenture (collectively, the "2020 Indenture"). The 2020 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Perrigo. Perrigo Finance may redeem the 2020 Notes in whole or in part at any time for cash at the make-whole redemption prices described in the 2020 Indenture. On July 6, 2020, a portion of the proceeds of the 2020 Notes were used to fund the redemption of $280.4 million of Perrigo Finance's 3.500% Senior Notes due March 15, 2021 and $309.6 million of 3.500% Senior Notes due December 15, 2021.

Other Financing

We have overdraft facilities available that we use to support our cash management operations. We report any balances outstanding in the above table under "Other financing". There were no borrowings outstanding under the facilities as of July 3, 2021 or December 31, 2020.

On June 17, 2020, we incurred debt of $34.3 million related to our equity method investment in Kazmira pursuant to two Promissory Notes, with $3.7 million, $5.8 million and $24.8 million to be settled in November 2020, May 2021 and November 2021, respectively. On December 8, 2020, we repaid the $3.7 million balance due on the November 2020 portion of the Promissory Notes. On June 7, 2021, we repaid the $5.8 million balance due on the May 2021 portion of the Promissory Notes.

We have financing leases that are reported in the above table under "Other financing" (refer to Note 11).