XML 42 R20.htm IDEA: XBRL DOCUMENT v3.21.2
Indebtedness
 9 Months Ended
Oct. 02, 2021
Debt Disclosure [Abstract]  
Indebtedness INDEBTEDNESS
Total borrowings outstanding are summarized as follows (in millions):
October 2,
2021		December 31,
2020
Term loan
2019 Term loan due August 15, 2022$600.0 $600.0 
Notes and Bonds
CouponDue
5.105%
July 28, 2023(1)
$156.6 $164.9 
4.000%November 15, 2023215.6 215.6 
3.900%December 15, 2024700.0 700.0 
4.375%March 15, 2026700.0 700.0 
3.150%June 15, 2030750.0 750.0 
5.300%November 15, 204390.5 90.5 
4.900%December 15, 2044303.9 303.9 
Total notes and bonds2,916.6 2,924.9 
Other financing52.0 57.4 
Unamortized premium (discount), net(3.5)(0.3)
Deferred financing fees(14.8)(17.1)
Total borrowings outstanding3,550.3 3,564.9 
Current indebtedness(629.4)(37.3)
Total long-term debt less current portion$2,920.9 $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 October 2, 2021 or December 31, 2020.

Term Loan and Notes

In August 2019, we refinanced a prior term loan with the proceeds of a $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 October 2, 2021 and December 31, 2020.

Waiver and Amendment 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. During the nine months ended October 2, 2021, we received a waiver for non-compliance with such covenant as of July 3, 2021 from the lenders under both such credit facilities and 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. Due to the waiver and amendment described above, our leverage ratios at the end of the second and third quarters of 2021 do not prevent us from drawing under the 2018 Revolver. As of October 2, 2021, we are in compliance with all the covenants under our debt agreements.
2020 Notes and 2021 Notes Redemption

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. Due to a credit ratings downgrade by S&P Global Ratings and Moody’s in the third quarter of 2021, the interest on the 2020 Notes will step up from 3.150% to 3.900%, starting after the interest payment due on December 15, 2021. 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 (collectively, the "2021 Notes").

As a result of the early redemption of the 2021 notes, during the three months ended September 26, 2020, we recorded a loss of $20.0 million in Loss on extinguishment of debt on the Condensed Consolidated Statements of Operations, consisting of the premium on debt repayments, the write-off of deferred financing fees, and the write-off of the remaining bond discounts.

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 October 2, 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).