Indebtedness

3 Months Ended

Mar. 30, 2024

Debt Disclosure [Abstract]

Indebtedness

INDEBTEDNESS

Total borrowings are summarized as follows (in millions):

			March 30, 2024		December 31, 2023
Term loans
	Term A Loans due April 20, 2027(1)		$	465.6	$	471.9
	Term B Loans due April 20, 2029(1)		1,382.7		1,386.2
	Total term loans		$	1,848.3	$	1,858.1
Notes and Bonds
	Coupon	Due
	3.900%	December 15, 2024	$	400.0	$	400.0
	4.375%	March 15, 2026	700.0		700.0
	4.650%	June 15, 2030(2)	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		2,244.4		2,244.4
Other financing			14.6		14.8
Unamortized premium (discount), net			(17.0)		(17.8)
Deferred financing fees			(24.8)		(26.1)
Total borrowings outstanding			4,065.5		4,073.4
	Current indebtedness		(440.6)		(440.6)
Total long-term debt less current portion			$	3,624.9	$	3,632.8

(1)    Discussed below collectively as the "Senior Secured Credit Facilities"

(2)     The coupon rate noted above is as of March 30, 2024. This will increase from 4.650% to 4.900% on payments starting after June 15, 2024, following a credit rating downgrade by S&P global in the first quarter of 2024. Future interest rate adjustments are subject to a 2.0% total cap above the original 3.150% interest rate based on certain rating events as specified in the Note’s Supplemental Indenture No. 3, dated as of June 19, 2020, among Perrigo Finance Unlimited Company, Perrigo Company plc, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee.

Credit Agreements

On April 20, 2022, we and our indirect wholly owned subsidiary, Perrigo Investments, LLC, (the "Borrower") entered into the senior secured credit facilities, which consisted of (i) a $1.0 billion five-year revolving credit facility (the “Revolver”), (ii) a $500.0 million five-year Term Loan A facility (the “Term Loan A Facility” and the Term A Loans thereunder, the "Term A Loans"), and (iii) a $1.1 billion seven-year Term Loan B facility (the “Term Loan B Facility” and the Term B Loans thereunder borrowed on April 20, 2022, the "2022 Term B Loans” and, together with the Revolver and Term Loan A Facility, the "Senior Secured Credit Facilities"), pursuant to a Term Loan and Revolving Credit Agreement (the "Credit Agreement").

On December 15, 2023, we and the Borrower, entered into Amendment No. 1, an Incremental Assumption Agreement (the "Amendment") to the Credit Agreement. The Amendment provides for a fungible add on to the 2022 Term B Loans in an aggregate principal amount of $300.0 million (the "Incremental Term B Loans" and together with the 2022 Term B Loans, the “Term B Loans”). The terms of the Incremental Term B Loans, including pricing and maturity, are identical to the 2022 Term B Loans. The Term B Loans will mature on April 20, 2029. The net proceeds from the Incremental Term B Loans were used to settle the cash tender offer by Perrigo Finance Unlimited Company ("Perrigo Finance") for $300.0 million in aggregate principal amount of 3.900% Senior Notes due 2024 ("2024 Notes"). The tender offer was settled on December 15, 2023, and Perrigo Finance accepted for purchase $300.0 million of the 2024 Notes and paid approximately $295.1 million in aggregate cash consideration (excluding accrued interest).

The Senior Secured Credit Facilities are guaranteed, along with any hedging or cash management obligations entered into with a lender, by us, and certain of our direct and indirect wholly-owned subsidiaries organized in the United States, Ireland, Belgium and England and Wales (subject to certain exceptions) (the “Guarantor Subsidiaries”). Additionally, the Borrower and the Guarantor Subsidiaries provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 5.300% Notes due 2043 issued by the Company, and the Guarantor Subsidiaries, the Company and the Borrower provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 3.900% Notes due 2024, the 4.375% Notes due 2026, the 4.650% Notes due 2030 and the 4.900% Notes due 2044 issued by Perrigo Finance Unlimited Company, a wholly-owned subsidiary.

We are subject to financial covenants in the Senior Secured Credit Facilities. The agreements contain financial covenants that require the Borrower and its restricted subsidiaries to (a) not exceed a maximum first lien secured net leverage ratio of 3.00 to 1.00 at the end of each fiscal quarter and (b) not fall below a minimum interest coverage ratio of 3.00 to 1.00 at the end of each fiscal quarter, provided that such covenants apply only to the Revolver and the Term Loan A Facility. If we consummate certain qualifying acquisitions during the term of the loan, the maximum first lien secured net leverage ratio covenant would increase to 3.25 to 1.00 for such quarter and the three following fiscal quarters thereafter.

During the three months ended March 30, 2024, principal repayments of $6.3 million and $3.5 million were made on the Term Loan A Facility and Term Loan B Facility, respectively.

There were no borrowings outstanding under the Revolver as of March 30, 2024 or December 31, 2023, respectively.

We are in compliance with all the covenants under our debt agreements as of March 30, 2024.

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 overdraft facilities as of March 30, 2024 or December 31, 2023.

We have financing leases that are reported in the above table under "Other financing" (refer to Note 6).