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Debt
9 Months Ended
Oct. 02, 2021
Debt Disclosure [Abstract]  
Debt DEBT
Total debt consisted of the following:
Debt DescriptionMaturityInterest Rate as of October 2, 2021Carrying Value as of October 2, 2021Carrying Value as of January 2, 2021
ABL FacilityMay 31, 2024—%$— $— 
Initial Term Loan Facility (net of $2 and $3
of unamortized deferred financing costs,
respectively)
June 27, 20231.83%1,783 2,098 
2019 Incremental Term Loan Facility (net of $26
      and $30 of unamortized deferred financing
      costs, respectively)
September 13, 20262.08%1,444 1,451 
2020 Incremental Term Loan Facility (net of $11
      of unamortized deferred financing costs)(1)
April 24, 2025—%— 284 
Secured Notes (net of $11 and $13 of
      unamortized deferred financing costs)
April 15, 20256.25%989 987 
Unsecured Senior Notes due 2024 (net of $3 of
      unamortized deferred financing costs)(1)
June 15, 2024—%— 597 
Unsecured Senior Notes due 2029 (net of $9 of
      unamortized deferred financing costs)
February 15, 20294.75%891 — 
Obligations under financing leases2021–20391.63% - 6.1%281 323 
Other debt2021–20315.75% - 9.00%
Total debt5,396 5,748 
Current portion of long-term debt
(115)(131)
Long-term debt$5,281 $5,617 
(1)    The 2020 Incremental Term Loan Facility and Unsecured Senior Notes due 2024 were paid in full on February 4, 2021 with the issuance of the Unsecured Senior Notes due 2029 and subsequently terminated as further discussed below. The related unamortized deferred financing costs were written off in connection with the terminations.
As of October 2, 2021, approximately 60% of the Company’s total debt bears interest at a floating rate.
ABL Facility
USF's asset based senior secured revolving credit facility (the “ABL Facility”) provides USF with loan commitments having a maximum aggregate principal amount of $1,990 million. The ABL Facility is scheduled to mature on May 31, 2024.
Borrowings under the ABL Facility bear interest, at USF’s periodic election, at a rate equal to the sum of an alternative base rate (“ABR”), as described under the ABL Facility, plus a margin ranging from 0.00% to 0.50%, or the sum of LIBOR plus a margin ranging from 1.00% to 1.50%, in each case based on USF’s excess availability under the ABL Facility. The margin under the ABL Facility as of October 2, 2021 was 0.00% for ABR loans and 1.00% for LIBOR loans.
USF had no outstanding borrowings, and had issued letters of credit totaling $253 million, under the ABL Facility as of October 2, 2021. The outstanding letters of credit primarily relate to securing USF’s obligations with respect to its insurance program and certain real estate leases. There was available capacity of $1,737 million under the ABL Facility as of October 2, 2021.
Term Loan Facilities
Under its term loan credit agreement, USF has entered into an initial senior secured term loan facility (the “Initial Term Loan Facility”) and an incremental senior secured term loan facility (the “2019 Incremental Term Loan Facility”). The Initial Term Loan Facility had a carrying value of $1,783 million, net of $2 million of unamortized deferred financing costs as of October 2, 2021. During the 39 weeks ended October 2, 2021, the Company made voluntary prepayments of the Initial Term Loan Facility totaling $300 million. The table above reflects the interest rate on the Initial Term Loan Facility as of October 2, 2021. The Initial Term Loan Facility is scheduled to mature on June 27, 2023.
The 2019 Incremental Term Loan Facility had a carrying value of $1,444 million, net of $26 million of unamortized deferred financing costs as of October 2, 2021. Borrowings under the 2019 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of LIBOR plus a margin of 2.00%, or the sum of an ABR, determined in accordance with the term loan credit agreement, plus a margin of 1.00%. The 2019 Incremental Term Loan Facility is scheduled to mature on September 13, 2026.
Secured Notes
The Secured Notes had a carrying value of $989 million, net of $11 million of unamortized deferred financing costs, as of October 2, 2021. The Secured Notes are scheduled to mature on April 15, 2025.
Unsecured Senior Notes due 2029
On February 4, 2021, USF completed a private offering of $900 million aggregate principal amount of Unsecured Senior Notes due 2029. USF used the proceeds of the Unsecured Senior Notes due 2029, together with cash on hand, to redeem all of the Company's then outstanding Unsecured Senior Notes due 2024, repay all of the then outstanding borrowings under the incremental senior secured term loan facility borrowed in April 2020 (the “2020 Incremental Term Loan Facility”) and to pay related fees and expenses. In connection with the repayment of the Unsecured Senior Notes due 2024 and 2020 Incremental Term Loan Facility, the Company applied debt extinguishment accounting and recorded $23 million in loss on extinguishment of debt in the Company's Consolidated Statements of Comprehensive Income, consisting of a $14 million write-off of pre-existing unamortized deferred financing costs related to the redeemed facilities and a $9 million early redemption premium related to the Unsecured Senior Notes due 2024. Lender fees and third-party costs of $9 million associated with the issuance of the Unsecured Senior Notes due 2029 were capitalized as deferred financing costs. The Unsecured Senior Notes due 2029 had an outstanding balance of $891 million, net of $9 million of unamortized deferred financing costs, as of October 2, 2021. The Unsecured Senior Notes due 2029 bear interest at a rate of 4.75% per annum and will mature on February 15, 2029. On or after February 15, 2024, the Unsecured Senior Notes due 2029 are redeemable, at USF's option, in whole or in part at a price of 102.375% of the remaining principal, plus accrued and unpaid interest, if any, to the redemption date. On or after February 15, 2025 and February 15, 2026, the optional redemption price for the Unsecured Senior Notes due 2029 declines to 101.188% and 100.000%, respectively, of the remaining principal amount, plus accrued and unpaid interest, if any, to the redemption date.
Debt Covenants
The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that restrict our ability to incur certain additional indebtedness, create or permit liens on assets, pay dividends, or engage in mergers or consolidations. USF had approximately $1.4 billion of restricted payment capacity under these covenants, and approximately $2.8 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of October 2, 2021.