Debt and Financing Arrangements

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt and Financing Arrangements

Debt and Financing Arrangements

Credit Facility

On August 2, 2022, the Company amended its credit agreement to, among other things, provide a $950.0 million multi-currency revolving credit facility and amend rates per annum at which borrowings in different denominations bear interest (the "Second Amended Credit Facility"). On August 2, 2022, proceeds from borrowings under the multi-currency revolving credit facility were used to, among other things, prepay in full the Company's then-outstanding term loans and refinance its outstanding borrowings under the revolving credit facility. Immediately prior to payment, the aggregate amounts outstanding related to the term loans and revolving credit facility were approximately $306.3 million and $72.6 million, respectively. The Second Amended Credit Facility matures on August 2, 2027, and as a result, the related borrowings have been classified as long-term debt, with the proceeds and repayments under the revolving credit facility presented on a gross basis in the consolidated statements of cash flows.

The credit agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on the Company's leverage and interest coverage ratios. The credit agreement also includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of September 30, 2023, the Company was in compliance with all covenants under its credit agreement.

As of September 30, 2023, there were $557.1 million in outstanding borrowings under the Company's multi-currency revolving credit facility with a weighted average interest rate of 6.44%. As of September 30, 2023, the Company had available borrowings under its multi-currency revolving credit facility of $385.1 million after giving effect to $7.8 million of outstanding letters of credit.

Other Short-Term Borrowings

The Company has certain unsecured local credit facilities available through its subsidiaries. Amounts outstanding under other short-term borrowings are presented in short-term debt in the consolidated balance sheets with the proceeds and repayments presented on a gross basis in the consolidated statements of cash flows when the original maturity exceeds 90 days. There were $34.1 million and $40.3 million in outstanding borrowings under the Company's local credit facilities as of September 30, 2023 and December 31, 2022, respectively. The weighted average interest rate applicable to the outstanding borrowings was 0.53% and 0.85% as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023, the Company had available borrowings remaining under these local credit facilities of $27.5 million.

Letters of Credit

As of September 30, 2023 and December 31, 2022, there were outstanding letters of credit related to agreements, including the Company's Second Amended Credit Facility, totaling $10.9 million and $10.0 million, respectively, of which $7.8 million and $7.3 million, respectively, was secured. These agreements provided a maximum commitment for letters of credit of $58.0 million as of September 30, 2023.

Senior Unsecured Notes

On October 3, 2023, Acushnet Company (the "Issuer"), a wholly owned subsidiary of the Company, completed the issuance and sale of $350.0 million in gross proceeds of the Issuer's 7.375% senior unsecured notes due 2028 (the “Notes”). The Notes were issued pursuant to an Indenture, dated October 3, 2023 (the “Indenture”), among the Issuer, U.S. Bank Trust Company, National Association, as trustee of the Notes, and the Company and certain subsidiaries of the Issuer as guarantors.

The proceeds from the Notes offering were used to repay $345.6 million of the outstanding borrowings under the Company's multi-currency revolving credit facility, as well as to pay fees and expenses related to the Notes offering. In connection with the Notes offering, the Company estimates fees and expenses totaling approximately $6.4 million will be included in long-term debt on the unaudited condensed consolidated balance sheet and will be amortized to interest expense, net over the term of the Notes.

The Notes will bear interest at the rate of 7.375% per year, with interest payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2024.

The Notes will mature on October 15, 2028, unless earlier repurchased or redeemed in accordance with their terms, and as a result, will be classified as long-term debt. The Issuer may redeem all or part of the Notes at any time prior to October 15, 2025 at 100.0% of the principal amount redeemed plus a “make-whole” premium. The make-whole premium is the greater of (i) 1.0% of the then outstanding principal amount of the Notes being redeemed and (ii) the excess, if any, of: (1) the present value at such redemption date of the sum of (A) 103.688% of the principal amount of Notes being redeemed plus (B) all required interest payments due on the Notes through October 15, 2025 (excluding accrued but unpaid interest) and (2) the then outstanding principal amount of the Notes being redeemed.

Thereafter, the Issuer may redeem all or part of the Notes at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, together with any accrued and unpaid interest, if redeemed during the 12-month period beginning on October 15 of the years indicated below:

Year	Redemption Price
2025	103.688	%
2026	101.844	%
2027 and thereafter	100.000	%