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Long-Term Debt
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
Successor
In connection with the Closing of the Ranpak Business Combination, Ranger Pledgor LLC ("Holdings"), Ranger Packaging LLC (the "US Borrower") and Ranpak B.V (the "Dutch Borrower" and together with the US Borrower, the "Borrowers"), entered into a First Lien Credit Agreement that provided for senior secured credit facilities to, in part, (i) fund the business combination, (ii) repay and terminate the existing indebtedness of Rack Holdings, and (iii) pay all fees, premiums, expenses and other transaction costs incurred in connection with the foregoing. The aggregate principal amount of the senior secured credit facilities consists of a $378.2 million dollar-denominated first lien term facility (the “First Lien Dollar Term Facility”), a €140.0 million ($152.6 million equivalent) euro-denominated first lien term facility (the “First Lien Euro Term Facility” and, together with the First Lien Dollar Term Facility, the “First Lien Term Facility”) and a $45.0 million revolving facility (the “Revolving Facility” and together with the First Lien Term Facility, the “Facilities”). The First Lien Term Facility matures seven years after the closing date and the Revolving Facility matures five years after the Closing Date. In December 2019, the Company closed on a public offering of its Class A common stock generating net proceeds of approximately $107.7 million that was used to pay down the First Lien Dollar Term Facility. As of December 31, 2019, no amounts are outstanding under the Revolving Facility.
At December 31, 2019 long-term debt consisted of the following (in millions):
First Lien Dollar Term Facility
 
$
270.9

First Lien Euro Term Facility (139.7 million Euro)
 
157.3

Revolving Facility
 

Total Debt
 
428.2

Less deferred financing costs, net
 
(7.8
)
Less current portion
 
(1.6
)
Long-term Debt
 
$
418.8


Maturities of debt at December 31, 2019 are as follows:
Year Ended December 31,
 
(in millions)
2020
 
$
1.6

2021
 
1.6

2022
 
1.6

2023
 
1.6

2024
 
1.6

Thereafter
 
420.2

 
 
$
428.2


Deferred financing costs represent costs incurred in connection with the issuance or amendment of the Company’s debt agreements. Deferred financing costs are amortized over the terms of the related debt, using the effective interest method, and recognized as a component of interest expense in the consolidated statement of operations and comprehensive income (loss). As a result of the $107.7 million debt payment made in December 2019, the Company accelerated the amortization of approximately $2.0 million of deferred financing costs, which is included in interest expense.
Borrowings under the Facilities, at the Borrowers' option, bear interest at either (1) an adjusted eurocurrency rate or (2) a base rate, in each case plus an applicable margin. The applicable margin is 3.75% with respect to eurocurrency borrowings and 2.75% with respect to base rate borrowings (in each case, assuming a first lien net leverage ratio of less than 5.00:1.00), subject to a leverage-based stepup to an applicable margin equal to 400 basis points for eurocurrency borrowings. The interest rate at December 31, 2019 was 5.46%.
In connection with the debt financing, the Company, entered into a business combination contingent interest rate swap in a notional amount of $200.0 million to hedge part of the floating interest rate exposure under the Facilities. The fixed rate payable under the swap was 2.56%. The interest rate swap became effective and was novated to the Company on the closing date in the amount of $4.7 million to mature on June 3, 2022. On September 25, 2019, the Company entered into two new interest rate swaps, one that lowered the rate on the $200.0 million notional amount to 2.31% and extended the maturity for one year and the second on a new $50.0 million notional amount to 1.50%. Both interest rate swaps have matching maturities of June 1, 2023. The Company was able to apply hedge accounting to both of these swap arrangements the details of which are further explained in Note 11 to the consolidated financial statements.
The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. Any issuance of letters of credit will reduce the amount available under the Revolving Facility.
The Facilities will provide the Borrowers with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $95.0 million and 100% of trailing-twelve months Consolidated EBITDA (as defined in the definitive documentation with respect to the Facilities), plus any voluntary prepayments of the debt financing (and, in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility), plus unlimited amounts subject to the relevant net leverage ratio tests and certain other conditions.
The obligations of (i) the US Borrower under the Facilities and certain of its obligations under hedging arrangements and cash management arrangements are unconditionally guaranteed by Holdings and each existing and subsequently acquired or organized
direct or indirect wholly-owned US organized restricted subsidiary of Holdings (together with Holdings, the “US Guarantors”) and (ii) the Dutch Borrower under the Facilities are unconditionally guaranteed by the US Borrower, the US Guarantors and each existing and subsequently acquired or organized direct or indirect wholly-owned Dutch organized restricted subsidiary of Holdings (the “Dutch Guarantors”, and together with the US Guarantors, the “Guarantors”), in each case, other than certain excluded subsidiaries. The Facilities are secured by (i) a first priority pledge of the equity interests of the Borrowers and of each direct, wholly-owned restricted subsidiary of any Borrower or any Guarantor and (ii) a first priority security interest in substantially all of the assets of the Borrowers and the Guarantors (in each case, subject to customary exceptions), provided that obligations of the US Borrower and US Guarantors under the Facilities were not secured by assets of the Dutch Borrower or any Dutch Guarantor.

The Facilities imposed restrictions that require the Company to comply with or maintain certain financial tests and ratios. Such agreements restrict our ability to, among other things: (i) declare dividends or redeem or repurchase capital stock, including with respect to Class A common stock, (ii) prepay, redeem or purchase other debt, (iii) incur liens, (iv) make loans, guarantees, acquisitions and other investments, (v) incur additional indebtedness, (vi) engage in sale and leaseback transactions, (vii) amend or otherwise alter debt and other material agreements, (viii) engage in mergers, acquisitions and asset sales, (ix) engage in transactions with affiliates and (x) enter into arrangements that would prohibit us from granting liens or restrict our ability to pay dividends, make loans or transfer assets among our subsidiaries. The Company was in compliance with all of its financial covenants as of December 31, 2019.

On February 14, 2020, Ranger Packaging LLC, a Delaware limited liability company (“U.S. Borrower”), Ranpak B.V., (the “Dutch Borrower”; the U.S. Borrower and the Dutch Borrower, the “Borrowers”), Ranger Pledgor LLC, a Delaware limited
liability company (“Holdings”), certain other subsidiaries of Holdings, certain lenders party to Amendment No. 1 (as defined below) and Goldman Sachs Lending Partners LLC (the “Administrative Agent”) entered into the Amendment No. 1 to First Lien Credit Agreement (“Amendment No. 1”) to amend the First Lien Credit Agreement, dated as of June 3, 2019 among the Borrowers, Holdings, the lenders, the issuing banks and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement”).

Among other things, the Amendment No. 1 amends the Credit Agreement such that (x) the requirement of the Borrowers to apply
excess cash flow to mandatorily prepay term loans under the Credit Agreement commences with the fiscal year ending December 31, 2021 (instead of the fiscal year ending December 31, 2020) and (y) the aggregate amount per fiscal year of capital stock of any parent company of the U.S. Borrower that is held by directors, officers, management, employees, independent contractors or consultants of the U.S. Borrower (or any parent company or subsidiary thereof) that the U.S. Borrower may repurchase, redeem, retire or otherwise acquire or retire for value has been increased to the greater of $10,000,000 and 10% of Consolidated Adjusted EBITDA (as defined in the Credit Agreement) (increased from the greater of $7,000,000 and 7% of Consolidated Adjusted EBITDA) as of the last day of the most recently ended four fiscal quarter period for which financial statements have been delivered.
Predecessor
At December 31, 2018, long-term debt consisted of the following (in millions):
 
 
December 31,
 
 
2018
First Lien Term Loan B - United States Dollar based facility with interest based on one month adjusted Eurodollar plus margin. Interest rate was 5.77% at December 31, 2018
 
$
253.6

First Lien Term Loan B - Euro based facility with interest based on one month adjusted EURIBOR plus margin. Interest rate was 4.25% at December 31, 2018
 
172.4

Second Lien US$ Tranche with interest based on one month adjusted Eurodollar plus margin. Interest rate was 9.71% at December 31, 2018
 
80.5

Total Debt
 
506.5

Less deferred financing costs
 
(7.2
)
Less current portion (First Lien)
 
(4.4
)
Long-term Debt
 
$
494.9

At the Closing of the Ranpak Business Combination, Rack Holdings' existing debt, which amounted to approximately $487.6 million, was repaid in full. At the date of the transaction, the remaining $6.3 million of deferred finance costs were written-off.
Amortization and accumulated amortization of deferred financing costs was as follows:
 
 
Successor
 
 
Predecessor
 
 
June 3, 2019 through December 31, 2019
 
 
January 1, 2019
through June 2,
2019
 
December 31,
2018
 
December 31,
2017
Amortization of deferred financing costs
 
$
3.2

 
 
$
7.5

 
$
2.6

 
$
4.5

 
 
 
Successor
 
 
Predecessor
 
 
 
December 31, 2019
 
 
December 31, 2018
 
December 31, 2017
Accumulated amortization of deferred financing costs
 
 
$
3.2

 
 
$
15.5

 
$
12.8