Notes Payable and Indebtedness

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Notes Payable and Indebtedness

Notes Payable and IndebtednessOur borrowings are summarized in the following table:

		September 30, 2023						December 31, 2022
	Maturity	Principal amount		Debt issuance costs and discount*		Carrying value		Principal amount		Debt issuance costs and discount*		Carrying value
Debt maturing within one year:
2026 Term loan (1)	February 8, 2026	$	28.1	$	—	$	28.1	$	28.1	$	—	$	28.1
2029 Term loan (1)	January 18, 2029	4.6		—		4.6		4.6		—		4.6
Total short-term debt		$	32.7	$	—	$	32.7	$	32.7	$	—	$	32.7
Debt maturing after one year:
2026 Term loan (1)	February 8, 2026	$	2,630.6	$	36.8	$	2,593.8	$	2,651.7	$	49.2	$	2,602.5
2029 Term loan (1)	January 18, 2029	448.5		5.6		442.9		451.9		6.5		445.4
Revolving facility (1) (2)	September 11, 2025	114.6		—		114.6		50.3		—		50.3
5.000% Senior unsecured notes (1)	December 15, 2029	460.0		5.4		454.6		460.0		6.0		454.0
Total long-term debt		$	3,653.7	$	47.8	$	3,605.9	$	3,613.9	$	61.7	$	3,552.2
Total debt		$	3,686.4	$	47.8	$	3,638.6	$	3,646.6	$	61.7	$	3,584.9

*Initial debt issuance costs were recorded as a reduction of the carrying amount of the debt and amortized over the contractual term of the debt. Balances represent the unamortized portion of debt issuance costs and discounts.

(1) The 5.000% Senior Unsecured Notes and the Senior Secured Credit Facilities contain certain covenants that limit our ability to incur additional indebtedness and guarantee indebtedness, create liens, engage in mergers or acquisitions, sell, transfer or otherwise dispose of assets, pay dividends and distributions or repurchase capital stock, prepay certain indebtedness and make investments, loans and advances. We were in compliance with these non-financial covenants at September 30, 2023 and December 31, 2022.

(2) The Revolving Facility contains a springing financial covenant requiring compliance with a maximum ratio of first lien net indebtedness to consolidated EBITDA of 6.75. The financial covenant applies only if the aggregate principal amount of borrowings under the Revolving Facility and certain outstanding letters of credit exceeds 35% of the total amount of commitments under the Revolving Facility on the last day of any fiscal quarter. The financial covenant did not apply at September 30, 2023 and December 31, 2022.

Senior Secured Credit Facilities

On January 18, 2022, we amended our credit agreement dated February 8, 2019, specifically related to the Term Loan Facility, to establish Incremental Term Loans in an aggregate principal amount of $460 million with a maturity date of January 18, 2029 ("2029 Term Loan"). We used the proceeds from the 2029 Term Loans to redeem our then-outstanding $420 million in aggregate principal amount of the 6.875% Senior Secured Notes due 2026, inclusive of early redemption premium of $16.3 million, accrued interest and fees and expenses. As a result of the redemption, we recorded a loss on debt extinguishment of $23.0 million as the difference between the settlement payments of $436.3 million and the carrying amount of the debt of $413.3 million, including unamortized debt issuance costs of $6.7 million. The loss was recorded within "Non-operating income (expense)-net" for the nine months ended September 30, 2022. Initial debt issuance costs of $7.4 million related to the 2029 Term Loan were recorded as a reduction of the carrying amount of the term loan and will be amortized over its contractual term.

During the second quarter of 2023, we modified agreements governing our Senior Secured Credit Facility and interest rate swaps to complete the transition of reference rate from LIBOR to SOFR. We utilized the expedients set forth in ASC Topic 848, including those relating to derivative instruments used in hedging relationships. This transition did not result in a financial impact to our consolidated financial statements. Borrowings under the Senior Secured Credit Facilities bear interest at a rate per annum equal to an applicable margin over a LIBOR or Secured Overnight Financing Rate ("SOFR") for the interest period relevant to such borrowing, subject to interest rate floors, and they are secured by substantially all of the Company’s assets.

On July 25, 2023, we amended our credit agreement dated February 8, 2019, specifically related to the Term Loan maturing on February 8, 2026 ("2026 Term Loan"), to reduce the applicable margin by 0.25% overall, resulting in a margin spread of SOFR plus 3.00% per annum.

On July 31, 2023, Moody's Investors Service upgraded our Corporate Family Rating from B2 to B1. As a result, the applicable margin for our term loan debt, including the 2026 Term Loan and the 2029 Term Loan, was reduced by 0.25%.

Other details of the Senior Secured Credit Facilities:

•For the 2029 Term Loan, beginning June 30, 2022, the principal amount is required to be paid down in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount, with the balance being payable on January 18, 2029. The 2029 Term Loan bears interest at a rate per annum equal to 300 and 325 basis points over a SOFR rate for the interest period at September 30, 2023 and December 31, 2022, respectively. The interest rates associated with the outstanding balance of the 2029 Term Loan at September 30, 2023 and December 31, 2022 were 8.317% and 7.573%, respectively. Initial debt issuance costs related to the Term Loan facility were recorded as a reduction of the carrying amount of the Term Loan Facility and are being amortized over the term of the facility.

•For the 2026 Term Loan, beginning June 30, 2020, the principal amount is required to be paid down in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount, with the balance being payable on February 8, 2026. The 2026 Term Loan bears interest at a rate per annum equal to 285 basis points over a SOFR rate, inclusive of the SOFR credit spread adjustment, at September 30, 2023 and 325 basis points over the LIBOR rate at December 31, 2022. The interest rates associated with the outstanding balances of the 2026 Term Loan at September 30, 2023 and December 31, 2022 were 8.167% and 7.639%, respectively.

•For borrowings under the Revolving Facility, the spread, inclusive of the SOFR credit spread adjustment, was 335 basis points and 325 basis points at September 30, 2023 and December 31, 2022, respectively, subject to a ratio-based pricing grid. The aggregate amount available under the Revolving Facility is $850 million. The available borrowings under the Revolving Facility at September 30, 2023 and December 31, 2022 were $735.4 million and $799.7 million, respectively. The interest rates associated with the outstanding balances of the Revolving Facility at September 30, 2023 and December 31, 2022 were 8.506% and 7.574%, respectively. Initial debt issuance costs related to the Revolving Facility were included in "Other non-current assets" on the consolidated balance sheet and amortized over the term of the Revolving Facility.

Other

We were contingently liable under open standby letters of credit and bank guarantees issued by our banks in favor of third parties totaling $11.1 million at September 30, 2023 and $11.8 million at December 31, 2022.

We entered into interest rate swaps and cross currency interest rate swaps, with various maturity dates, in order to manage the impact of interest rate changes. As of September 30, 2023, we had interest rate swap contracts and cross-currency interest rate contracts with an aggregate notional amount of $2,750 million and $375 million, respectively. As of December 31, 2022, we had interest rate swap contracts and cross-currency interest rate contracts with an aggregate notional amount of $1,250 million and $375 million, respectively. See Note 13 for more detailed discussion.