Bank Credit Agreements and Other Short-Term and Long-Term Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Bank Credit Agreements and Other Short-Term and Long-Term Debt

Note 8 – Bank Credit Agreements and Other Short-term and Long-term Debt

Short-term debt

Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $147.9 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants. These credit facilities bear interest at the Taipei Interbank Offered Rate (or similar indices plus a specified margin. Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the various facilities as of December 31, 2023, was approximately $106.8 million, net of $40.7 million advanced under our foreign credit lines and $0.4 million credit used for import and export guarantee.

Long-term debt

On May 26, 2023, the Company, Diodes Holdings UK Limited (the “Foreign Borrower” and, collectively with the Company, the “Borrowers”), and certain subsidiaries of the Company as guarantors, entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”) that amended and restated that certain Second Amended and Restated Credit Agreement dated as of May 29, 2020 (as amended, modified and/or supplemented from time to time prior to the date of the Credit Agreement, the “Existing Credit Agreement”). Certain capitalized terms used in this description of the Credit Agreement have the meanings given to them in the Credit Agreement, which is attached as Exhibit 10.1 to our Current Report on Form 8-K that we filed with the SEC on June 2, 2023.

The Existing Credit Agreement consisted of a term loan with no outstanding balance as of the date of the Credit Agreement and a $225.0 million revolving senior credit facility with nothing drawn as of the date of the Credit Agreement.

The Credit Agreement, which represented a complete amendment and restatement of the Existing Credit Agreement, consists of a Revolving Credit Facility in the amount of $225.0 million, including a swing line sublimit equal to the lesser of $50.0 million and the Revolving Credit Facility, a letter of credit sublimit equal to the lesser of $100.0 million and the Revolving Credit Facility, and an alternative currency sublimit equal to the lesser of $40.0 million and the Revolving Credit Facility. The Borrowers have the option to increase the Revolving Facility and/or incur Incremental Term Loans in an aggregate principal amount of up to $350.0 million. The Revolving Credit Facility bears interest at Term SOFR or similar other indices plus a specified margin. The Credit Agreement contains certain financial and non-financial covenants, including, but not limited to, a maximum Consolidated Leverage Ratio, a minimum Consolidated Interest Coverage Ratio, and restrictions on liens, indebtedness, investments, fundamental changes, dispositions, and restricted payments (including dividends and share repurchases). The Company is permitted to pay dividends up to $75.0 million per fiscal year to our stockholders so long as we have not defaulted at the time of such dividend and no default would result from declaring and paying such dividend. Furthermore, under the Credit Agreement, restricted payments, including dividends and share repurchases, are permitted in certain circumstances, including while the pro forma Consolidated Leverage Ratio is, both before and after giving effect to any such restricted payment, at least 0.25 to 1.00 less than the maximum permitted under the Credit Agreement.

The Revolving Credit Facility matures on May 26, 2028. The Company used a portion of the proceeds available under the Credit Agreement (i) to refinance certain existing indebtedness of the Borrowers and their subsidiaries under the Existing Credit Agreement and (ii) for working capital, capital expenditures, and other general corporate purposes, including, without limitation, financing permitted acquisitions.

Borrowings outstanding as of December 31, 2023 and December 31, 2022, are set forth in the table below:

	December 31,
Description	2023			2022			Interest Rate	Current Amount Maturity
Short-term debt	$	40,685		$	36,280		Various indices plus margin	Various during 2024
Long-term debt
Notes payable to Bank of Taiwan		1,880			2,063		2-yr deposit rate floating plus 0.1148%	June 2033
Notes payable to Bank of Taiwan		1,626			1,628		2-yr deposit rate floating plus 0.082%	September 2025
Notes payable to CTBC Bank		3,252			3,256		TAIBOR 3M plus 0.5%	December 2024
Notes payable to CTBC Bank		13,098			13,840		TAIBOR 3M plus 0.5%	May 2028
Notes payable to E Sun Bank		217			275		1-M deposit rate floating plus 0.08%	July 2027
Notes payable to E Sun Bank		1,325			1,516		1-M deposit rate floating plus 0.08%	July 2027
Notes payable to E Sun Bank		-			3,256		1-M deposit rate floating plus 0.08%	December 2024
Notes payable to HSBC		-			105,000		1M SOFR+Margin	January 2025
Notes payable to HSBC		-			18,558		1M SOFR+Margin	January 2025
Notes Payable to E Sun Bank		-			166		2-yr deposit rate plus annual rate floating	September 2023
Notes Payable to Taishin International Bank		-			43		Annual rate plus cost of capital	April 2023
Notes Payable to Taishin International Bank		-			11		Fixed annual rate	April 2023
Notes Payable to Taishin International Bank		-			217		Fixed annual rate	April 2024
Notes payable to Chang Hwa Bank		-			518		2-yr deposit rate floating plus 1.405% - 1.655%	June-July 2026
Total long-term debt		21,398			150,348
Less: Current portion of long-term debt		(4,419	)		(1,693	)
Less: Unamortized debt-issuance costs		-			(1,185	)
Total long-term debt, net of current portion	$	16,979		$	147,470

The table below sets forth the annual contractual maturities of long-term debt at December 31, 2023:

2024	$	4,419
2025		2,799
2026		1,178
2027		1,159
2028		10,587
2029 and thereafter		1,256
Total long-term debt	$	21,398