Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

Note 11. Debt

Debt at December 31, 2021 and 2020 consisted of the following:

	2021			2020
Borrowings under the ABL Credit Facility	$	32.0		$	—
8.875% debentures due April 15, 2021		—			55.6
7.000% notes due February 15, 2022		—			79.3
6.500% notes due November 15, 2023		75.0			75.0
Term Loan due January 15, 2024 (a)		149.4			535.8
6.000% notes due April 1, 2024		61.7			61.7
6.125% notes due November 1, 2026		451.0			—
8.250% notes due July 1, 2027		245.8			245.8
6.625% debentures due April 15, 2029		103.4			103.4
8.500% notes due April 15, 2029		303.5			301.6
8.820% debentures due April 15, 2031		54.5			54.5
Unamortized debt issuance costs		(10.0	)		(9.6	)
Total debt		1,466.3			1,503.1
Less: current portion					61.1
Long-term debt	$	1,466.3		$	1,442.0

(a)  As of December 31, 2021 and 2020, the interest rate on the Term Loan due January 15, 2024 was 5.10% and 5.15%, respectively.

The fair values of the senior notes and debentures, which were determined using the market approach based upon quoted prices or interest rates available to us for debt obligations with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of our total debt was greater than its book value by approximately $339.8 million and $142.9 million at December 31, 2021 and 2020, respectively.    

On December 15, 2021, we redeemed the remaining $79.3 million aggregate principal outstanding of the 7.00% notes due 2022 (the “2022 Notes”) using borrowings under our ABL Credit Facility. The redemption price included a premium of $0.8 million.

On April 28, 2021, we completed an offering of $400.0 million aggregate principal amount of 6.125% senior secured notes due 2026 (the “Secured Notes”) at par. On May 10, 2021, we completed an additional $50.0 million offering of the Secured Notes that were issued at a $1.1 million premium, increasing the aggregate principal amount of the Secured Notes to $450.0 million. The Secured Notes are general senior secured obligations of the Company and are guaranteed by our domestic, wholly-owned subsidiaries that are guarantors of the ABL Credit Facility and Term Loan (the “Guarantors”). Interest on the Secured Notes is payable semi-annually on May 1 and November 1 of each year, commencing on November 1, 2021. The Secured Notes mature on November 1, 2026. The proceeds from the offerings of the Secured Notes were used to repay $387.6 million of principal outstanding under our Term Loan and to reduce the outstanding balance under our senior secured asset-based revolving credit facility (the “ABL Credit Facility”), including the amount borrowed for repayment of the $55.6 million principal outstanding of the 8.875% Debentures that matured on April 15, 2021.

On April 16, 2021, we amended our ABL Credit Facility to, among other things, extend the maturity date from September 29, 2022 to April 16, 2026 and reduce the aggregate commitments from $800.0 million to $650.0 million.

During the year ended December 31, 2020, we executed various transactions that reduced our near-term maturities and extended our debt maturity profile. During this period, we repurchased on the open market $98.5 million aggregate principal of debt maturing in 2020, 2021, and 2022, including $1.3 million of the 7.625% notes due 2020 (the “2020 Notes”), $67.6 million aggregate principal of 7.875% notes due 2021 (the “2021 Notes”), $1.3 million aggregate principal of the 8.875% debentures due 2021 (the “2021 Debentures”), and $28.3 million aggregate principal of the 2022 Notes using available cash. These repurchases included a cumulative premium of $0.9 million.  

On December 4, 2020, we redeemed the remaining $83.3 million aggregate principal outstanding of the 2021 Notes using a combination of available cash and a borrowing under our ABL Credit Facility. The redemption price included a premium of $1.7 million.

On June 18, 2020, we completed a public exchange transaction in which we exchanged $246.2 million aggregate principal amount of the Company’s debt held by various investors maturing between 2021 and 2024 (the “Old Debt”) for $244.9 million aggregate principal amount of newly issued unsecured 8.25% notes due 2027 (the “New 2027 Notes”). The Old Debt that was exchanged consisted of $16.4 million of the 2021 Notes; $3.3 million of the 2021 Debentures; $25.8 million of the 2022 Notes; $161.6 million of the 6.500% notes due 2023 (the “2023 Notes”); and $39.1 million of the 6.000% of notes due 2024 (the “2024 Notes”). Other than the interest rate, the terms of the New 2027 Notes are substantially similar to the terms of the Old Debt. We treated the transaction as a debt modification, which resulted in a premium on the New 2027 Notes of approximately $1.0 million.

In March 2020, we entered into privately negotiated agreements with the largest holder of our outstanding notes (the “Holder”) to extend a significant portion of the Company’s 2023 and 2024 maturities. The agreements included the exchange of $277.0 million aggregate principal amount of notes owned by the Holder, consisting of $54.0 million of the 2023 Notes, $177.4 million of the 2024 Notes, and $45.6 million of the 6.625% debentures due 2029 (the “2029 Debentures”) for $297.0 million aggregate principal amount of newly issued unsecured 8.50% notes due 2029 (the “New 2029 Notes”). Other than the interest rate, the terms of the New 2029 Notes are substantially similar to the terms of the 2029 Debentures. We treated the transaction as a debt modification, which resulted in a discount on the New 2029 Notes of approximately $20 million, inclusive of approximately $0.3 million of fees paid to the Holder. The exchange was executed in a series of transactions that were completed on April 8, 2020. The agreements also included the repurchase of $6.6 million of the 2022 Notes and $20.0 million of the 2024 Notes. These repurchases were completed in March and were funded with a draw from our ABL Credit Facility. We recorded a gain of $0.2 million on these repurchases.

In May 2020, we entered into an additional agreement with the Holder in which the Holder agreed to exchange approximately $9.0 million aggregate principal amount of the 2029 Debentures and $14.5 million aggregate principal amount of 8.820% Debentures due 2031 for approximately $21.2 million aggregate principal amount of New 2029 Notes. This transaction was completed on June 19, 2020. We treated the transaction as a debt modification, which resulted in a premium on the New 2029 Notes of approximately $2.1 million, inclusive of $0.2 million of fees paid to the Holder.

During the year ended December 31, 2019, we repurchased on the open market $23.4 million and $20.7 million in aggregate principal amount of the 2021 Notes and 2021 Debentures, respectively. We recorded a loss on debt extinguishment of $0.8 million in 2019 on these repurchases. 

The amount available to be borrowed under the ABL Credit Facility is equal to the lesser of (a) $650.0 million and (b) a borrowing base formula based on the amount of accounts receivable, inventory, machinery, equipment and, if we were to so elect in the future subject to the satisfaction of certain conditions, fee-owned real estate of ours and our material domestic subsidiaries, subject to certain eligibility criteria and advance rates (collectively, the “Borrowing Base”). The aggregate amount of real estate, machinery and equipment that can be included in the Borrowing Base formula cannot exceed $175.0 million.

Borrowings under the ABL Credit Facility bear interest at a rate dependent on the average quarterly availability and is calculated according to a base rate (except in certain circumstances, based on the prime rate) or a Eurocurrency rate (except in certain circumstances, based on LIBOR) plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to 0.75% and the applicable margin for Eurocurrency loans ranges from 1.25% to 1.75%. In addition, a fee is payable quarterly on the unused portion of the total commitments. This fee accrues at a rate of either 0.25% or 0.375% depending upon the average usage of the facility. Borrowings under the ABL Credit Facility may be used for working capital and general corporate purposes.

Based on our Borrowing Base as of December 31, 2021 and existing borrowings, we had approximately $550.7 million of borrowing capacity available under the ABL Credit Facility. The weighted average interest rate on borrowings under our ABL Credit Facility was 1.5%, 1.7%, 3.7% for the years ended December 31, 2021, 2020 and 2019, respectively.

Our obligations under the ABL Credit Facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of ours and the Guarantors, including, only to the extent included in the Borrowing Base, real property, in each case subject to certain exceptions and exclusions. The assets of ours and the Guarantors consisting of accounts receivable, inventory, deposit accounts, securities accounts, machinery and equipment and, to the extent related to the foregoing, general intangibles, documents and instruments, as well as 65% of the equity interests of our first-tier foreign subsidiaries (collectively, the “ABL Priority Collateral”), secure our obligations and the obligations of the Guarantors under the ABL Credit Facility and the related guarantees on a first-priority basis, and all other collateral other than the ABL Priority Collateral secures our obligations and the obligations of the Guarantors under the ABL Credit Facility on a second-priority basis, in each case, subject to permitted liens.

Our obligations under the Term Loan Credit Agreement and the Secured Notes are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of ours and the Guarantors, including certain material real property, subject to certain exceptions and exclusions. The ABL Priority Collateral secures our obligations and the obligations of the Guarantors under the Term Loan Credit Agreement and the Secured Notes and related guarantees on a second-priority basis, and all other collateral other than the ABL Priority Collateral secures our obligations and the obligations of the Guarantors under the Term Loan Credit Agreement and the Secured Notes and related guarantees on a first-priority basis, in each case, subject to permitted liens.

The credit agreements for our ABL Credit Facility (the “ABL Credit Agreement”) and Term Loan (the "Term Loan Credit Agreement"), and the indenture for the Secured Notes (the “Secured Notes Indenture”) contain customary affirmative and negative covenants including negative covenants restricting, among other things, our ability to incur or guarantee debt, or issue preferred stock, make certain loans or investments, make certain restricted payments (including payments on certain other debt, external dividends, and stock repurchases), incur liens securing other debt, consummate certain fundamental transactions, enter into certain transactions with affiliates and consummate asset sales. The ABL Credit Agreement contains a covenant which requires us to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if availability under the ABL Credit Facility declines below certain levels. The Term Loan Credit Agreement and the Secured Notes Indenture require that the net cash proceeds of significant asset sales be used to prepay the Term Loan and purchase the Secured Notes to the extent that the net cash proceeds are not used for reinvestment in assets useful to our business, certain acquisitions and investments, repayment of certain borrowings under our ABL Credit Facility or to reduce, prepay, repay or purchase certain indebtedness, in each case, subject to certain restrictions and limitations set forth in the Term Loan Credit Agreement and the Secured Notes Indenture.

As of December 31, 2021, we had $32.0 million of outstanding borrowings and $67.3 million of letters of credit issued under the ABL Credit Facility. We also had $143.4 million in other uncommitted credit facilities, primarily outside the U.S. (the “Other Facilities”), of which we had $111.9 million in outstanding letters of credit, bank guarantees and bank acceptance drafts.

At December 31, 2021, the future maturities of debt were as follows:

	Amount
2022		—
2023		75.0
2024		211.7
2025		—
2026		482.0
2027 and thereafter		721.3
Total (a)	$	1,490.0

(a) Excludes unamortized debt issuance costs of $10.0 million and $13.7 million of bond discount which do not represent contractual commitments with a fixed amount or maturity date.

Interest expense

The following table summarizes interest expense included in the Consolidated Statements of Operations:

	2021		2020		2019
Interest incurred	$	130.9	$	138.6	$	155.7
Less: interest income		1.5		1.5		2.7
Less: interest capitalized as property, plant and equipment		1.8		2.0		2.4
Interest expense, net	$	127.6	$	135.1	$	150.6

Interest paid was $114.4 million, $125.8 million and $158.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.