Debt

3 Months Ended

Mar. 31, 2020

Credit Facilities

On February 14, 2020, we amended our $2.5 billion Credit Facility to extend the term to February 14, 2025. In addition, we have uncommitted credit lines aggregating $1.1 billion and the ability to issue up to $2 billion of commercial paper. These facilities provide additional liquidity sources for working capital and general corporate purposes. At March 31, 2020, there were no outstanding commercial paper issuances or borrowings under the Credit Facility, or the uncommitted credit lines.

On April 3, 2020, to strengthen our liquidity in response to the impact on global economic conditions of the COVID-19 pandemic (see Note 1), we entered into the $400 million 364 Day Credit Facility, expiring on April 2, 2021.

The Credit Facility and the 364 Day Credit Facility contain a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA of no more than 3.5 times for the most recently ended 12-month period (EBITDA is defined as earnings before interest, taxes, depreciation, amortization and non-cash charges). With respect to the Credit Facility, at March 31, 2020, we were in compliance with this covenant as our Leverage Ratio was 2.1 times. The Credit Facility and the 364 Day Credit Facility do not limit our ability to declare or pay dividends or repurchase our common stock.

Short-Term Debt

Short-term debt at March 31, 2020 and December 31, 2019 of $10.9 million and $10.1 million, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries. Due to the short-term nature of this debt, carrying value approximates fair value.

Long-Term Debt

Long-term debt was (in millions):


	March 31, 2020		December 31, 2019
4.45% Senior Notes due 2020	$	—	$	600.0
3.625% Senior Notes due 2022	1,250.0		1,250.0
3.65% Senior Notes due 2024	750.0		750.0
3.60% Senior Notes due 2026	1,400.0		1,400.0
0.80% Euro Notes due 2027	547.0		561.4
2.45% Senior Notes due 2030	600.0		—

1.40% Euro Notes due 2031	547.0		561.4

	5,094.0		5,122.8
Unamortized premium (discount), net	(1.4)		0.8
Unamortized debt issuance costs	(24.2)		(20.0)
Unamortized deferred gain from settlement of interest rate swaps	25.0		30.7
	5,093.4		5,134.3
Current portion	—		(602.4)
Long-term debt	$	5,093.4	$	4,531.9

On February 19, 2020, we issued $600 million of the 2.45% Notes. The net proceeds from the issuance, after deducting the underwriting discount and offering expenses, were $592.6 million. The 2.45% Notes are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness. The net proceeds from the issuance were used to redeem the remaining $600 million principal amount of the 2020 Notes, on March 23, 2020. In connection with the redemption of the 2020 Notes, we recorded a loss on extinguishment of $7.7 million in interest expense. Following the redemption, there were no 2020 Notes outstanding.

Additionally, to strengthen our liquidity and financial position and with the intention to mitigate the potential impact of the COVID-19 pandemic, on April 1, 2020, we issued $600 million of the 4.20% Notes. The net proceeds from the issuance, after deducting the underwriting discount and offering expenses, were $592.5 million. The 4.20% Notes are senior unsecured

obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness. The net proceeds from the issuance will be used for general corporate purposes, which could include working capital expenditures, fixed asset expenditures, acquisitions, repayment of commercial paper and short-term debt, refinancing of other debt, or other capital transactions.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the senior notes due 2022, 2024 and 2026. These notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI’s obligations with respect to the notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets primarily consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries, and the related interest receivable. There are no restrictions on the ability of OCI or Omnicom to obtain funds from our subsidiaries through dividends, loans or advances. The notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of Omnicom Finance Holdings plc, or OFHP, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the Euro notes due 2027 and 2031. OFHP’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, which provide funding for various operating companies in Europe, Brazil, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom, OCI or OFHP to obtain funds from their subsidiaries through dividends, loans or advances. The Euro denominated notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFHP and each of Omnicom and OCI, respectively.