Debt

12 Months Ended

Dec. 31, 2020

Credit Facilities

On February 14, 2020, we amended our $2.5 billion Credit Facility to extend its term to February 14, 2025. To strengthen our liquidity position to mitigate the impact of the COVID-19 pandemic (see Note 1), on April 3, 2020, we entered into the $400 million 364 Day Credit Facility, maturing on April 2, 2021. 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 operating capital and general corporate purposes. At December 31, 2020, there were no outstanding commercial paper issuances or borrowings under the Credit Facility, the 364 Day Credit Facility or the uncommitted credit lines.

The Credit Facility and the 364 Day Credit Facility each contain a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period. On October 26, 2020, we amended the Credit Facility and the 364 Day Credit Facility to provide additional flexibility with respect to the Leverage Ratio covenant. The amendments increase the maximum Leverage Ratio to 4.0 times through December 31, 2021 for the Credit Agreement and to 4.0 times through the maturity for the 364 Day Credit Facility. At December 31, 2020, we were in compliance with these covenants as our Leverage Ratio was 3.0 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

At December 31, 2020 and 2019, short-term debt of $3.9 million and $10.1 million, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries. The weighted average interest rate was 3.5% and 2.5%, respectively. Due to the short-term nature of this debt, carrying value approximates fair value.

Long-Term Debt

Long-term debt was (in millions):


	December 31,
	2020		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
€500 Million 0.80% Senior Notes due 2027	611.5		561.4
2.45% Senior Notes due 2030	600.0		—
4.20% Senior Notes due 2030	600.0		—
€500 Million 1.40% Senior Notes due 2031	611.5		561.4

	5,823.0		5,122.8
Unamortized premium (discount), net	(5.1)		0.8
Unamortized debt issuance costs	(27.0)		(20.0)
Unamortized deferred gain from settlement of interest rate swaps	16.4		30.7

	5,807.3		5,134.3
Current portion	—		(602.4)
Long-term debt	$	5,807.3	$	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 and 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 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 and were used for general corporate purposes, which included working capital expenditures, fixed asset expenditures, acquisitions, repayment of commercial paper and short-term debt, refinancing of other debt, or other capital transactions.

The 2.45% Notes and 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.

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. Such 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 denominated 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.

At December 31, 2020, the maturities of our long-term debt were (in millions):


2021	$	—
2022	1,250.0
2023	—
2024	750.0
2025	—
Thereafter	3,823.0
Total principal payments	$	5,823.0

Interest Expense

Interest expense is composed of (in millions):


	Year Ended December 31,
	2020		2019		2018
Long-term debt	$	186.4	$	194.6	$	201.6
Commercial paper	0.9		6.5		9.6
Interest rate swaps	—		6.1		5.2
Amortization of deferred gain on interest rate swaps	(8.1)		(14.8)		(12.9)
Fees	6.5		4.7		5.6


Pension and other interest	36.1		47.2		57.3
	$	221.8	$	244.3	$	266.4