Debt

12 Months Ended

Dec. 31, 2022

Debt [Abstract]

Debt

6. Debt

Long-term Debt

Long-term debt consisted of the following unsecured obligations at December 31:

(In thousands)	2022			2021
3.66% senior notes due November 2023	$	75,000		$	75,000
3.65% senior notes due May 2024		27,000			27,000
4.19% senior notes due November 2025		25,000			25,000
1.85% Euro-denominated senior notes due November 2022		-			76,017
3.06% Euro-denominated senior notes due November 2023		40,945			43,487
1.27% Euro-denominated senior notes due May 2024		53,527			56,850
1.71% Euro-denominated senior notes due May 2027		42,822			45,480
2.53% British Pound-denominated notes due November 2023		30,208			33,829
2.76% British Pound-denominated notes due November 2025		30,208			33,829
Euro-denominated term loan		80,291			-
Revolving Credit Facilities		225,469			86,000
Various other notes		622			1,137
Total debt		631,092			503,629
Less debt fees		(260	)		(136	)
Less current portion		(501	)		(487	)
Total long-term debt	$	630,331		$	503,006

In May 2021, the Company executed an amended and restated credit agreement (Credit Agreement) with a syndicate of banks to extend the maturity of Sensient’s $350 million multi-currency revolving credit facility from May 2022 to May 2026 and to modify certain other provisions of the credit agreement as set forth therein. In December 2022, the Company amended the Credit Agreement to, among other things, transition from the London Inter-Bank Offered Rate to: (i) the Secured Overnight Financing Rate (SOFR) as the benchmark rate under the Credit Agreement for borrowings denominated in U.S. dollars and (ii) the Euro Interbank Offered Rate for borrowings denominated in Euros. Borrowings under the revolving credit facility bear interest at a variable rate, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.

In August 2022, the Company amended its accounts receivable securitization program with Wells Fargo Bank N.A. (Wells Fargo) to increase the program amount from $30 million to $85 million. Under the amended program, Wells Fargo has extended a secured loan (Secured Loan) of up to $85 million to the Company secured by Wells Fargo’s undivided interests in certain of the Company’s trade accounts receivables. The interest rate on the Secured Loan is the SOFR as administered by the Federal Reserve Bank of New York plus a 10 basis point Term SOFR Adjustment plus an Applicable Margin of 70 basis points. The Company has the intent and ability either to repay the Secured Loan with available funds from the Company’s existing long-term revolving credit facility or to extend its accounts receivable program with Wells Fargo when it matures. Accordingly, the Secured Loan has been classified as long-term debt on the Company’s Consolidated Balance Sheet and is included with the Revolving Credit Facilities above. As of December 31, 2022, the amount was fully drawn.

In November 2022, the Company entered into a 75 million Euro unsecured term loan (Term Loan) with PNC Bank, N.A (PNC Bank) that matures in November 2024. The Company immediately borrowed the full amount of the Term Loan and used the proceeds to repay the 66.9 million Euro 1.85% senior note that came due in November 2022 and a portion of outstanding borrowings on the Company’s revolving credit facility. The term loan will act as a partial hedge of the Company’s net asset position in Euros. See Note 7, Derivative Instruments and Hedging Activity, for additional information. Borrowings on the Term Loan bear interest at a variable rate, based upon the Eurocurrency Rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below. The average interest rate on the Term Loan was 2.72% for the year ended December 31, 2022.

The borrowings under the revolving credit facility, excluding borrowings on the accounts receivable securitization program, had an average interest rate of 3.01% and 1.33% for the years ended December 31, 2022 and 2021, respectively.

The aggregate amounts of contractual maturities on long-term debt subsequent to December 31, 2022, are as follows:

(In thousands)
Year ending December 31,
2023	$	231,654
2024		160,939
2025		55,208
2026		140,469
2027		42,822
Total long-term debt maturities	$	631,092

The Company had $206.7 million available under the revolving credit facility and $25.5 million available under other lines of credit from several banks at December 31, 2022.

Substantially all of the senior financing obligations contain restrictions concerning interest coverage, borrowings, and investments. The most restrictive loan covenants require a Leverage Ratio less than 3.5 and an Interest Coverage Ratio greater than 3.0, in each case, as defined in the Company’s Credit Agreement. The Company is in compliance with all of these restrictions at December 31, 2022.

The Company had stand-by and trade letters of credit outstanding of $2.8 million as of both December 31, 2022 and 2021.

Short-term Borrowings

The Company’s short-term borrowings consisted of the following items at December 31:

(In thousands)	2022		2021
U.S. credit facilities	$	19,872	$	7,284
Current maturities of long-term debt		501		487
Loans of foreign subsidiaries		-		768
Total	$	20,373	$	8,539

The weighted average interest rates on short-term borrowings were 5.47% and 1.55% at December 31, 2022 and 2021, respectively.