Debt and Credit Agreements

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt and Credit Agreements

Debt and Credit Agreements

On February 22, 2022, the Company amended its Senior Secured Credit Facilities to reset the levels of its net debt to consolidated adjusted EBITDA ratio covenant. As a result of this amendment, the total net debt to consolidated adjusted EBITDA ratio covenant was set at 5.50 for the quarter ending June 30, 2022, and decreases quarterly by 0.25 until reaching 4.00 for the quarter ending December 31, 2023 and thereafter. In addition, upon closing on the divestiture of the former Harsco Rail Segment, the total net debt to consolidated adjusted EBITDA ratio covenant will decrease by an additional 0.25, provided, however, it will not go below 4.00 and a minimum consolidated adjusted EBITDA to consolidated interest charges ratio covenant, which is not to be less than 3.0. At June 30, 2022 the Company was in compliance with these covenants, as the total net debt to consolidated adjusted EBITDA ratio (as defined in the Credit Agreement) was 4.98 and total interest coverage ratio was 3.8.

The Company believes it will continue to maintain compliance with these covenants based on its current outlook. However, the Company’s estimates of compliance with these covenants could change in the future with a continued deterioration in economic conditions or an inability to successfully execute its plans to realize increased pricing and to implement cost reduction initiatives that substantially mitigate the impacts of inflation and other factors adversely impacting its realized operating margins.

In connection with entering into the AR Facility on June 24, 2022, the Company amended its Senior Secured Credit Facilities to increase the permitted maximum outstanding amount of a securitization facility to $150 million and certain other covenants and definitions were modified to facilitate the AR Facility.

In June 2022, the Company repurchased $25.0 million of its 5.75% Senior Notes on the open market at a discount for $22.4 million. The Company recognized a gain on the extinguishment of debt of $2.3 million, net of the write-off of $0.3 million of previously recorded deferred financing costs, in the caption Facility fees and debt-related income (expense) on the Condensed Consolidated Statement of Operations.

Long-term debt consists of the following:

(In thousands)	June 30 2022		December 31 2021
Senior Secured Credit Facilities:
New Term Loan	$	495,000	$	497,500
Revolving Credit Facility	341,000		362,000
5.75% Senior Notes	475,000		500,000
Other financing payable (including finance leases) in varying amounts	26,392		28,389
Total debt obligations	1,337,392		1,387,889
Less: deferred financing costs	(16,583)		(18,217)
Total debt obligations, net of deferred financing costs	1,320,809		1,369,672
Less: current maturities of long-term debt	(17,952)		(10,226)
Long-term debt	$	1,302,857	$	1,359,446