Notes Payable, Long-Term Debt and Other Obligations

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

NOTES PAYABLE, LONG-TERM DEBT AND OTHER OBLIGATIONS

NOTES PAYABLE, LONG-TERM DEBT AND OTHER OBLIGATIONS

Notes payable, long-term debt and other obligations consisted of:

	September 30, 2023		December 31, 2022
Vector:
5.75% Senior Secured Notes due 2029	$	875,000	$	875,000
10.5% Senior Notes due 2026, net of unamortized discount of $1,847 and $2,209	531,936		539,926
Liggett:
Revolving credit agreement	—		22,035
Equipment loans	15		37
Notes payable, long-term debt and other obligations	1,406,951		1,436,998
Less:
Debt issuance costs	(21,437)		(24,672)
Total notes payable, long-term debt and other obligations	1,385,514		1,412,326
Less:
Current maturities	(15)		(22,065)
Amount due after one year	$	1,385,499	$	1,390,261

5.75% Senior Secured Notes due 2029 — Vector:

As of September 30, 2023, the Company was in compliance with all debt covenants related to its 5.75% Senior Secured Notes due 2029.

10.5% Senior Notes due 2026 — Vector:

In March 2023, the Company repurchased in the market $6,660 in aggregate principal amount of its 10.5% Senior Notes outstanding and recorded a loss of $141 associated with the repurchase. In April 2023, the Company repurchased in the market $1,692 in aggregate principal amount of its 10.5% Senior Notes outstanding and recorded a loss of $40 associated with the repurchase. In October 2023, the Company repurchased in the market $6,250 in aggregate principal amount of its 10.5% Senior Notes outstanding and will record a loss of $103 associated with the repurchase. The 10.5% Senior Notes that were repurchased have been retired.

As of September 30, 2023, the Company was in compliance with all debt covenants related to its 10.5% Senior Notes due 2026.

Revolving Credit Agreement — Liggett:

On May 8, 2023, Liggett, 100 Maple LLC (“Maple”) and Vector Tobacco entered into Amendment No. 5 to the Third Amended and Restated Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as agent and lender. The existing credit agreement was amended to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”) as the applicable reference rate and to reduce the unused line fee. Following the amendment, loans under the Credit Agreement will bear interest at a rate equal to, at the borrower’s option, (a) the base rate (which is the highest of (i) 0%, (ii) the federal funds rate plus 0.50%, (iii) the prime rate of Wells Fargo or (iv) Term SOFR for a one month interest period), (b) Term SOFR for the applicable interest period plus 2.25% or (c) Daily Simple SOFR plus 2.25%. The amendment also reduced the unused line fee applicable to the average undrawn commitments to 0.25%, regardless of the amount borrowed under the facility.

As of September 30, 2023, there was no outstanding balance due under the Credit Agreement. Availability, as determined under the Credit Agreement, was approximately $78,900 based on eligible collateral on September 30, 2023. As of September 30, 2023, Liggett, Maple, and Vector Tobacco were in compliance with all debt covenants under the Credit Agreement.

Non-Cash Interest Expense — Vector:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Amortization of debt discount, net	$	124	$	111	$	362	$	324
Amortization of debt issuance costs	1,104		1,036		3,254		3,052
(Gain) loss on repurchase of 10.5% Senior Notes	—		(412)		181		(412)
Total non-cash interest expense	$	1,228	$	735	$	3,797	$	2,964

Fair Value of Notes Payable and Long-Term Debt:

	September 30, 2023				December 31, 2022
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
5.75% Senior Secured Notes due 2029	$	875,000	$	742,796	$	875,000	$	758,993
10.5% Senior Notes due 2026	531,936		534,077		539,926		537,202
Liggett and other	15		15		22,072		22,072
Notes payable and long-term debt	$	1,406,951	$	1,276,888	$	1,436,998	$	1,318,267

Notes payable and long-term debt are recorded on the condensed consolidated balance sheets at amortized cost. The fair value determinations disclosed above would be classified as Level 2 under the fair value hierarchy disclosed in Note 9 if such

liabilities were recorded on the condensed consolidated balance sheets at fair value. The estimated fair value of the Company’s notes payable and long-term debt has been determined by the Company using available market information and appropriate valuation methodologies including the evaluation of the Company’s credit risk. The Company used a derived price based upon quoted market prices and trade activity as of September 30, 2023 to determine the fair value of its publicly-traded notes and debentures. The carrying value of the Credit Agreement is equal to fair value. The fair value of the equipment loans and other obligations was determined by calculating the present value of the required future cash flows. However, considerable judgment is required to develop the estimates of fair value and, accordingly, the estimate presented herein is not necessarily indicative of the amount that could be realized in a current market exchange.