DEBT

12 Months Ended

Dec. 31, 2019

NOTE 13. DEBT



	December 31,
	2019			2018
Notes payable:	($ in millions)
Variable-rate Delayed Draw Term Loan Facility, due 2024 (4.02% at December 31, 2018)	$	—		$	543.0
Variable-rate Recovery Zone bonds, due 2024-2035 (2.85% and 3.67% at December 31, 2019 and 2018, respectively)	103.0			103.0
Variable-rate Go Zone bonds, due 2024 (2.85% and 3.67% at December 31, 2019 and 2018, respectively)	50.0			50.0
Variable-rate Industrial development and environmental improvement obligations, due 2025 (1.70% and 2.52% at December 31, 2019 and 2018, respectively)	2.9			2.9
10.00%, due 2025	500.0			500.0
9.75%, due 2023	720.0			720.0
5.625%, due 2029	750.0			—
5.50%, due 2022	200.0			200.0
5.125%, due 2027	500.0			500.0
5.00%, due 2030	550.0			550.0
Receivables Financing Agreement (See Note 7)	—			125.0
Finance lease obligations	5.3			4.2
Total notes payable	3,381.2			3,298.1
Deferred debt issuance costs	(38.2		)	(34.1		)
Interest rate swaps	(2.2		)	(33.7		)
Total debt	3,340.8			3,230.3
Amounts due within one year	2.1			125.9
Total long-term debt	$	3,338.7		$	3,104.4

On July 16, 2019, Olin issued $750.0 million aggregate principal amount of 5.625% senior notes due August 1, 2029 (2029 Notes), which were registered under the Securities Act of 1933, as amended. Interest on the 2029 Notes began accruing from July 16, 2019 and is payable semi-annually beginning on February 1, 2020. Proceeds from the 2029 Notes were used to redeem the remaining balance of the $1,375.0 million term loan facility of $493.0 million and $150.0 million of the Receivables Financing Agreement.

On July 16, 2019, Olin entered into a new five-year, $2,000.0 million senior credit facility (2019 Senior Credit Facility), which replaces the existing $1,975.0 million senior credit facility. The 2019 Senior Credit Facility includes a senior unsecured delayed-draw term loan facility in an aggregate principal amount of up to $1,200.0 million (Delayed Draw Term Loan Facility). The Delayed Draw Term Loan Facility will be available on a delayed basis in up to three draws to be made on or prior to November 29, 2020. The Delayed Draw Term Loan Facility includes principal amortization amounts payable beginning the quarter ending after the facility is borrowed upon at a rate of 5.0% per annum for the first two years, increasing to 7.5% per annum for the following year and to 10.0% per annum for the last two years. We expect the proceeds from the Delayed Draw Term Loan Facility will be used to redeem the 9.75% senior notes due 2023 and the 10.00% senior notes due 2025 on or about October 15, 2020. The 2019 Senior Credit Facility also includes a senior unsecured revolving credit facility with aggregate commitments in an amount equal to $800.0 million (2019 Senior Revolving Credit Facility), which was increased from $600.0 million. The 2019 Senior Revolving Credit Facility includes a $100.0 million letter of credit subfacility. For the year ended December 31, 2019, we had $796.5 million available under our 2019 Senior Revolving Credit Facility because we had issued $3.5 million of letters of credit. The maturity date for the 2019 Senior Credit Facility is July 16, 2024 at which point all outstanding Delayed Draw Term Loan Facility and 2019 Senior Revolving Credit Facility balances will become due and payable. In December 2019, Olin amended the 2019 Senior Credit Facility which amended the restrictive covenants of the agreement, including expanding the coverage and leverage ratios to be less restrictive over the next two and a half years.

Under the 2019 Senior Credit Facility, we may select various floating rate borrowing options. The actual interest rate paid on borrowings under the 2019 Senior Credit Facility is based on a pricing grid which is dependent upon the leverage ratio as calculated under the terms of the applicable facility for the prior fiscal quarter. The 2019 Senior Credit Facility includes

various customary restrictive covenants, including restrictions related to the ratio of debt to earnings before interest expense, taxes, depreciation and amortization (leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio). Compliance with these covenants is determined quarterly based on operating cash flows. We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of December 31, 2019, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured. In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities. As of December 31, 2019, there were no covenants or other restrictions that would have limited our ability to borrow under these facilities.

For the year ended December 31, 2019, we recognized interest expense of $2.8 million for the write-off of unamortized deferred debt issuance costs related to the replacement of the existing $1,975.0 million senior credit facility, including the redemption of the remaining balance of the $1,375.0 million term loan facility, and the redemption of the remaining balance of and reduction in the borrowing capacity under the Receivables Financing Agreement.

On January 19, 2018, Olin issued $550.0 million aggregate principal amount of 5.00% senior notes due February 1, 2030 (2030 Notes), which were registered under the Securities Act of 1933, as amended. Interest on the 2030 Notes began accruing from January 19, 2018 and is paid semi-annually beginning on August 1, 2018. Proceeds from the 2030 Notes were used to redeem $550.0 million of debt under the $1,375.0 million term loan facility. We recognized interest expense of $2.6 million for the write-off of unamortized deferred debt issuance costs related to this action in 2018.

On March 9, 2017, we entered into a five-year $1,975.0 million senior credit facility, which amended and restated the then existing $1,850.0 million senior credit facility. We recognized interest expense of $1.2 million for the write-off of unamortized deferred debt issuance costs related to this action during 2017. Pursuant to the agreement, the aggregate principal amount under the term loan facility was increased to $1,375.0 million, and the aggregate commitments under the senior revolving credit facility were increased to $600.0 million. In March 2017, we drew the entire $1,375.0 million term loan facility and used the proceeds to redeem the remaining balance of the existing $1,350.0 million senior credit facility of $1,282.5 million and a portion of the $800.0 million Sumitomo Credit Facility (Sumitomo Credit Facility). For the year ended December 31, 2017, we repaid $51.6 million under the required quarterly installments of the $1,375.0 million term loan facility.

On March 9, 2017, Olin issued $500.0 million aggregate principal amount of 5.125% senior notes due September 15, 2027 (2027 Notes), which were registered under the Securities Act of 1933, as amended. Interest on the 2027 Notes began accruing from March 9, 2017 and is paid semi-annually beginning on September 15, 2017. Proceeds from the 2027 Notes were used to redeem the remaining balance of the Sumitomo Credit Facility.

During 2017, the remaining Sumitomo Credit Facility balance of $590.0 million was repaid using proceeds from the $1,975.0 million senior credit facility and the 2027 Notes. We recognized interest expense of $1.5 million related to the write-off of unamortized deferred debt issuance costs related to this action in 2017.

In 2019, we paid debt issuance costs of $16.6 million for the issuance of the 2029 Notes and 2019 Senior Credit Facility. In 2018, we paid debt issuance costs of $8.5 million relating to the 2030 Notes. In 2017, we paid debt issuance costs of $11.2 million relating to the $1,975.0 million senior credit facility and the 2027 Notes.

Pursuant to a note purchase agreement dated December 22, 1997, SunBelt sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G. We refer to these notes as the SunBelt Notes. The SunBelt Notes accrued interest at a rate of 7.23% per annum, payable semi-annually in arrears on each June 22 and December 22. In December 2017, $12.2 million was repaid on these SunBelt Notes. At December 31, 2017, all amounts due under the SunBelt Notes had been repaid.

At December 31, 2019, we had total letters of credit of $68.7 million outstanding, of which $3.5 million were issued under our 2019 Senior Revolving Credit Facility. The letters of credit are used to support certain long-term debt, certain workers compensation insurance policies, certain plant closure and post-closure obligations and certain international pension funding requirements.

Annual maturities of long-term debt, including finance lease obligations, are $2.1 million in 2020, $1.0 million in 2021, $200.7 million in 2022, $720.6 million in 2023, $70.7 million in 2024 and a total of $2,386.1 million thereafter.

In April 2016, we entered into three tranches of forward starting interest rate swaps whereby we agreed to pay fixed rates to the counterparties who, in turn, pay us floating rates on $1,100.0 million, $900.0 million and $400.0 million of our underlying floating-rate debt obligations. Each tranche’s term length was for twelve months beginning on December 31, 2016,

2017 and 2018, respectively. We designated the swaps as cash flow hedges of the risk of changes in interest payments associated with our variable-rate borrowings. In July 2019, we terminated the remaining interest rate swap agreement which resulted in a gain of $1.8 million that was recognized in interest expense for the year ended December 31, 2019. For the years ended December 31, 2019, 2018 and 2017, $4.3 million, $8.9 million and $3.1 million, respectively, of income was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.

In April 2016, we entered into interest rate swaps on $250.0 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to the counterparties who, in turn, pay us fixed rates. In October 2016, we entered into interest rate swaps on an additional $250.0 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to the counterparties who, in turn, pay us fixed rates. We designated the April 2016 and October 2016 interest rate swap agreements as fair value hedges of the risk of changes in the value of fixed-rate debt due to changes in interest rates for a portion of our fixed-rate borrowings. In August 2019, we terminated the April 2016 and October 2016 interest rate swaps which resulted in a loss of $2.3 million that will be deferred as an offset to the carrying value of the related debt and will be recognized to interest expense through October 2025. As of December 31, 2019, $2.2 million of this loss was included in long-term debt in the consolidated balance sheet. For the years ended December 31, 2019 and 2018, $2.6 million and $2.1 million, respectively, of expense and for the year ended December 31, 2017, $2.9 million of income was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.

Our interest rate swaps reduced interest expense by $1.7 million, $6.8 million and $6.1 million in 2019, 2018 and 2017, respectively. The difference between interest paid and interest received is included as an adjustment to interest expense.