DEBT

12 Months Ended

Dec. 31, 2020

NOTE 12. DEBT


	December 31,
	2020		2019
Notes payable:	($ in millions)
Variable-rate Delayed Draw Term Loan secured facility, due 2024 (4.125% at December 31, 2020)	$	500.0	$	—
Variable-rate Recovery Zone secured bonds, due 2024-2035 (3.625% and 2.85% at December 31, 2020 and 2019, respectively)	103.0		103.0
Variable-rate Go Zone secured bonds, due 2024 (3.625% and 2.85% at December 31, 2020 and 2019, respectively)	50.0		50.0
Variable-rate Industrial development and environmental improvement unsecured obligations, due 2025 (0.21% and 1.70% at December 31, 2020 and 2019, respectively)	2.9		2.9
10.00% secured senior notes, due 2025	500.0		500.0
9.75% secured senior notes, due 2023	120.0		720.0
9.50% secured senior notes, due 2025	500.0		—
5.625% secured senior notes, due 2029	750.0		750.0
5.50% unsecured senior notes, due 2022	200.0		200.0
5.125% secured senior notes, due 2027	500.0		500.0
5.00% secured senior notes, due 2030	550.0		550.0
Receivables Financing Agreement (See Note 6)	125.0		—
Finance lease obligations	4.3		5.3
Total notes payable	3,905.2		3,381.2
Deferred debt issuance costs	(37.4)		(38.2)
Unamortized bond original issue discount	(2.2)		—
Interest rate swaps	(1.8)		(2.2)
Total debt	3,863.8		3,340.8
Amounts due within one year	26.3		2.1
Total long-term debt	$	3,837.5	$	3,338.7

On October 15, 2020, Olin redeemed $600.0 million of the outstanding 9.75% senior notes due 2023 (2023 Notes). The 2023 Notes were redeemed at 102.438% of the principal amount of the 2023 Notes, resulting in a redemption premium of $14.6 million, which was recorded to interest expense. The 2023 Notes were redeemed by drawing $500.0 million of the Delayed Draw Term Loan Facility along with utilizing $114.6 million of cash on hand.

On May 19, 2020, Olin issued $500.0 million aggregate principal amount of 9.50% senior notes due June 1, 2025 (2025 Notes). The 2025 Notes were issued at 99.5% of par value, the discount from which is included within long-term debt in the consolidated balance sheets. Interest on the 2025 Notes is payable semi-annually beginning on December 1, 2020. Proceeds from the 2025 Notes were used for general corporate purposes.

On May 8, 2020, we entered into a $1,300.0 million senior secured credit facility (Senior Secured Credit Facility) that amended our existing five-year, $2,000.0 million senior credit facility. The Senior Secured Credit Facility included a senior secured delayed-draw term loan facility with aggregate commitments of $500.0 million (Delayed Draw Term Loan Facility) and a senior secured revolving credit facility with aggregate commitments in an amount equal to $800.0 million (Senior Revolving Credit Facility). The maturity date for the Senior Secured Credit Facility is July 16, 2024. The amendment modified the financial covenants of the Senior Secured Credit Facility to be less restrictive and expanded the permitted use of proceeds of the Delayed Draw Term Loan Facility to include general corporate purposes.

The amendment also requires that the obligations under the Senior Secured Credit Facility be guaranteed by certain of our domestic subsidiaries, which are also guarantors of Olin’s outstanding notes, with the exception of the $200.0 million senior notes due 2022. The obligations under the Senior Secured Credit Facility are also secured by liens on substantially all of Olin’s and the subsidiary guarantors’ personal property (Collateral), other than certain principal properties and capital stock of subsidiaries, and subject to certain other exceptions. The amendment provides that substantially all guarantees under the Senior

Secured Credit Facility and liens on the Collateral may be released when our net leverage ratio is below 3.50 to 1.00 for two consecutive fiscal quarters.

On October 15, 2020, Olin drew the entire $500.0 million of the Delayed Draw Term Loan Facility. The Delayed Draw Term Loan Facility includes principal amortization amounts payable beginning the quarter ending after the facility is fully drawn 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. The Senior Revolving Credit Facility includes a $100.0 million letter of credit subfacility. At December 31, 2020, we had $799.6 million available under our $800.0 million Senior Revolving Credit Facility because we had issued $0.4 million of letters of credit.

Under the Senior Secured Credit Facility, we may select various floating rate borrowing options. The actual interest rate paid on borrowings under the Senior Secured Credit Facility is based on a pricing grid which is dependent upon the net leverage ratio as calculated under the terms of the applicable facility for the prior fiscal quarter. The Senior Secured Credit Facility includes various customary restrictive covenants, including restrictions related to the ratio of secured debt to earnings before interest expense, taxes, depreciation and amortization (secured leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio). The calculation of secured debt in our secured leverage ratio excludes borrowings under the Receivables Financing Agreement, up to a maximum of $250.0 million. As of December 31, 2020, the only secured borrowings included in the secured leverage ratio were $500.0 million for our Delayed Draw Term Loan Facility and $153.0 million for our Go Zone and Recovery Zone bonds. Compliance with these covenants is determined quarterly. We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of December 31, 2020, 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 a result of our restrictive covenant related to the secured leverage ratio, the maximum additional borrowings available to us could be limited in the future. The limitation, if an amendment or waiver from our lenders is not obtained, could restrict our ability to borrow the maximum amounts available under the Senior Revolving Credit Facility and the Receivables Financing Agreement. As of December 31, 2020, there were no covenants or other restrictions that limited our ability to borrow.

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 five-year, $2,000.0 million senior credit facility (2019 Senior Credit Facility), which replaced the existing $1,975.0 million senior credit facility. The 2019 Senior Credit Facility included a senior unsecured delayed-draw term loan facility in an aggregate principal amount of up to $1,200.0 million. The 2019 Senior Credit Facility also included 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 included a $100.0 million letter of credit subfacility. 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.

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.

For the year ended December 31, 2020, we recognized interest expense of $5.8 million for the write-off of unamortized deferred debt issuance costs related to the reduction of commitments under the Senior Secured Credit Facility and partial redemption of the 2023 Notes. 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. For the year ended December 31, 2018, we recognized interest expense of $2.6 million for the write-off of unamortized deferred debt issuance costs related to redemption of $550.0 million of debt under the $1,375.0 million term loan facility.

In 2020, we paid debt issuance costs of $10.3 million for the issuance of the 2025 Notes and amendments to our Senior Secured Credit Facility and Receivables Financing Agreement. 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.

At December 31, 2020, we had total letters of credit of $80.4 million outstanding, of which $0.4 million were issued under our 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, certain international payment obligations and certain international pension funding requirements.

Annual maturities of long-term debt, including finance lease obligations, are $26.3 million in 2021, $351.1 million in 2022, $158.4 million in 2023, $483.3 million in 2024, $1,003.1 million in 2025 and a total of $1,883.0 million thereafter.

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.

Our interest rate swaps increased interest expense by $0.4 million in 2020 and reduced interest expense by $1.7 million and $6.8 million in 2019 and 2018, respectively. The difference between interest paid and interest received is included as an adjustment to interest expense.

Subsequent Event

On January 15, 2021, Olin redeemed the remaining $120.0 million of the outstanding 2023 Notes. The 2023 Notes were redeemed at 102.438% of the principal amount of the 2023 Notes, resulting in a redemption premium of $2.9 million. The remaining 2023 Notes were redeemed by utilizing $122.9 million of cash on hand.