DEBT

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

DEBT

NOTE 14. DEBT

On March 31, 2021, Olin redeemed $315.0 million of the outstanding 10.00% senior notes due 2025 (2025 Notes). The 2025 Notes were redeemed at 105.0% of the principal amount of the 2025 Notes, resulting in a redemption premium of $15.8 million. The 2025 Notes were redeemed by drawing $315.0 million of the Delayed Draw Term Loan along with utilizing $15.8 million of cash on hand.

On January 15, 2021, Olin redeemed the remaining $120.0 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 $2.9 million. The remaining 2023 Notes were redeemed by utilizing $122.9 million of cash on hand.

On February 24, 2021, we entered into a $1,615.0 million senior secured credit facility (Senior Secured Credit Facility) that amended our existing $1,300.0 million senior secured credit facility. The Senior Secured Credit Facility includes a senior secured delayed-draw term loan facility with aggregate commitments of $315.0 million (Delayed Draw Term Loan), a senior secured term loan facility with aggregate commitments of $500.0 million (2020 Term Loan and together with the Delayed Draw Term Loan, the Senior Secured Term Loans) 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 pricing grid for the Senior Secured Credit Facility by reducing applicable interest rates on the borrowings under the facility.

On March 30, 2021, Olin drew the entire $315.0 million of the Delayed Draw Term Loan. The Senior Secured Term Loans include principal amortization amounts payable beginning June 30, 2021 at a rate of 1.25% per quarter through the end of 2022, increasing to 1.875% per quarter during 2023 and 2.50% per quarter thereafter until maturity. The Senior Revolving Credit Facility includes a $100.0 million letter of credit subfacility. At March 31, 2021, 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.

Annual maturities of long-term debt at March 31, 2021, including finance lease obligations, are $31.6 million in 2021, $366.9 million in 2022, $62.1 million in 2023, $753.3 million in 2024, $688.1 million in 2025 and a total of $1,883.0 million thereafter.

For the three months ended March 31, 2021, we recognized interest expense of $4.8 million for the write-off of unamortized deferred debt issuance costs and deferred losses on fair value interest rate swaps related to the partial redemption of the 2025 Notes. For the three months ended March 31, 2021, we paid debt issuance costs of $3.1 million for the amendments to our Senior Secured Credit Facility.

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 March 31, 2021, the only secured borrowings included in the secured leverage ratio were $815.0 million for our Senior Secured Term Loans 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 March 31, 2021, 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 March 31, 2021, there were no covenants or other restrictions that limited our ability to borrow.

Subsequent Event

On April 14, 2021, Olin notified bondholders that we intend to redeem the remaining $185.0 million of the outstanding 2025 Notes. The 2025 Notes are expected to be redeemed at 105.0% of the principal amount of the 2025 Notes, resulting in a redemption premium of $9.3 million. The outstanding 2025 Notes are expected to be redeemed by utilizing cash on hand.