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LONG-TERM DEBT

6 Months Ended

Jun. 30, 2020

NOTE 5 – LONG-TERM DEBT

The Company’s long-term debt consisted of the following:

In millions
	June 30, 2020		December 31, 2019
$1.2 billion Senior Credit Facility, due in 2022	$	621.5	$	758.7
$1.3 billion Term Loan, due in 2022		784.2		1,172.2
$600 million Senior Notes, due 2024		600.0		600.0
Promissory notes and deferred consideration weighted average maturity 2.2 years at 2020 and 2.5 years at 2019		56.1		73.1
Foreign bank debt weighted average maturity 1.4 years at 2020 and 1.6 years at 2019		37.3		42.2
Obligations under finance leases		27.5		30.4
Total debt		2,126.6		2,676.6
Less: current portion of total debt		114.6		103.1
Less: unamortized debt issuance costs		13.3		14.2
Long-term portion of total debt	$	1,998.7	$	2,559.3

The estimated fair value of our debt approximated $2.16 billion and $2.73 billion as of June 30, 2020 and December 31, 2019, respectively. These fair value amounts were estimated using an income approach by applying market interest rates for comparable instruments and developed based on inputs classified as Level 2 within the fair value hierarchy.

On February 25, 2020, the Company executed a Fifth Amendment, which amended the Credit Agreement to, among other things:

•	increase the maximum allowable Consolidated Leverage Ratio to 5.00 to 1.00 until December 31, 2021 and 4.50 to 1.00 thereafter.

•	upon the consummation of the divesture of the Domestic Environmental Solutions business Disposal Group, each of the foregoing maximum permitted Consolidated Leverage Ratio levels were reduced to 4.75 to 1.00 until December 31, 2021 and 4.25 to 1.00 thereafter.

•	allow for continuation of the $200 million of cash add backs to EBITDA through December 31, 2020, and addbacks of $100 million until December 31, 2021, with no further addbacks thereafter.

•	increase the leverage ratio pricing tier of greater than 4.50 to 1.00 by 0.125%.

•	grant a first-priority security interest to the administrative agent for the benefit of the lenders in substantially all of the personal property of the Company and certain of its material domestic subsidiaries, including certain equity interests held by those entities.

In the six months ended June 30, 2020 and in connection with the Fifth Amendment, the Company incurred issuance costs of $1.7 million, of which $0.4 million has been charged to Interest expense, net. The remainder was capitalized as unamortized debt issuance costs and is being amortized to Interest expense, net over the remaining term of the Credit Agreement.

The Company may make prepayments against the amended Senior Credit Facility, in whole or in part, without premium or penalty. The Company would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions. In April 2020, with the net proceeds generated from the divestiture of the Domestic Environmental Solutions business, the Company made principal repayments of approximately $430.0 million, which excludes certain transaction costs, final working capital adjustments, or other adjustments associated with the divestiture.

As of June 30, 2020, the Company was in compliance with its Consolidated Leverage Ratio covenant, with an actual ratio of 3.89 to 1.00, which was below the allowed maximum ratio of 4.75 to 1.00 as set forth in the Fifth Amendment. On April 6, 2020, the Company completed the divestiture of the Domestic Environmental Solutions business. Therefore, effective April 6, 2020, the Consolidated Leverage Ratio decreased by 0.25 to 4.75 to 1.00 for fiscal quarters ending on or before December 31, 2021 and 4.25 to 1.00 for fiscal quarters ending on or after March 31, 2022.

Given our current leverage position, we believe that we should be able to operate within our covenant thresholds, but due to the unpredictability of the COVID-19 pandemic and situations outside our control, it is reasonably likely that the Company could exceed this Consolidated Leverage Ratio threshold at some point in the next 12 months. This risk can be mitigated and potentially managed through appropriate spending controls, divestitures, restructuring the Company’s existing indebtedness, amending the Credit Agreement, or seeking temporary relief from the Consolidated Leverage Ratio covenant from the Company’s lenders.

A failure to comply with these provisions could result in an event of default. Upon an event of default, unless waived, the lenders could elect to terminate their commitments, cease making further loans, and/or cause their loans to become due and payable in full, foreclose against the assets securing the debt under our Credit Agreement and force us and our subsidiaries into bankruptcy or liquidation.

In the second quarter 2019, the Company completed the following transactions:


	a)	Issued $600.0 million at par of aggregate principal Senior Notes, due July 2024, In connection with the issuance of the Senior Notes the Company incurred $7.1 million of direct issuance costs, which have been capitalized in unamortized debt issuance costs and are being amortized to Interest expense, net over the term of the Senior Notes.

Executed the Fourth Amendment which amended the Credit Agreement. In connection with the Fourth Amendment, the Company incurred issuance costs of $2.0 million, of which $0.2 million

had been charged to Interest expense, net and the remainder capitalized as unamortized debt issuance costs and are being amortized to Interest expense, net over the remaining term of the Credit Agreement.

Repaid in full $1.075 billion of the outstanding private placement notes using the net proceeds from the Senior Notes and the incremental Term Loan together with additional borrowings under the Senior Credit Facility. In connection with the repayment of the private placement notes, the Company incurred a loss on early extinguishment of debt of $23.1 million comprising make whole premiums, payable under the terms of certain of the private placement notes, of $20.4 million and the write-off of $2.7 million of unamortized debt issuance costs associated with the private placement notes.

Amounts committed to outstanding letters of credit and the unused portion of the Company’s Senior Credit Facility were as follows:

In millions
	June 30, 2020		December 31, 2019
Outstanding letters of credit under Senior Credit Facility	$	83.0	$	33.0
Unused portion of the Senior Credit Facility		495.5		408.3