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Long-Term Debt
 9 Months Ended
Oct. 01, 2022
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
The following table sets forth the components of long-term debt (in thousands):
SuccessorPredecessor
October 1, 2022December 31, 2021
Effective Interest RatePrincipal Outstanding
Unamortized Fair Value Adjustment(1)
Unamortized Discount and Issuance CostsCarrying AmountPrincipal OutstandingUnamortized Discount and Issuance CostsCarrying Amount
Term loan facility, due April 20288.76 %$2,561,000 $(381,158)$— $2,179,842 $2,580,500 $(37,811)$2,542,689 
Term loan facility, due August 20289.69 %300,000 — (22,295)277,705 — — — 
6.125% Senior Notes, due January 2029
14.04 %400,000 (129,439)— 270,561 500,000 (5,846)494,154 
8.750% Senior Secured Notes, due August 2028
10.61 %710,000 — (54,527)655,473 — — — 
Total long-term debt$3,971,000 $(510,597)$(76,822)$3,383,581 $3,080,500 $(43,657)$3,036,843 
Reflected as:
Current liabilities - Current portion of long-term debt$28,250 $26,000 
Non-current liabilities - Long-term debt3,355,331 3,010,843 
Total long-term debt$3,383,581 $3,036,843 
Fair value - Senior notes - Level 1 $812,523 $531,900 
Fair value - Term loans - Level 22,358,715 2,570,823 
Total fair value$3,171,238 $3,102,723 
(1)    On July 25, 2022, as a result of the pushdown accounting related to the merger, the carrying values of the term loan facility due April 2028 and the 6.125% senior notes were adjusted to fair value.
Revolving Credit Facilities
The following table sets forth the Company’s availability under its credit facilities (in thousands):
SuccessorPredecessor
October 1, 2022December 31, 2021
AvailableBorrowingsLetters of Credit and Priority PayablesAvailableBorrowingsLetters of Credit and Priority Payables
Asset-based lending facility$850,000 $— $48,000 $611,000 $— $45,000 
Cash flow revolver(1)
115,000 — — 115,000 — — 
First-in-last-out tranche asset-based lending facility95,000 — — — — — 
Total$1,060,000 $— $48,000 $726,000 $— $45,000 
(1)     Cash flow revolver commitments of $23 million mature in April 2023 and $92 million mature in April 2026.
Recent Financing Transactions
Merger Transaction
In July 2022, in connection with the merger, the Company:
•Incurred a new $300.0 million aggregate principal amount term loan facility, due in August 2028 (the “Side Car Term Loan Facility”). The Company is required to pay quarterly installments equal to 1.00% per annum of the original principal amount of the Side Car Term Loan Facility. The Side Car Term Loan Facility bears interest at a floating rate measured by reference to, at the Company’s option, either (i) term Secured Overnight Financing Rate (“SOFR”), plus 5.625% (subject to a SOFR floor of 0.50%) or (ii) an alternate base rate plus 4.625%.
•Issued $710.0 million 8.750% Senior Secured Notes due August 2028 (the “Secured Notes”).
•Increased the facility available under the Company’s asset-based, revolving credit agreement (the “ABL Credit Agreement”) from $611.0 million to $850.0 million (the “ABL Facility”), and amended the ABL Credit Agreement to, among other things, extend the maturity of the ABL Facility to July 2027. Loans outstanding under the ABL Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL Facility or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum depending on the average daily excess availability under the ABL Facility.
•Added a first-in-last-out tranche asset-based revolving credit facility of $95.0 million under the ABL Credit Agreement (the “ABL FILO Facility”). The ABL FILO Facility terminates in July 2027. Loans outstanding under the ABL FILO Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 2.25% to 2.75% per annum depending on the average daily excess availability under the ABL FILO Facility or (ii) an alternate base rate plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL FILO Facility.
The proceeds totaling $1.01 billion, together with other sources, were used to purchase all remaining issued and outstanding shares of the Company and related fees to consummate the merger.
The obligations under the Company’s debt agreements are generally guaranteed by each direct and indirect wholly-owned U.S. restricted subsidiary of the Company, subject to certain exceptions. In addition, the obligations of the Canadian borrowers under the ABL Facility are guaranteed by each direct and indirect wholly-owned Canadian restricted subsidiary of the Canadian borrowers, subject to certain exceptions. In addition, the obligations under the term loan facility due April 2028 and the cash flow-based revolving credit facility, together (the “Cash Flow Credit Agreement”), the ABL Credit Agreement, the Side Car Term Loan Facility and the Secured Notes are guaranteed by Camelot Parent, which guarantee is non-recourse and limited to the equity interests of the Company. The obligations under the Cash Flow Credit Agreement, the ABL Credit Agreement, the Side Car Term Loan Facility and the Secured Notes are also secured by a perfected security interest in substantially all tangible and intangible assets of the Company and each subsidiary guarantor and in the capital stock of the Company, subject to certain exceptions and subject to priority of security interests provided therein.
Repurchase of 6.125% Senior Notes
The Company repurchased (i) a principal amount of $10.9 million for $7.3 million in cash in June 2022 and (ii) a principal of $89.1 million for $63.3 million in cash in July 2022, totaling an aggregate principal amount of $100 million of its 6.125% senior notes due January 2029 under a 10b5-1 plan approved by the board of directors. The gain, which included the write-off of associated unamortized debt discount and deferred financing costs, totaled $28.4 million and was recognized as gain on extinguishment of debt in the Consolidated Statements of Income.
Redemption of 8.00% Senior Notes
In April 2021, the Company redeemed the outstanding $645.0 million aggregate principal amount of the 8.00% Senior Notes due April 2026 for $670.8 million. The redemption resulted in a pre-tax loss on extinguishment of debt in the Consolidated Statements of Income of $41.9 million, comprising a make-whole premium of $25.8 million and a write-off of $16.1 million of unamortized debt issuance costs.
Covenant Compliance
The ABL Credit Agreement includes a minimum fixed charge coverage ratio of 1.00:1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the ABL Facility, and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. The Cash Flow Credit Agreement includes a financial covenant set at a maximum secured leverage ratio of 7.75:1.00, which will apply if the outstanding amount of loans and drawings under letters of credit which have not then been reimbursed exceeds a specified threshold at the end of any fiscal quarter.
The Company’s debt agreements contain a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. The Company is in compliance with all of its covenants as of October 1, 2022.
Interest Rate Swaps
The Company uses certain interest rate swaps to manage a portion of the interest rate risk on its term loans. The following table sets forth the terms of the Company’s interest rate swap agreements (amounts in thousands):
May 2019 Swap(1)
April 2021 Swaps
Notional amount$500,000 $1,000,000 
Forecasted term loan interest payments being hedged1-month LIBOR1-month LIBOR
LIBOR floor (per annum - matches floor in hedged item)0 %1 %
Fixed rate paid on $500,000 and $1,500,000 notional amounts
2.1680 %2.0340 %
Fixed rate received on $(500,000) notional amount
n/a(2.1680)%
Start dateJuly 12, 2019April 15, 2021
Maturity - Fixed rate paidJuly 12, 2023April 15, 2026
Maturity - Fixed rate receivedn/aJuly 12, 2023
Fair value at October 1, 2022 - Other current assets$8,084 $— 
Fair value at October 1, 2022 - Other assets$— $98,401 
Fair value at October 1, 2022 - Other current liabilities$— $8,084 
Fair value at December 31, 2021 - Other assets, net$11,543 $— 
Fair value at December 31, 2021 - Other current liabilities$— $13,127 
Fair value at December 31, 2021 - Other long-term liabilities$11,543 $28,279 
Level in fair value hierarchyLevel 2Level 2
(1)The May 2019 swap was de-designated from cash flow hedge accounting in April 2021.