DEBT

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

DEBT

DEBT

Natura Revolving Credit Facility

In May 2020, the Company’s subsidiary, Avon Luxembourg entered into a Revolving Credit Facility Agreement with Natura &Co International S.à r.l., a subsidiary of Natura &Co Holding and an affiliate of the Company, in the initial amount of $100, increased to $250 in March 2021, which could be used for working capital and other general corporate purposes. Borrowings under this Facility bore interest at a rate per annum of LIBOR plus a margin determined on an arm's length basis, and the Facility was to mature on May 31, 2022. On July 1, 2021, the Company sold Avon Luxembourg to a subsidiary of Natura &Co Holding and therefore Company no longer has access to this facility.

Other Loans from Affiliates of Natura &Co

In November 2020, Avon International Operations, Inc. ("AIO") entered into a Promissory Note with a subsidiary of Natura &Co Holding and an affiliate of the Company in the amount of $960. The Promissory Note bears interest at a rate per annum of 3.13% and matures on November 2, 2022. On July 1, 2021, as part of the sale of Avon Luxembourg to a subsidiary of Natura &Co Holding, the $960 loan was partially repaid with the proceeds from a loan maturing in 2028. The loan was fully repaid in the quarter ended June 30, 2022 as part of a refinancing and the subsequent repurchase of Unsecured Notes (see below). As at June 30, 2022, $682 was outstanding under the loan maturing in 2028 which is between Avon Beauty Limited and a subsidiary of Natura &Co Holding.

In May 2022, Avon Products, Inc and Avon Cosmetics Limited entered into Promissory Notes with a subsidiary of Natura &Co Holding in the amount of $405 and $215 respectively. The Promissory Notes bear interest at a rate per annum of 6.71% and mature on May 17, 2029. In addition, in June 2022 Avon Cosmetics Limited entered into an additional Promissory Note with a subsidiary of Natura &Co Holding in the amount of $115. This Promissory Note bears interest at a rate per annum of 6.51% and matures on June 28, 2029.

In addition, loans from affiliates of Natura &Co Holding at June 30, 2022 of $1,687.5 includes a number of intercompany loans between Natura &Co Luxembourg, Natura Cosméticos and Avon Products, Inc. affiliates.

Other Short-Term Financing

In addition, at June 30, 2022, we utilized approximately $32 of short-term financing from third-party banks across multiple markets.

Unsecured Notes

In March 2013, we issued a series of unsecured notes (the "2013 Notes"). As of June 30, 2022, following the repurchase of the 5% Notes due March 15, 2023 (see below), $216.1 aggregate principal amount of 6.95% Notes due March 15, 2043 remained outstanding.

In May 2022, we repurchased $461.9 of our 5% Notes due 15 March, 2023. The aggregate repurchase price was equal to the principal amount of the notes, plus a premium of $15.0 and accrued interest of $5.4. In connection with the repurchase, we incurred a loss on extinguishment of debt of $15.7 before tax in the quarter ended June 30, 2022 consisting of the $15.0 premium paid for the repurchase and $.7 for the write-off of debt issuance costs and discounts related to the initial issuance of the notes that were repurchased.

Interest on the 2013 Notes is payable semiannually on March 15 and September 15 of each year. The indenture governing the 2013 Notes contains interest rate adjustment provisions depending on the long-term credit ratings assigned to the 2013 Notes by S&P and Moody’s. As described in the indenture, the interest rates on the 2013 Notes increase or decrease by .25% for each one-notch movement below investment grade on each of the credit ratings assigned to the 2013 Notes by S&P or Moody's. These adjustments are limited to a total increase of 2% above the respective interest rates in effect on the date of issuance of the 2013 Notes.

For a more detailed description of the Company’s debt agreements, refer to Note 7, Debt and Other Financing of our Annual Report on Form 10-K for the year ended December 31, 2021.