DEBT

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

Natura Revolving Credit Facility

On November 7, 2022, the Company’s subsidiary, Avon Cosmetics Limited entered into a two-year committed intercompany multi-currency revolving credit facility with Natura &Co Luxembourg Holdings S.à r.l., a subsidiary of Natura &Co Holding and an affiliate of the Company, in the amount of $300.0, of which $230.9 was drawn down at March 31, 2023. Borrowings under this facility will be used to reduce short-term financing from third-party banks and will bear interest at a rate per annum of 3% plus the applicable currency benchmark rate.

Related Party Loans

As at March 31, 2023, $702.5 was outstanding under the loan maturing in 2028, which is between Avon Beauty Limited and Natura &Co Luxembourg Holdings S.à r.l. ("Natura &Co Lux Loan"). Avon Beauty Limited is a subsidiary of Avon Cosmetics Limited.

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 $405.0 and $215.0 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 $115.0. This Promissory Note bears interest at a rate per annum of 6.51% and matures on June 28, 2029.

At March 31, 2023, our debt and other financing maturing within one year of include $599.4 of intercompany loans between Natura &Co Luxembourg Holdings S.à r.l. and Avon Products, Inc. affiliates, including $230.9 drawn down under a $300.0 committed intercompany multi-currency revolving credit facility from an affiliate of Natura &Co expiring in November 2024.

Other Short-Term Financing

In addition, at March 31, 2023 and December 31, 2022, we utilized approximately $45.4 and $5.7, respectively, 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 March 31, 2023, 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 March 15, 2023, which was financed by long-term related party loans. 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 second quarter of 2022 consisting of the $15.0 premium paid for the repurchase and $0.7 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 semi-annually on March 15 and September 15 of each year. The indenture governing the 2013 Notes contains interest rate adjustment provisions depending on the 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 0.25% 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 2022 Form 10-K.