Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

Outstanding long-term debt was as follows:

	December 31, 2022		December 31, 2021
Senior long-term debt:
Senior Secured Credit Facility (stated maturity date October 2024)	$	100,000	$	—
Other debt:
Lines of credit	13,778		10,131
Notes payable and other debt	72,209		102,003
Total senior and other debt	185,987		112,134
Finance lease obligations and sale-leaseback financings	48,186		45,124
Total long-term debt and finance leases	234,173		157,258
Less: total unamortized deferred financing costs	2,060		3,588
Less: current portion of long-term debt and finance leases	56,184		49,082
Long-term debt and finance leases, less current portion	$	175,929	$	104,588

As of December 31, 2022, aggregate annual maturities of the senior and other debt, excluding finance lease obligations and sale-leaseback financings, were as follows:

Years Ended December 31,	Senior and Other Debt
2023	$	50,010
2024	131,355
2025	4,622
2026	—
2027	—
Thereafter	—
Total senior and other debt	$	185,987

Senior Secured Credit Facility

Revolving Credit Facility

Under the Company's Third Amended and Restated Credit Agreement (the Third A&R Credit Agreement), the Company maintains a revolving credit facility (the Senior Secured Credit Facility) that has a borrowing capacity of $410,000 and has a maturity date of October 7, 2024.

On December 23, 2022, the Company entered into the Second Amendment of the Third A&R Credit Agreement. This amendment was done in response to the planned phase out of LIBOR and the only contractual change was to update the reference rate from LIBOR to the Secured Overnight Financing Rate (SOFR). As described in Note 2, Significant Accounting Policies, in connection with this amendment, the Company adopted the optional relief guidance provided under ASU 2020-04, which permits the Company to account for the modification as a continuation of the existing contract without additional analysis.

The Senior Secured Credit Facility bears interest at a per annum interest rate, at the option of the Company, at either the SOFR rate or the ABR rate, as defined in the agreement, plus an applicable margin of 2.50% per annum, 2.25% per annum, 2.00% per annum or 1.75% per annum for Term SOFR loans, and 1.50% per annum, 1.25% per annum, 1.00% per annum or 0.75% per annum for ABR loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the agreement.

The Senior Secured Credit Facility provides for letter of credit commitments in the aggregate amount of $50,000. The Third A&R Credit Agreement also provides, subject to the satisfaction of certain conditions, for incremental revolving and term loan facilities, at the request of the Company, not to exceed (i) the greater of (a) $565,000 and (b) 100% of the consolidated EBITDA of the Company, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, on a pro forma basis, does not exceed 2.75x, plus, (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

As of December 31, 2022 and December 31, 2021, the Senior Secured Credit Facility had a total outstanding balance of $100,000 and $0, respectively. During the fourth quarter of 2022, the Company borrowed on its Senior Secured Credit Facility primarily to fund the repurchase of shares that the Company completed in connection with the November 2022 secondary offering described in Note 11, Share-based Compensation and Equity.

Guarantors of the Senior Secured Credit Facility

Laureate Education, Inc. is the borrower under our Senior Secured Credit Facility. All of Laureate’s required United States legal entities, excluding certain subsidiaries that the Company considers dormant based on the lack of activity, are guarantors of the Senior Secured Credit Facility, and all of the guarantors’ assets, both real and intangible, are pledged as collateral. Additionally, not more than 65% of the shares held directly by Laureate Education, Inc. or any guarantors in non-domestic subsidiaries are pledged as collateral.

Estimated Fair Value of Debt

As of December 31, 2022 and December 31, 2021, the estimated fair value of our debt approximated its carrying value.

Certain Covenants

As of December 31, 2022, our Third A&R Credit Agreement contained certain negative covenants including, among others: (1) limitations on additional indebtedness; (2) limitations on dividends; (3) limitations on asset sales, including the sale of ownership interests in subsidiaries and sale-leaseback transactions; and (4) limitations on liens, guarantees, loans or investments. The Third A&R Credit Agreement provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, to exceed 3.50x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter. The agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, is not greater than 4.75x as of such date and (ii) less than 25% of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply. As of December 31, 2022, these conditions were satisfied and, therefore, we were not subject to the leverage ratio. In addition, indebtedness at some of our locations contain financial maintenance covenants. We were in compliance with these covenants as of December 31, 2022.

Debt Modification and Loss on Debt Extinguishment

In connection with the repayment of the Senior Notes during the year ended December 31, 2021, the Company recorded a Loss on debt extinguishment of $77,940, related to the redemption premium paid and the write off of the unamortized deferred financing costs associated with the repaid debt balances.

In 2020, the Company recorded a Loss on debt extinguishment of $610 related primarily to the write off of a pro-rata portion of the unamortized deferred financing costs associated with repaid debt balances.

Debt Issuance Costs

Amortization of debt issuance costs and accretion of debt discounts that are recorded in Interest expense in the Consolidated Statements of Operations totaled approximately $1,561, $4,628 and $10,103 for the years ended December 31, 2022, 2021 and 2020, respectively. Certain unamortized debt issuance costs were written off in 2021 and 2020 in connection with early repayment of debt balances and debt agreement amendments, as discussed above. As of December 31, 2022 and 2021, our unamortized debt issuance costs were $2,060 and $3,588, respectively.

Other Debt

Lines of Credit

Individual Laureate subsidiaries have the ability to borrow pursuant to unsecured lines of credit and similar short-term borrowing arrangements (collectively, lines of credit). The lines of credit are available for working capital purposes and enable us to borrow and repay until those lines mature. At December 31, 2022 and 2021, the aggregate outstanding balances on our lines of credit were $13,778 and $10,131, respectively. At December 31, 2022, we had approximately $63,700 additional available borrowing capacity under our outstanding lines of credit. At December 31, 2022, interest rates on our lines of credit ranged from 8.10% to 9.34%. At December 31, 2021, interest rates on our lines of credit ranged from 2.30% to 5.99%. Our weighted-average short-term borrowing rate was 8.61% and 2.72% at December 31, 2022 and 2021, respectively.

Notes Payable

Notes payable include mortgages payable that are secured by certain fixed assets. The notes payable have varying maturity dates and repayment terms through 2025. Interest rates on notes payable ranged from 5.09% to 12.26% and 5.09% to 10.25% at December 31, 2022 and 2021, respectively.

In December 2017, Universidad del Valle de México (UVM Mexico) entered into an agreement with a bank for a loan of MXN 1,700,000 (approximately $89,000 at the time of the loan). In 2019, this loan was reassigned to Estrater, S.A. de C.V., SOFOM ENR (Estrater). In 2021, Estrater was merged into Laureate Education Mexico S de RL de CV (LEM), a wholly owned Mexican subsidiary of the Company. Consequently, the loan was reassigned to LEM. The loan matures in June 2024 and carries a variable interest rate based on the 28-day Mexican Interbanking Offer Rate (TIIE), plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement (12.26% and 8.12% as of December 31, 2022 and 2021, respectively). The current quarterly payments on the loan total MXN 72,250 ($3,725 at December 31, 2022) and increase over the remaining term of the loan to MXN 76,500 ($3,944 at December 31, 2022), with a balloon payment of MXN 425,000 ($21,913 at December 31, 2022) due at maturity. As of December 31, 2022 and December 31, 2021, the outstanding balance of this loan was $41,416 and $52,533, respectively.

The Company obtained financing to fund the construction of two new campuses at one of our institutions in Peru, Universidad Peruana de Ciencias Aplicadas (UPC). As of December 31, 2022 and 2021, one loan remains outstanding, which matures in November 2025 and carries an interest rate of 5.09%. Principal payments, plus accrued and unpaid interest, are made semi-annually in April and October. As of December 31, 2022 and 2021, the outstanding balance of this loan was $8,246 and $10,284, respectively.

On December 22, 2017, a Laureate subsidiary in Peru entered into an agreement to borrow PEN 247,500 (approximately $76,000 at the agreement date). The loan bears interest at a fixed rate of 6.62% per annum and matures in December 2023. Quarterly payments in the amount of PEN 14,438 ($3,786 at December 31, 2022) are due through the loan's maturity. As of December 31, 2022 and 2021, this loan had a balance of $15,142 and $29,035, respectively.