v3.22.4
Long-Term Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
Long-term debt consisted of the following:
December 31,
Maturity Date20222021
2027 Term Loans (effective interest rate of 4.3% at December 31, 2022 and 2.4% at December 31, 2021)
August 10, 2027$731.3 $738.8 
2029 Term Loans (effective interest rate of 4.1% at December 31, 2022 and 2.3% at December 31, 2021)
November 10, 20291,770.0 1,782.4 
2027 Senior Notes (effective interest rate of 5.4% at December 31, 2022 and December 31, 2021)
December 1, 2027600.0 600.0 
2029 Senior Notes (effective interest rate of 3.6% at December 31, 2022 and December 31, 2021)
March 1, 2029800.0 800.0 
Revolver
November 10, 2027— — 
Total3,901.3 3,921.2 
Less: unamortized original issue discount and debt issuance costs(1)
(70.2)(38.9)
Less: current portion of long-term debt(18.2)(24.1)
$3,812.9 $3,858.2 
_________________________________
(1) Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the interest method.
Credit Facility
Our secured credit agreement (the Credit Facility) includes two tranches of term loan (the 2027 Term Loans and the 2029 Term Loans, the latter of which refinanced and replaced our previously issued term loans maturing in 2024, as described below) and a revolving credit facility (the Revolver). A portion of the term loans is hedged by interest rate swap agreements, as discussed in Note 11.
The 2027 Term Loans were originally issued in 2020 in an aggregate principal amount of $750.0 million at a 0.5% discount on the face of the note at original issue. The net proceeds of these loans were used to partially fund the payments associated with the settlement of our obligations under certain tax receivable agreements in 2020. In March 2021, we refinanced the 2027 Term Loans to lower the interest rate margins by 0.5% with no changes made to the maturity date or any other terms. Following this refinancing, the 2027 Term Loans bear interest at a rate equal to, at our option, either (a) LIBOR plus 2.0% per annum or (b) 1.0% per annum plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the Prime Rate or (iii) one-month LIBOR plus 1.0%.
In November 2022, we amended our Credit Facility to provide for a new $1,770.0 million tranche of term loans maturing in 2029 (the 2029 Term Loans), the proceeds of which were used to refinance all of the outstanding previously issued term loans maturing in 2024. The 2029 Term Loans were issued at a 2.0% discount on the face of the note at original issue and bear interest at a rate equal to at our option, either (a) Secured Overnight Financing Rate (SOFR) for an interest period of one month plus an initial margin of 3.25% per annum or (b) an initial margin of 2.25% per annum plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the Prime Rate or (iii) SOFR for an interest period of one month plus 1.0%.
In evaluating the above refinancings, we compared the net present value cash flows of the previous instruments and the refinanced instruments to determine whether the terms of the new debt and original instruments were "substantially different" on a creditor-by-creditor basis. In each case, certain of the creditors in the loan syndication did not reinvest in the refinanced debt, and we accounted for their proportionate share of the unamortized original issue discount and deferred financing costs as an aggregate loss on debt extinguishment. As the cash flows for the continuing creditors varied by less than 10% between the old and new instruments, we concluded that the refinancing represented a debt modification. Neither fees incurred nor loss on debt extinguishment recognized in connection with the refinancing of the 2027 Term Loans was material. With respect to the refinancing of the 2029 Term Loans, aggregate fees paid to lenders of $9.3 million were recorded as additional discount, and we recognized a loss on debt extinguishment of $3.3 million.
In November 2022, we also increased the borrowing capacity under our Revolver from $600.0 million to $1,000.0 million under a new revolving credit facility maturing in November 2027. In connection with this transaction, we capitalized aggregate fees of $4.1 million as debt issuance costs as well as recognized a loss on debt extinguishment of $0.3 million. The Revolver bears interest at a rate equal to, at our option, either (a) SOFR plus a margin ranging from 1.25% to 1.75% per annum or (b) the higher of (i) the Federal Funds Rate plus 0.5%, (ii) the Prime Rate or (iii) SOFR for an interest period of one month plus 1.0% plus a margin ranging from 0.25% to 0.75% per annum, with the margins determined based on our first lien secured leverage ratio. The Revolver also contains a financial covenant requiring us to maintain a leverage ratio of 5.75:1.00 when our usage exceeds 40.0% of the maximum capacity. This ratio is calculated as the ratio of first lien secured debt less cash and cash equivalents to consolidated EBITDA (as defined in the Credit Facility).
All LIBOR- and SOFR-based interest rates under the Credit Facility are subject to a 0.0% floor.
Principal payments comprising 0.25% of the initial principal balances of the term loans are due quarterly. In addition to paying interest on the outstanding principal under the term loans, we are required to pay a commitment fee ranging from 0.125% to 0.375% per annum for any unutilized commitments under the Revolver, with the applicable fee determined based on our first lien secured leverage ratio.
Significant terms of the Credit Facility are as follows:
•we are required to prepay outstanding term loans, subject to certain exceptions, with percentages of excess cash flow, proceeds of non-ordinary course asset sales or dispositions of property, insurance or condemnation proceeds and proceeds from the incurrence of certain debt;
•we are restricted by certain covenants, including, among other things, limitations on our ability to incur additional indebtedness, sell assets, incur additional liens, make certain fundamental changes, pay distributions and make certain investments;
•with respect to the Revolver, we are required to maintain certain financial ratios when its usage exceeds 40.0% of the maximum capacity; and
•subject to certain exceptions and exclusions, all obligations are unconditionally guaranteed by all of our wholly-owned, material domestic subsidiaries and are secured by substantially all of our and such subsidiaries real and personal property.
At December 31, 2022, we had $1,000.0 million available for borrowing under the Revolver and were not in violation of any covenants of the Credit Facility.
Senior Notes
In June 2019, we issued the 2027 Senior Notes in an aggregate principal amount of $600.0 million in a private placement offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2027 Senior Notes were issued at par and bear interest at 5.25% per annum, with interest payable semiannually on June 1 and December 1. The aggregate principal amount outstanding is payable at maturity, subject to earlier repurchase or optional redemption as described below.
The 2027 Senior Notes are redeemable at our option, in whole or in part, at an amount equal to 102.625% of the principal amount, decreasing to 101.75% at June 1, 2023, 100.875% at June 1, 2024 and 100.0% at June 1, 2025, plus accrued and unpaid interest. Upon the occurrence of a change of control, we are required to offer to repurchase the 2027 Senior Notes from the holders at a price equal to 101.0% of the principal amount, plus accrued and unpaid interest.
In February 2021, we issued the 2029 Senior Notes in an aggregate principal amount of $800.0 million in a private placement offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2029 Senior Notes were issued at par and bear interest at 3.5% per annum, payable annually on March 1 and September 1. The aggregate principal is payable at maturity, subject to earlier to earlier repurchase or optional redemption as described below. In conjunction with the issuance of the 2029 Senior Notes, we capitalized $9.0 million in debt issuance costs.
The 2029 Senior Notes are redeemable at our option, in whole or in part, any time prior to March 1, 2024 at a redemption price equal to 100.0% of the principal amount, plus accrued and unpaid interest, plus an applicable premium equal to the greater of 1.0% or the remaining scheduled payments of interest discounted to a present value amount. In the event of an
equity offering prior to March 1, 2024, the 2029 Senior Notes may be partially redeemed with the net cash proceeds of such offering at our option at an amount equal to 103.5% of the principal amount, plus accrued and unpaid interest. On and after March 1, 2024, we may redeem the 2029 Senior Notes, in whole or in part, at an amount equal to 101.75% of the principal amount, decreasing to 100.875% at March 1, 2025 and 100.0% at March 1, 2026, plus accrued and unpaid interest. Upon the occurrence of a change of control, we are required to offer to repurchase the Senior Notes from the holders at a price equal to 101.0% of the principal amount, plus accrued and unpaid interest.
Significant terms of the 2027 Senior Notes and 2029 Senior Notes are as follows:
•they are subordinated to our existing secured debt, including the Credit Facility, and any future secured debt we may issue;
•all obligations are unconditionally guaranteed by all of our material domestic subsidiaries;
•we are restricted by certain covenants, including limitations on our ability to incur additional indebtedness, incur additional liens, consolidate with or merge with or into another entity and sell substantially all of our assets; and
•certain covenants may be suspended if we are able to obtain and maintain investment grade ratings and no event of default has occurred.
At December 31, 2022, we were not in violation of any covenants of the 2027 Senior Notes or the 2029 Senior Notes.
Fair Value
The estimated fair values of our long-term debt instruments are based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of December 31, 2022:
2027 Term Loans$725.4 
2029 Term Loans$1,771.1 
2027 Senior Notes$571.0 
2029 Senior Notes$674.0 
Future Debt Maturities
Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of December 31, 2022 are as follows:
Year Ending December 31:
2023$25.2 
202425.2 
202525.2 
202625.2 
20271,319.0 
Thereafter2,481.5 
$3,901.3