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DEBT
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
DEBT DEBT
In connection with the Spin, Fortrea incurred indebtedness in an aggregate principal amount of approximately $1,640.0, which consisted of borrowings under senior secured term loan facilities and senior secured notes. Fortrea also entered into a $450.0 senior secured revolving credit facility. Fortrea used the proceeds from these debt transactions to make a cash distribution to Labcorp as consideration for the assets that were contributed to the Company in connection with the Spin.
The current portion of long-term debt at March 31, 2024 and December 31, 2023 consisted of the following:
March 31, 2024December 31, 2023
Current portion of senior secured term loan A facility due 2028$25.0 $25.0 
Current portion of senior secured term loan B facility due 20305.7 5.7 
Revolving credit facility
29.0 — 
Debt issuance discount and fees(4.7)(4.6)
Total short-term borrowings and current portion of long-term debt$55.0 $26.1 
Long-term debt at March 31, 2024 and December 31, 2023 consisted of the following:
March 31, 2024December 31, 2023
7.5% senior notes due 2030
$570.0 $570.0 
Senior secured term loan A due 2028456.3 462.5 
Senior secured term loan B due 2030560.0 561.5 
Debt issuance discount and fees(26.9)(28.1)
Total long-term debt$1,559.4 $1,565.9 
Senior Notes
On June 27, 2023, the Company issued $570.0 aggregate principal amount of 7.50% senior notes due 2030 (the “Notes”). Interest on these notes is payable semi-annually on January 1 and July 1 of each year. Net proceeds from the offering of the Notes were $560.2 after deducting expenses of the offering.
Credit Facilities
On June 30, 2023, Fortrea entered into a credit agreement (the “Credit Agreement”) providing for (i) a senior secured revolving credit facility in the principal amount of up to $450.0; (ii) a five-year $500.0 first lien senior secured term A loan facility; and (iii) a seven-year $570.0 first lien senior secured term B loan facility. The initial revolving facility includes a $75.0 swingline sub-facility and a $75.0 letter of credit sub-facility.
The Company drew on the term A and term B loans on June 30, 2023. The net proceeds received for the term A and term B loans were $491.8 and $552.9, respectively after deducting underwriting discounts and other expenses. The term A and term B loans will mature on June 30, 2028 and June 30, 2030, respectively. The term loans accrue interest at a per annum rate equal to the sum of, at the option of the Company, a Base Rate or a Term SOFR Rate and the Applicable Margin as defined by the Credit Agreement. As of March 31, 2024, the effective interest rate on the term A loan and term B loan was 7.58% and 9.08%, respectively.
The revolving credit facility is permitted, subject to certain covenant restrictions, to be used for general corporate purposes, including working capital and capital expenditures. There was $29.0 outstanding on the Company’s current revolving credit facility as of March 31, 2024 and no balances outstanding as of December 31, 2023. As of March 31, 2024, the effective interest rate on the revolving credit facility was 9.75%. There is a commitment fee associated with the revolving credit facility of 0.35% (per annum and paid quarterly) and an annual $0.1 agency fee (paid in quarterly installments). The credit facility matures on June 30, 2028.
Under the Credit Agreement, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for similarly rated borrowers, and the Company is required to maintain certain net leverage and interest coverage ratios. The Company is permitted to make adjustments, such as excluding certain costs, from the calculation of leverage and interest coverage ratios for compliance purposes. The Company was in compliance with all covenants in the Credit Agreement at March 31, 2024 and believes it will be in compliance with all covenants for a period at least 12 months from the date these financial statements are issued. The covenants were modified subsequent to March 31, 2024, as described in Note 16 - Subsequent Events.
There were no outstanding letters of credit under the Credit Agreement as of March 31, 2024.