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NOTE 6 - DEBT AND CREDIT FACILITIES
The following represents a summary of our long-term debt:
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(In Millions) |
SeptemberÌý30, 2019 |
Debt Instrument |
Ìý |
Annual Effective
Interest Rate
|
Ìý |
Total Principal Amount |
Ìý |
Debt Issuance Costs |
Ìý |
Unamortized Discounts |
Ìý |
Total Debt |
Secured Notes: |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
$400 Million 4.875% 2024 Senior Notes |
Ìý |
5.00% |
Ìý |
$ |
400.0 |
|
Ìý |
$ |
(4.9 |
) |
Ìý |
$ |
(1.9 |
) |
Ìý |
$ |
393.2 |
|
Unsecured Notes: |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
$316.25 Million 1.50% 2025 Convertible Senior Notes |
Ìý |
6.26% |
Ìý |
316.3 |
|
Ìý |
(4.8 |
) |
Ìý |
(67.7 |
) |
Ìý |
243.8 |
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$1.075 Billion 5.75% 2025 Senior Notes |
Ìý |
6.01% |
Ìý |
473.3 |
|
Ìý |
(3.8 |
) |
Ìý |
(5.8 |
) |
Ìý |
463.7 |
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$750 Million 5.875% 2027 Senior Notes |
Ìý |
6.49% |
Ìý |
750.0 |
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Ìý |
(6.5 |
) |
Ìý |
(28.0 |
) |
Ìý |
715.5 |
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$800 Million 6.25% 2040 Senior Notes |
Ìý |
6.34% |
Ìý |
298.4 |
|
Ìý |
(2.2 |
) |
Ìý |
(3.3 |
) |
Ìý |
292.9 |
|
ABL Facility |
Ìý |
N/A |
Ìý |
450.0 |
|
Ìý |
N/A |
|
Ìý |
N/A |
|
Ìý |
— |
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Long-term debt |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
$ |
2,109.1 |
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(In Millions) |
DecemberÌý31, 2018 |
Debt Instrument |
Ìý |
Annual Effective
Interest Rate
|
Ìý |
Total Principal Amount |
Ìý |
Debt Issuance Costs |
Ìý |
Unamortized Discounts |
Ìý |
Total Debt |
Secured Notes: |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
$400 Million 4.875% 2024 Senior Notes |
Ìý |
5.00% |
Ìý |
$ |
400.0 |
|
Ìý |
$ |
(5.7 |
) |
Ìý |
$ |
(2.2 |
) |
Ìý |
$ |
392.1 |
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Unsecured Notes: |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
$700 Million 4.875% 2021 Senior Notes |
Ìý |
4.89% |
Ìý |
124.0 |
|
Ìý |
(0.2 |
) |
Ìý |
— |
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Ìý |
123.8 |
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$316.25 Million 1.50% 2025 Convertible Senior Notes |
Ìý |
6.26% |
Ìý |
316.3 |
|
Ìý |
(5.5 |
) |
Ìý |
(75.6 |
) |
Ìý |
235.2 |
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$1.075 Billion 5.75% 2025 Senior Notes |
Ìý |
6.01% |
Ìý |
1,073.3 |
|
Ìý |
(9.9 |
) |
Ìý |
(14.6 |
) |
Ìý |
1,048.8 |
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$800 Million 6.25% 2040 Senior Notes |
Ìý |
6.34% |
Ìý |
298.4 |
|
Ìý |
(2.3 |
) |
Ìý |
(3.3 |
) |
Ìý |
292.8 |
|
ABL Facility |
Ìý |
N/A |
Ìý |
450.0 |
|
Ìý |
N/A |
|
Ìý |
N/A |
|
Ìý |
— |
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Fair Value Adjustment to Interest Rate Hedge |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
0.2 |
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Long-term debt |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
$ |
2,092.9 |
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$750 Million 5.875% Senior Notes due 2027 Offering
On May 13, 2019, we entered into an indenture among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the issuance of $750 million aggregate principal amount of 5.875% 2027 Senior Notes. The 5.875% 2027 Senior Notes were issued at 96.125% of face value. The 5.875% 2027 Senior Notes were issued in a private transaction exempt from the registration requirements of the Securities Act of 1933. Pursuant to the registration rights agreement executed as part of this offering, we agreed to file a registration statement with the SEC with respect to a registered offer to exchange the 5.875% 2027 Senior Notes for publicly registered notes within 365 days of the closing date, with all significant terms and conditions remaining the same.
The 5.875% 2027 Senior Notes bear interest at a rate of 5.875% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2019. The 5.875% 2027 Senior Notes mature on June 1, 2027.
The 5.875% 2027 Senior Notes are unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The 5.875% 2027 Senior Notes are guaranteed on a senior unsecured basis by our material direct and indirect wholly-owned domestic subsidiaries and, therefore, are structurally senior to any of our existing and future indebtedness that is not guaranteed by such guarantors and are structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries that do not guarantee the 5.875% 2027 Senior Notes.
The 5.875% 2027 Senior Notes may be redeemed, in whole or in part, at any time at our option not less than 30 days nor more than 60 days after prior notice is sent to the holders of the 5.875% 2027 Senior Notes. The following is a summary of redemption prices for our 5.875% 2027 Senior Notes:
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Redemption Period |
Ìý |
Redemption Price1
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Ìý |
Restricted Amount |
Prior to June 1, 2022 - using proceeds of equity issuance |
Ìý |
105.875 |
% |
Ìý |
Up to 35% of original aggregate principal |
Prior to June 1, 20222
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Ìý |
100.000 |
Ìý |
Ìý |
Ìý |
Beginning on June 1, 2022 |
Ìý |
102.938 |
Ìý |
Ìý |
Ìý |
Beginning on June 1, 2023 |
Ìý |
101.958 |
Ìý |
Ìý |
Ìý |
Beginning on June 1, 2024 |
Ìý |
100.979 |
Ìý |
Ìý |
Ìý |
Beginning on June 1, 2025 and thereafter |
Ìý |
100.000 |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
1ÌýÌýPlus accrued and unpaid interest, if any, up to but excluding the redemption date.
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2ÌýÌýPlus a "make-whole" premium.
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In addition, if a change in control triggering event, as defined in the indenture, occurs with respect to the 5.875% 2027 Senior Notes, we will be required to offer to purchase the notes at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of purchase.
The terms of the 5.875% 2027 Senior Notes contain certain customary covenants; however, there are no financial covenants.
Debt issuance costs of $6.8 million were incurred related to the offering of the 5.875% 2027 Senior Notes and are included in Long-term debt in the Statements of Unaudited Condensed Consolidated Financial Position.
Debt Extinguishments - 2019
The net proceeds from the issuance of $750 million aggregate principal amount of 5.875% 2027 Senior Notes, along with cash on hand, were used to redeem in full all of our outstanding 4.875% 2021 Senior Notes and to fund the repurchase of $600 million aggregate principal amount of our outstanding 5.75% 2025 Senior Notes in a tender offer. The following is a summary of the debt extinguished and the respective loss on extinguishment:
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Ìý |
Ìý |
(In Millions) |
Ìý |
Ìý |
Nine Months Ended
September 30, 2019
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Debt Instrument |
Ìý |
Debt Extinguished |
Ìý |
(Loss) on Extinguishment |
$700 Million 4.875% 2021 Senior Notes |
Ìý |
$ |
124.0 |
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Ìý |
$ |
(5.3 |
) |
$1.075 Billion 5.75% 2025 Senior Notes |
Ìý |
600.0 |
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Ìý |
(12.9 |
) |
Ìý |
Ìý |
$ |
724.0 |
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Ìý |
$ |
(18.2 |
) |
Debt Extinguishments - 2018
The following is a summary of the debt extinguished with cash and the respective gain on extinguishment:
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Ìý |
Ìý |
(In Millions) |
Ìý |
Ìý |
Three Months Ended
September 30, 2018
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Ìý |
Nine Months Ended
September 30, 2018
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Debt Instrument |
Ìý |
Debt Extinguished |
Ìý |
Gain on Extinguishment |
Ìý |
Debt Extinguished |
Ìý |
Gain on Extinguishment |
$400 Million 5.90% 2020 Senior Notes |
Ìý |
$ |
— |
|
Ìý |
$ |
— |
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Ìý |
$ |
0.5 |
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Ìý |
$ |
— |
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$500 Million 4.80% 2020 Senior Notes |
Ìý |
— |
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Ìý |
— |
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Ìý |
0.1 |
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Ìý |
— |
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$700 Million 4.875% 2021 Senior Notes |
Ìý |
1.0 |
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Ìý |
— |
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Ìý |
14.2 |
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Ìý |
0.1 |
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$1.075 Billion 5.75% 2025 Senior Notes |
Ìý |
— |
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Ìý |
— |
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Ìý |
1.7 |
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Ìý |
0.1 |
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Ìý |
Ìý |
$ |
1.0 |
|
Ìý |
$ |
— |
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Ìý |
$ |
16.5 |
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Ìý |
$ |
0.2 |
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Debt Maturities
The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at SeptemberÌý30, 2019:
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Ìý |
Ìý |
(In Millions) |
Ìý |
Ìý |
Maturities of Debt |
2019 |
Ìý |
$ |
— |
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2020 |
Ìý |
— |
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2021 |
Ìý |
— |
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2022 |
Ìý |
— |
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2023 |
Ìý |
— |
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2024 |
Ìý |
400.0 |
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2025 and thereafter |
Ìý |
1,838.0 |
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Total maturities of debt |
Ìý |
$ |
2,238.0 |
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ABL Facility
The following represents a summary of our borrowing capacity under the ABL Facility:
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Ìý |
(In Millions) |
Ìý |
September 30, 2019 |
Ìý |
December 31, 2018 |
Available borrowing base on ABL Facility1
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$ |
400.8 |
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Ìý |
$ |
323.7 |
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Letter of credit obligations2
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(34.1 |
) |
Ìý |
(55.0 |
) |
Borrowing capacity available3
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$ |
366.7 |
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Ìý |
$ |
268.7 |
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Ìý |
Ìý |
Ìý |
Ìý |
1 The ABL Facility has a maximum borrowing base of $450 million. The available borrowing base is determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
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2 We issued standby letters of credit with certain financial institutions in order to support business obligations including, but not limited to, workers compensation and environmental obligations.
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3 As of September 30, 2019 and December 31, 2018, we had no loans drawn under the ABL Facility.
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