Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.19.1
Debt
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
DEBT DEBT
The Company’s debt and capital lease obligations consisted of the following:
 (dollars in millions)
Maturity Date
 
Interest Rate
 
March 31,
2019
 
December 31,
2018
Senior Notes - USD 800 million (1)
2025
 
5.875%
 
$
785.3

 
$
784.9

Senior Notes - USD 1.10 billion (1)
2022
 
6.50%
 

 
1,067.1

Senior Notes - EUR 350 million (1)
2023
 
6.00%
 

 
397.4

USD Term Loans (2)
2026
 
LIBOR plus 2.25%
 
738.0

 

First Lien Credit Facility - USD Term Loans (2)
2020
 
> of 3.50% or LIBOR plus 2.50%
 

 
624.3

First Lien Credit Facility - USD Term Loans (2)
2021
 
> of 4.00% or LIBOR plus 3.00%
 

 
1,124.7

First Lien Credit Facility - Euro Term Loans (2)
2020
 
> of 3.25% or EURIBOR plus 2.50%
 

 
666.2

First Lien Credit Facility - Euro Term Loans (2)
2021
 
> of 3.50% or EURIBOR plus 2.75%
 

 
685.3

Borrowings under the Revolving Credit Facility
2024
 
LIBOR plus 2.25%
 
120.0

 
25.0

Borrowings under lines of credit
 
 
 
 
0.2

 

Other
 
 
 
 
1.0

 
1.1

Total debt and capital lease obligations
 
1,644.5

 
5,376.0

Less: current installments of long-term debt and revolving credit facilities
 
128.0

 
25.3

Total long-term debt and capital lease obligations
 
$
1,516.5

 
$
5,350.7


(1) 
Senior notes, net of unamortized premium, discounts and debt issuance costs of $14.7 million and $29.9 million at March 31, 2019 and December 31, 2018, respectively. Weighted average effective interest rate of 6.2% and 6.5% at March 31, 2019 and December 31, 2018, respectively.
(2)
Term loans, net of unamortized discounts and debt issuance costs of $10.2 million and $22.4 million at March 31, 2019 and December 31, 2018, respectively. Weighted average effective interest rate of 2.5% and 4.6% at March 31, 2019 and December 31, 2018, respectively, including the effects of interest rate swaps and net investment hedges. See Note 8, Financial Instruments, to the Company's unaudited interim Condensed Consolidated Financial Statements for further information regarding the Company's interest rate swaps and net investment hedges.
New Credit Agreement
The Company is a party to the New Credit Agreement, which provides for senior secured credit facilities in an aggregate principal amount of $1.08 billion, consisting of a revolving facility in an aggregate principal amount of $330 million maturing in 2024 and a term loan in an aggregate principal amount of $750 million maturing in 2026. On the closing date of the Arysta Sale, the $750 million term loan was borrowed under the New Credit Agreement.
The New Credit Agreement replaced the Credit Agreement, which was terminated on January 31, 2019, the closing date of the Arysta Sale, as the Company paid down the Credit Facilities, including the First Lien Credit Facility and the Revolving Credit Facility under the Credit Agreement and expensed $22.9 million of unamortized premiums, discounts and debt issuance costs, which was recorded in the Condensed Consolidated Statement of Operations as "Other (expense) income, net."
Borrowings under the New Credit Agreement bear interest at a rate per annum equal to a base rate, as defined in the New Credit Agreement, plus, in each case, an applicable rate equal to a spread of 1.25% with respect to Base Rate Loans and a spread of 2.25% with respect to Eurocurrency Rate Loans. The Company is required to pay a commitment fee in respect of any undrawn portion of the Revolver of 0.50% per annum, subject to a stepdown to 0.375% based on the Company’s first lien net leverage ratio.
The revolving facility under the New Credit Agreement includes borrowing capacity in the form of letters of credit of up to $100 million. In connection with the termination of the Credit Agreement and entry into the New Credit Agreement, all letters of credit outstanding on January 31, 2019 under the Credit Agreement were rolled into the New Credit Agreement.
The credit facilities under the New Credit Agreement are guaranteed, jointly and severally, by certain of the Company’s domestic subsidiaries and secured by a first-priority security interest in substantially all of the assets of the borrowers and the guarantors, including mortgages on material real property, subject to certain exceptions.
Covenants, Events of Default and Provisions
The New Credit Agreement contains customary representations and warranties, and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the borrowers or any guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, and dispositions. If the borrowers have total outstanding borrowings under the revolver (subject to certain exceptions) in excess of 30% of the commitment amount under the revolver, the revolver requires that the Company maintain a first lien net leverage ratio of at least 5.0 to 1.0, subject to a right to cure.
The New Credit Agreement requires the borrowers to make mandatory prepayments of borrowings, subject to certain exceptions, as described in the New Credit Agreement. In addition, the New Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the New Credit Agreement may be accelerated and the lenders could foreclose on their security interests in the assets of the borrowers and the guarantors.
At March 31, 2019, the Company was in compliance with the debt covenants contained in the credit facilities and, in accordance with applicable debt covenants, had full availability of its unused borrowing capacity of $205 million, net of letters of credit, under the revolving facility.
Senior Notes
Prior Senior Notes
On February 1, 2019, the Company completed the redemption of all outstanding Prior Senior Notes and, as a result, the Prior Senior Notes Indenture was terminated, releasing the Company and the guarantors named therein from their obligation under the Prior Senior Notes and the Prior Senior Notes Indenture. In connection with this redemption, the Company expensed $44.0 million, consisting of $29.5 million of call premiums and $14.5 million of unamortized premiums, discounts and debt issuance costs, which was recorded in the Condensed Consolidated Statement of Operations as "Other (expense) income, net." The Company funded the redemption with a portion of the net proceeds from the Arysta Sale and a portion of the borrowings under the New Credit Agreement. The 5.875% USD Notes due 2025 were not redeemed and remain outstanding.
5.875% USD Notes due 2025
The 5.875% USD Notes due 2025 are governed by the 5.875% USD Notes Indenture which provides, among other things, for customary affirmative and negative covenants, events of default and other customary provisions. The Company has the option to redeem the 5.875% USD Notes due 2025 prior to their maturity, subject to, in certain cases, the payment of an applicable make-whole premium. The 5.875% USD Notes due 2025 are unsecured, and fully and unconditionally guaranteed on a senior unsecured basis by generally all of the Company’s domestic subsidiaries that guarantee the obligations of the borrowers under the New Credit Agreement.
Lines of Credit and Other Debt Facilities
The Company has access to various revolving lines of credit, short-term debt facilities and overdraft facilities worldwide which are used to fund short-term cash needs. At March 31, 2019 and December 31, 2018, the aggregate principal amount outstanding under such facilities totaled $120 million and $25.0 million, respectively. The Company also had letters of credit outstanding of $5.4 million and $10.2 million at March 31, 2019 and December 31, 2018, respectively, of which $5.1 million and $9.7 million at March 31, 2019 and December 31, 2018, respectively, reduced the borrowings available under the various facilities. At March 31, 2019 and December 31, 2018, the availability under these facilities totaled approximately $232 million and $481 million, respectively, net of outstanding letters of credit.