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Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt

Note 7—Debt

At September 30, 2024 and December 31, 2023, debt consisted of the following (in millions):

 

 

September 30,

 

 

December 31,

 

 

 

 

2024

 

 

2023

 

 

Senior secured credit facilities, weighted-average interest rate of 6.76% and 7.35%, respectively

 

$

4,490.0

 

 

$

4,755.1

 

 

5.5% senior notes due 2027

 

 

2,000.0

 

 

 

2,000.0

 

 

6.5% senior notes due 2032

 

 

750.0

 

 

 

—

 

 

Unamortized original issue discount and debt issuance costs

 

 

(37.3

)

 

 

(35.1

)

 

 

 

 

7,202.7

 

 

 

6,720.0

 

 

Less: current portion of long-term debt

 

 

47.1

 

 

 

51.5

 

 

Long-term debt

 

$

7,155.6

 

 

$

6,668.5

 

 

 

The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes:

 

 

Amount Outstanding
at September 30, 2024

 

 

Maturity

 

Scheduled Quarterly

 

 

(in millions)

 

 

Date

 

Payments Required

Senior Secured Credit Facilities

 

 

 

 

 

 

 

Term B-8 Loans

 

$

3,690.0

 

 

May 9, 2031

 

0.25%

Term A-9 Loans

 

 

800.0

 

 

September 27, 2029 (1)

 

0.625% (2)

Revolving Credit Facility

 

 

—

 

 

December 28, 2027

 

None

5.5% Senior Notes

 

 

2,000.0

 

 

September 30, 2027

 

None

6.5% Senior Notes

 

 

750.0

 

 

June 1, 2032

 

None
(1)
The Term A-9 Loans will mature on the earlier to occur of (1) September 27, 2029 or (2) 91 days prior to the maturity of (x) the 5.5% Senior Notes if more than $150.0 million aggregate principal amount remains outstanding on the 91st day prior to such maturity or (y) the Revolving Credit Facility if more than $150.0 million aggregate principal amount of commitments remain outstanding on the 91st day prior to such maturity, whichever of (x) or (y) comes first.
(2)
Scheduled quarterly payment required for the first eight fiscal quarters commencing with the fiscal quarter ending December 31, 2024. The scheduled quarterly payment will increase to 1.250% for each quarter thereafter until the maturity date of the Term A-9 Loans.

 

Senior Secured Credit Facilities and Senior Notes

On May 9, 2024, we entered into the Incremental Joinder & First Amendment to Credit Agreement (the “Amendment”) which amended our Credit Agreement. Pursuant to the Amendment, we borrowed $3,935.0 million in aggregate principal amount of incremental term B-8 loans (the “Term B-8 Loans”). The Term B-8 Loans bear interest at, at our option, the Base Rate (as defined in the Amendment), plus 1.00% per annum, or the Term SOFR Rate (as defined in the Amendment), plus 2.00% per annum.

Also on May 9, 2024, we issued $750.0 million aggregate principal amount of 6.5% Senior Notes due 2032 (the “6.5% Senior Notes”). The 6.5% Senior Notes are senior unsecured obligations and rank equal in right of payment with all of our existing and future senior indebtedness. The 6.5% Senior Notes are fully and unconditionally guaranteed, jointly and severally, by SS&C Holdings and all of its existing domestic restricted subsidiaries (other than SS&C Technologies) that guarantee our existing senior secured credit facilities and future domestic restricted subsidiaries that guarantee our existing senior secured credit facilities and certain other indebtedness. Interest on the 6.5% Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024.

The net proceeds of the Term B-8 Loans and from the sale of the 6.5% Senior Notes were used to repay all amounts owed under the term B-3 loans, the term B-4 loans, the term B-5 loans, the term B-6 loans and the term B-7 loans (together, the “Existing Term Loans”) under the Credit Agreement, as well as to pay related fees and expenses.

On September 27, 2024, in connection with our acquisition of Battea, we entered into an Incremental Joinder to our Credit Agreement (the “September 2024 Incremental Joinder”). Pursuant to the September 2024 Incremental Joinder, we borrowed $800.0 million in aggregate principal amount of incremental term A-9 loans (“Term A-9 Loans”), the net proceeds of which were used to finance in part the acquisition of Battea, the payment of fees and expenses related thereto and for working capital and general corporate purposes. The Term A-9 Loans bear interest at, at our option, the Base Rate (as defined in the Incremental Joinder), plus 0.50% per annum, or the Term SOFR Rate (as defined in the Incremental Joinder), plus 1.50% per annum, in each case with two leverage-based adjustments that increase the interest rate margin by 0.25% per annum if our consolidated net secured leverage ratio is greater than 3.50x and 4.25x, respectively, and one leverage-based adjustment that reduces the interest rate margin by 0.125% per annum if our consolidated net secured leverage ratio is less than or equal to 2.50x.

 

Debt issuance costs and loss on extinguishment of debt

We evaluated the borrowing of our Term B-8 Loans and issuance of 6.5% Senior Notes and the repayment of our Existing Term Loans in accordance with FASB Accounting Standards Codification 470-50, Debt Modifications and Extinguishments. We determined that the new debt borrowing and issuance and existing debt repayment were two independent transactions due to the fact that (i) no single investor held a significant concentration of both the old and the new debt, (ii) none of the old investors were included in negotiations with creditors about modifying the old debt, and (iii) all lenders were provided the same opportunity to participate in the new debt regardless of whether they were an existing lender. Consequently, the refinancing was accounted for as a debt extinguishment. As a result, the Existing Term Loans borrowing costs of $27.7 million were expensed and are included in Loss on extinguishment of debt in the Condensed Consolidated Statement of Comprehensive Income during the nine months ended September 30, 2024.

In connection with the May 2024 and September 2024 debt transactions, we capitalized an aggregate of $4.0 million and $38.6 million during the three and nine months ended September 30, 2024, respectively, in financing costs, which represent new third-party costs.

 

Fair Value of Debt

The carrying amounts and fair values of financial instruments are as follows (in millions):

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

Carrying

 

 

Fair

 

 

Carrying

 

 

Fair

 

 

 

Amount

 

 

Value

 

 

Amount

 

 

Value

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured credit facilities

 

$

4,462.0

 

 

$

4,498.8

 

 

$

4,722.7

 

 

$

4,774.4

 

5.5% senior notes due 2027

 

 

1,997.9

 

 

 

2,002.2

 

 

 

1,997.3

 

 

 

1,974.0

 

6.5% senior notes due 2032

 

 

742.8

 

 

 

776.6

 

 

 

—

 

 

 

—

 

 

The above fair values, which are Level 2 liabilities, were computed based on comparable quoted market prices. The fair values of cash, accounts receivable, net, short-term borrowings, and accounts payable approximate the carrying amounts due to the short-term maturities of these instruments.