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Short-Term Borrowings and Long-Term Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Short-Term Borrowings and Long-Term Debt

10.

Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt consist of the following:

 

 

December 31,

 

 

December 31,

 

 

2021

 

 

2020

 

Short-term borrowings

 

 

 

 

 

 

 

Commercial paper issuances

$

249.7

 

 

$

349.0

 

Various debt due to international banks

 

3.1

 

 

 

2.4

 

Total short-term borrowings

$

252.8

 

 

$

351.4

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

 

 

Term loan due May 1, 2022

$

0.0

 

 

$

300.0

 

2.45% Senior notes due August 1, 2022

 

300.0

 

 

 

300.0

 

Less: Discount

 

0.0

 

 

 

(0.1

)

2.875% Senior notes due October 1, 2022

 

400.0

 

 

 

400.0

 

Less: Discount

 

(0.1

)

 

 

(0.1

)

Term loan due December 22, 2024

 

400.0

 

 

 

0.0

 

3.15% Senior notes due August 1, 2027

 

425.0

 

 

 

425.0

 

Less: Discount

 

(0.3

)

 

 

(0.3

)

2.3% Senior notes due December 15, 2031

 

400.0

 

 

 

0.0

 

Less: Discount

 

(0.8

)

 

 

0.0

 

3.95% Senior notes due August 1, 2047

 

400.0

 

 

 

400.0

 

Less: Discount

 

(2.5

)

 

 

(2.6

)

Debt issuance costs, net

 

(11.2

)

 

 

(9.4

)

Total long-term debt

 

2,310.1

 

 

 

1,812.5

 

Less: current maturities

 

(699.4

)

 

 

0.0

 

Net long-term debt

$

1,610.7

 

 

$

1,812.5

 

 

 

Revolving Credit Facility

On May 1, 2019, the Company amended its $1,000.0 unsecured revolving credit facility (the “Credit Agreement”) to extend the term of the Credit Agreement from March 29, 2023 to March 29, 2024.  Under the Credit Agreement, the Company has the ability to increase its borrowing up to an additional $600.0, subject to lender commitments and certain conditions as described in the Credit Agreement.  Borrowings under the Credit Agreement are available for general corporate purposes and are used to support the Company’s $1,000.0 commercial paper program.  In March 2020, the Company drew down a total amount of $825.0 under the Revolving Credit Facility. The Company initiated borrowings under the Revolving Credit Facility as a precautionary measure to increase its cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic.  The full $825.0 was repaid in May 2020. 

Interest on the Company’s borrowings under the Credit Agreement will accrue at a per annum rate equal to the sum of (x) either (at the Company’s option) (i) the adjusted LIBOR rate (generally, the LIBOR rate for an interest period selected by the Company and adjusted for statutory reserves) or (ii) the Base Rate (generally equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) Bank of America’s “prime rate” and (c) the adjusted LIBOR rate for an interest period of one-month plus 1.00%), in any case not less than zero, plus (y) the applicable margin. The applicable margin is determined based upon the corporate credit rating of the Company and ranges from 0.875% to 1.500% per annum, in the case of any borrowing bearing interest by reference to the adjusted LIBOR rate, and 0% to 0.50%, in the case of any borrowing bearing interest by reference to the Base Rate. In addition, the Company will bear certain customary fees, including a commitment fee, determined based upon the corporate credit rating of the Company and ranging from 0.070% to 0.175% per annum on the aggregate unused commitments under the Credit Agreement, and additional issuance fees and participation fees in respect of any letters of credit issued under the Credit Agreement.

The Credit Agreement contains customary affirmative and negative covenants, including without limitation, restrictions on the indebtedness, liens, investments, asset dispositions, fundamental changes, changes in the nature of the business conducted, affiliate transactions, burdensome agreements and use of proceeds.  

Under the Credit Agreement, the Company is required to maintain its leverage ratio, defined as the ratio of its Consolidated Funded Indebtedness (as defined in the Credit Agreement) to EBITDA, at a level no greater than 3.75 to 1.00 (or, to the extent the Company or any Subsidiary has consummated a material acquisition, (i) at a level no greater than 4.25:1.00 for the 12 month period commencing on the date the Company or any Subsidiary consummates the first material acquisition after the closing date and (ii) at a level no greater than 4.25:1.00 for the 12 month period commencing on the date the Company or any Subsidiary consummates any additional material acquisition, provided that the Company has maintained a leverage ratio of 3.75:1.00 or less during each of the immediately preceding four consecutive fiscal quarters before the date of such additional material acquisition).

The Credit Agreement also contains customary events of default, including failure to make certain payments under the Credit Agreement when due, breach of covenants, materially incorrect representations and warranties, default on other material indebtedness, events of bankruptcy, material adverse judgments, certain events relating to pension plans, the failure of any of the loan documents to remain in full force and effect and the occurrence of any change in control with respect to the Company.

December 22, 2024 Term Loan

On December 22, 2021, the Company entered into a $400.0 unsecured term loan facility (the “Term Loan Facility”) with various banks.  The loan was fully drawn at closing.  Unless prepaid, the loan is due on December 22, 2024.  The interest rate is LIBOR plus an applicable margin based on the Company’s credit rating, which can range from 60 basis points (“bps”) to 125 bps.  The proceeds of the loan were used to partially fund the TheraBreath Acquisition, with the remaining proceeds used for the repayment of commercial paper.

The Term Loan Facility contains customary affirmative and negative covenants, including without limitation, restrictions on the indebtedness, liens, investments, asset dispositions, fundamental changes, changes in the nature of the business conducted, affiliate transactions, burdensome agreements and use of proceeds.  

Under the Term Loan Facility, the Company is required to maintain its leverage ratio, defined as the ratio of its Consolidated Funded Indebtedness (as defined in the Term Loan Facility) to Consolidated EBITDA, at a level no greater than 3.75 to 1.00 (or, to the extent the Company or any Subsidiary has consummated a material acquisition, (i) at a level no greater than 4.25:1.00 for the 12 month period commencing on the date the Company or any Subsidiary consummates the Acquisition (as defined in the Term Loan Facility) and (ii) at a level no greater than 4.25:1.00 for the 12 month period commencing on the date the Company or any Subsidiary consummates any material acquisition, provided that the Company has maintained a leverage ratio of 3:75:1.00 or less during each of the immediately preceding four consecutive fiscal quarters before the date of such material acquisition).

The Term Loan Facility also contains customary events of default, including failure to make certain payments under the Term Loan Facility when due, breach of covenants, materially incorrect representations and warranties, default on other material indebtedness, events of

bankruptcy, material adverse judgments, certain events relating to pension plans, the failure of any of the loan documents to remain in full force and effect and the occurrence of any change in control with respect to the Company.

2.3%  Senior Notes

The Company financed the TheraBreath Acquisition with a portion of the proceeds from an underwritten public offering of $400.0 aggregate principal amount Senior Notes due 2031 (the “2031 Notes”).  These Notes bear interest at 2.3% and were issued in an underwritten offering under an indenture with Deutsche Bank Trust Company Americas, as trustee.  Interest on the 2031 Notes is payable semi-annually, on each June 15 and December 15.  The 2031 Notes will mature on December 15, 2031, unless earlier retired or redeemed.

$1.425M Senior Notes

The Company financed the Waterpik Acquisition with a portion of the proceeds from an underwritten public offering of $1,425.0 aggregate principal amount of Senior Notes completed on July 25, 2017, consisting of $300.0 aggregate principal amount of Floating Rate Senior Notes that were due in 2019 and fully repaid, $300.0 aggregate principal amount of 2.45% Senior Notes due 2022, $425.0 aggregate principal amount of 3.15% Senior Notes due 2027 and $400.0 aggregate principal amount of 3.95% Senior Notes due 2047 (collectively with the 2031 Notes, the “Senior Notes”).  The $300.0 Floating Rate Senior Notes which matured and were repaid in full on January 25, 2019, bore interest at a rate, reset quarterly, equal to three-month U.S. Dollar LIBOR plus 0.15%.  The remaining proceeds of the offering of the Senior Notes were used to pay down in its entirety and terminate the Company’s $200.0 term loan borrowed in the second quarter of 2017 and to repay a portion of the Company’s outstanding commercial paper borrowings.

2.875% Senior Notes

On September 26, 2012, the Company issued $400.0 aggregate principal amount of 2.875% Senior Notes due 2022 (the “2022 Notes”).  These Notes were issued under the second supplemental indenture dated September 26, 2012 (the “BNY Mellon Second Supplemental Indenture”) to the indenture dated December 15, 2010 (the “BNY Mellon Base Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”), as trustee.  Interest on the 2022 Notes is payable semi-annually, on each April 1 and October 1.  The 2022 Notes will mature on October 1, 2022, unless earlier retired or redeemed.  

May 1, 2022 Term Loan

On May 1, 2019, the Company entered into a $300.0 unsecured term loan credit facility with various banks, the proceeds of which were used to partially fund the Flawless Acquisition.  The interest rate was LIBOR plus an applicable margin based on the Company’s credit rating, which can range from 60 basis points (“bps”) to 125 bps.  In June 2021, the Company repaid $100.0 principal of the $300.0 term loan due May 1, 2022, with the remaining $200.0 principal repaid in early July 2021.  The term loan was repaid with proceeds from commercial paper borrowings and cash on hand.

Commercial Paper

The Company has an agreement with four banks to establish a commercial paper program (the “Program”).  Under the Program, the Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1,000.0.  The maturities of the notes will vary but may not exceed 397 days.  The notes will be sold under customary terms in the commercial paper market and will be issued at a discount to par or, alternatively, will be sold at par and will bear varying interest rates based on a fixed or floating rate basis.  The interest rates will vary based on market conditions and the ratings assigned to the notes by the rating agencies designated in the agreement at the time of issuance.  Subject to market conditions, the Company intends to utilize the Program as its primary short-term borrowing facility and does not intend to sell unsecured commercial paper notes in excess of the available amount under the revolving credit agreement.  If, for any reason, the Company is unable to access the commercial paper market, the revolving credit facility would be utilized to meet the Company’s short-term liquidity needs.  The Company had $249.7 of commercial paper outstanding as of December 31, 2021 with a weighted-average interest rate of approximately 0.30% and had $349.0 of commercial paper outstanding as of December 31, 2020 with a weighted-average interest rate of approximately 0.26%. As of December 31, 2021, the Company had approximately $746.0 available through the revolving facility under the Credit Agreement and commercial paper program.     

Interest Rate Swap Lock Agreement

The Company entered into interest rate swap lock agreements to hedge the risk of changes in the interest payments attributable to changes in the benchmark LIBOR interest rate associated with anticipated issuances of debt.  These interest rate swap lock agreements have been designated as cash flow hedges and have a notional amount of $300.0.  The fair value of these interest rate swap lock agreements is reflected in the Consolidated Balance Sheet within Accounts Payable and Accrued Expenses.