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Debt

12 Months Ended

Dec. 31, 2021

Debt

Debt

21.   Debt

​

​	​	​	​	​	​	​
​		Carrying amount
​	​	December 31,		​	December 31,
​		2021			2020
Short-term debt	​	$	6,147	​	$	29,145
​	​	​	​	​	​	​
Long-term debt:	​			​
​	​	​	​	​	​	​
Term loan and long-term revolver loans:	​			​
Term loan denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 2.61%, due in monthly installments of interest only, maturing in September 2026	​		93,283	​		98,420
Long-term revolver loan denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 2.61%, due in monthly installments of interest only, maturing in September 2026	​		46,206	​		46,184
Long-term revolver loan denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 2.25%, due in monthly installments of interest only, maturing in September 2026	​		56,492	​		—
Long-term revolver loan denominated in U.S. dollars, secured, bearing interest at a weighted average rate of 1.82%, due in monthly installments of interest only, maturing in September 2026	​		117,000	​		—
Less: unamortized debt issue costs	​		(463)	​		(690)
​	​	​	​	​	​	​
Senior unsecured notes:	​		​	​		​
Bearing interest at 5.375% due in semi-annual installments, with the full amount of principal due in January 2025 (the "2016 Notes")	​		500,000	​		500,000
Less: unamortized debt issue costs	​		(5,469)	​		(7,266)
Bearing interest at 4.75% due in semi-annual installments, with the full amount of principal due in December 2031 (the "2021 USD Notes")	​	​	600,000	​	​	—
Less: unamortized debt issue costs	​	​	(1,948)	​	​	—
Bearing interest at 4.95% due in semi-annual installments, with the full amount of principal due in December 2029 (the "2021 CAD Notes")	​	​	333,464	​	​	—
Less: unamortized debt issue costs	​	​	(1,127)	​	​	—
Total long-term debt	​		1,737,438	​		636,648
​	​	​	​	​	​	​
Total debt	​	$	1,743,585	​	$	665,793
​	​	​	​	​	​	​
Long-term debt:	​			​
Current portion	​	$	3,498	​	$	10,360
Non-current portion	​		1,733,940	​		626,288
Total long-term debt	​	$	1,737,438	​	$	636,648

​

Short-term debt

​

Short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facilities and has a weighted average interest rate of 1.8% (December 31, 2020: 2.3%).

Long-term debt

​

a) Term loan and long-term revolver loans

​

On August 14, 2020, the Company entered into an amendment of the Credit Agreement dated October 27, 2016 (“Credit Agreement”), with a syndicate of lenders, totaling $630,000,000 comprised of:

(1) Multicurrency revolving facilities of up to $530,000,000 (the “Revolving Facilities”); and

(2) A delayed-draw term loan facility of up to $100,000,000 (the “DDTL Facility” and together with the Revolving Facilities, the “Facilities”).

​

21.   Debt (continued)

​

a) Term loan and long-term revolver loans (continued)

​

On September 21, 2021, the Company entered into another amendment of its Credit Agreement (“September 2021 Amendment”). The September 2021 Amendment, among other things, (i) extended the maturity date of the Facilities from October 27, 2023 to September 21, 2026, (ii) increased the total size of the Facilities provided under the Credit Agreement to up to $1,045,000,000, including $295,000,000 of commitments under the DDTL Facility, (iii) reduced the applicable margin for base rate loans and LIBOR loans at each pricing tier level, (iv) reduced the applicable percentage per annum used to calculate the commitment fee in respect of the unused commitments under the Revolving Facilities at each pricing tier level, and (v) included customary provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate.

Immediately prior to the September 2021 Amendment, the aggregate principal amount outstanding under the DDTL Facility was $90,000,000 ($118,889,995 Canadian dollars). In connection with the September 2021 Amendment, the Company refinanced that amount with the proceeds from a borrowing under the DDTL Facility. There are no mandatory principal repayments of borrowings under the DDTL Facility until the earlier of when the remaining $205,000,000 is drawn or Q3 2022. Once principal payments become mandatory, they are subject to an annual amortization rate of 5%, payable in quarterly installments, with the balance payable at maturity.

​

The Company incurred total debt issuance costs of $4,262,000 in connection with the September 2021 Amendment. At December 31, 2021, the Company had unamortized deferred debt issue costs relating to the Credit Agreement of $5,699,000.

For the year ended December 31, 2021, the Company made scheduled term loan repayments of $5,328,000 (2020: $13,711,000). The Company did not make any voluntary term loan prepayments during the year ended December 31, 2021 (2020: $nil).

b) Senior unsecured notes

​

2016 Notes

On December 21, 2016, the Company completed the offering of $500,000,000 aggregate principal amount of 5.375% senior unsecured notes due January 15, 2025 (the “2016 Notes”). Interest on the 2016 Notes is payable semi-annually. The 2016 Notes are jointly and severally guaranteed on an unsecured basis, subject to certain exceptions, by certain of the Company’s subsidiaries. IronPlanet, Rouse, and certain of their respective subsidiaries were added as additional guarantors in connection with the acquisitions of IronPlanet and Rouse, respectively.

2021 Notes

​

On December 21, 2021, the Company completed the offering of two series of senior notes: (i) $600,000,000 aggregate principal amount of 4.750% senior notes due December 15, 2031 (the “2021 USD Notes”) and (ii) $425,000,000 Canadian dollar aggregate principal amount of 4.950% due December 15, 2029 ( the “2021 CAD Notes”, and together with the 2021 USD Notes, the “2021 Notes”).

​

The gross proceeds from the offering together with certain additional amounts including prepaid interest were placed into escrow accounts and will be held in escrow until the completion of the Euro Auctions Acquisition. The 2021 Notes are recorded on the consolidated balance sheet in non-current restricted cash and included in long term debt. If the Euro Auctions Acquisition is not consummated on or before September 30, 2022 or the SPA is terminated prior to such date, the Company will redeem all of the outstanding 2021 Notes at a redemption price equal to 100% of the original offering price of the 2021 Notes, plus accrued and unpaid interest. Once out of escrow, interest on the 2021 Notes is payable semi-annually.

​

​

21. Debt (continued)

​

b) Senior unsecured notes (continued)

​

The Company intends to use the net proceeds from the offering of the 2021 Notes, together with proceeds from its DDTL Facility, to fund the consideration payable of the Euro Auctions Acquisition and any related fees and expenses. Until completion of the Euro Auctions Acquisition, the 2021 Notes are secured only by the amounts deposited into certain escrow accounts established in connection with the issuance of the 2021 Notes. Upon consummation of the proposed Euro Auctions Acquisition, the 2021 Notes will be, jointly and severally, fully and unconditionally guaranteed, on a senior unsecured basis, by the Company and each of the Company’s subsidiaries that is a borrower, or guarantees indebtedness, under the Company’s Credit Agreement and its 2016 Notes. Euro Auctions, and its respective subsidiaries that become a borrower or guarantor under the Credit Agreement are expected to become guarantors following the consummation of the Euro Auctions Acquisition.

​

The Company has incurred total debt issue costs of $1,954,000 in connection with the offering of the 2021 USD Notes, and $1,129,000 in connection with the offering of the 2021 CAD Notes. Additionally, fees of approximately $10,000,000 will be paid to Goldman Sachs Bank USA Bank and certain other financial institutions when the proceeds are released from escrow to finance the Euro Auctions Acquisition. These fees will be capitalized as debt issuance costs and amortized over the term of the respective senior notes.

As at December 31, 2021, principal repayments for the remaining period to the contractual maturity for our long term debt are as follows:

​

​	​	​	​
​		Face value
2022		$	3,498
2023		​	4,664
2024		​	4,664
2025		​	504,664
2026	​	​	295,492
Thereafter		​	933,464
​	​	$	1,746,446

​

​

As at December 31, 2021, the Company had unused committed revolving credit facilities aggregating $515,581,000 that are available until September 2026 subject to certain covenant restrictions, unused uncommitted revolving credit facilities aggregating $5,000,000 that are available until October 2023, and unused uncommitted revolving credit facilities aggregating $5,000,000 with no maturity date. The Company was in compliance with all financial and other covenants applicable to the credit facilities at December 31, 2021.

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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