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v3.21.1

Debt | 3 Months Ended
--- | ---
Mar. 31, 2021
Debt Disclosure [Abstract] |
Debt | DEBT Debt consisted of the following:
(DOLLARS IN MILLIONS) | Effective Interest Rate |  | March 31, 2021 |  | December 31, 2020
2021 Euro Notes(1) | 0.82 | % |  | $ | 353 |  |  | $ | 368 |
2022 Notes(3) | 0.69 | % |  | 300 |  |  | — |
2023 Notes(1) | 3.30 | % |  | 299 |  |  | 299 |
2024 Euro Notes(1) | 1.88 | % |  | 587 |  |  | 614 |
2025 Notes(3) | 1.22 | % |  | 1,001 |  |  | — |
2026 Euro Notes(1) | 1.93 | % |  | 936 |  |  | 978 |
2027 Notes(3) | 1.56 | % |  | 1,220 |  |  | — |
2028 Notes(1) | 4.57 | % |  | 397 |  |  | 397 |
2030 Notes(3) | 2.21 | % |  | 1,511 |  |  | — |
2040 Notes(3) | 3.04 | % |  | 775 |  |  | — |
2047 Notes(1) | 4.44 | % |  | 494 |  |  | 494 |
2048 Notes(1) | 5.12 | % |  | 786 |  |  | 786 |
2050 Notes(3) | 3.21 | % |  | 1,574 |  |  | — |
2018 Term Loan Facility(1) | 3.65 | % |  | 240 |  |  | 240 |
2022 Term Loan Facility (1) | 1.73 | % |  | 200 |  |  | 199 |
2024 Term Loan Facility(3) | 1.46 | % |  | 625 |  |  | — |
2026 Term Loan Facility(3) | 1.83 | % |  | 625 |  |  | — |
Amortizing Notes(1) | 6.09 | % |  | 24 |  |  | 36 |
Bank overdrafts and other |  |  | 11 |  |  | 2 |
Total debt |  |  | 11,958 |  |  | 4,413 |
Less: Short-term borrowings(2) |  |  | (628) |  |  | (634) |
Total Long-term debt |  |  | $ | 11,330 |  |  | $ | 3,779 |
_______________________ (1)Amount is net of unamortized discount and debt issuance costs. (2)Includes bank borrowings, overdrafts and current portion of long-term debt. (3)Assumed by the Company as part of the N&B Merger. Term Loan Facility and Senior Notes assumed as part of the N&B Merger Following the Merger, the Company assumed the indebtedness incurred by N&B in the debt financings completed prior to the Distribution. This indebtedness includes (i) a Term Loan Facility of $1.250 billion pursuant to the term loan credit agreement (the "N&B Term Loan Facility") and (ii) a series of Senior Notes in the aggregate amount of $6.250 billion with maturities ranging from 2 – 30 years as further described below. N&B’s indebtedness raised prior to the Merger was used to finance the Special Cash Payment to DuPont, which has been paid, and for the satisfaction of the related transaction fees and expenses. See Note 3 for additional information. N&B Term Loan Facility The N&B Term Loan Facility was funded on February 1, 2021, and provides for a senior unsecured term loan credit facility in an aggregate principal amount of $1.250 billion, comprised of a $625 million three-year tranche (“2024 Term Loan Facility”) and a $625 million five-year tranche (“2026 Term Loan Facility”). Interest for each tranche equals, at the Company’s option, a per annum rate equal to either (x) an adjusted LIBOR rate plus an applicable margin varying from 0.750% to 2.000% for the three-year tranche and from 1.125% to 2.375% for the five-year tranche or (y) a base rate plus an applicable margin varying from 0.000% to 1.000% for the three-year tranche and from 0.125% to 1.375% for the five-year tranche, in each case depending on the class of IFF’s non-credit-enhanced, senior unsecured long-term debt credit rating. The 2024 Term Loan Facility and 2026 Term Loan Facility are subject to customary affirmative and negative covenants and events of default after the Closing Date of the Merger. The 2024 Term Loan Facility and 2026 Term Loan Facility are also subject to a financial covenant requiring maintenance of a maximum consolidated leverage ratio of 4.75x until and including the end of the third full fiscal quarter after the Closing Date of the Merger, stepping down to 4.50x until and including the end of the sixth full fiscal quarter after the Closing Date of the Merger, stepping down further to 3.75x until and including the end of the ninth full fiscal quarter after the Closing Date of the Merger and stepping down further to 3.50x thereafter, with a step-up in connection with certain qualifying acquisitions. The Company was in compliance with all covenants as of March 31, 2021. N&B Senior Notes On September 16, 2020, N&B issued $6.250 billion in aggregate principal amount of senior unsecured notes consisting of: (i) $300 million senior unsecured notes maturing on September 15, 2022 (the “2022 Notes”), bearing interest at a rate of 0.697% per year, payable semi-annually on March 15 and September 15 of each year, beginning March 15, 2021; (ii) $1.000 billion senior unsecured notes maturing on October 1, 2025 (the “2025 Notes”), bearing interest at a rate of 1.230% per year, payable semi-annually on April 1 and October 1 of each year, beginning April 1, 2021; (iii) $1.200 billion senior unsecured notes maturing on October 15, 2027 (the “2027 Notes”), bearing interest at a rate of 1.832% per year, payable semi-annually on April 15 and October 15 of each year, beginning April 15, 2021; (iv) $1.500 billion senior unsecured notes maturing on November 1, 2030 (the “2030 Notes”), bearing interest at a rate of 2.300% per year, payable semi-annually on May 1 and November 1 of each year, beginning May 1, 2021; (v) $750 million senior unsecured notes maturing on November 15, 2040 (the “2040 Notes”), bearing interest at a rate of 3.268% per year, payable semi-annually on May 15 and November 15 of each year, beginning May 15, 2021, and; (vi) $1.500 billion senior unsecured notes maturing on December 1, 2050 (the “2050 Notes”), bearing interest at a rate of 3.468% per year, payable semi-annually on June 1 and December 1 of each year, beginning June 1, 2021. Interest on each series of notes began accruing from September 16, 2020 payable semi-annually in arrears as described above. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. Redemption Provisions The N&B Senior Notes assumed as a result of the Merger may be redeemed by the issuer at any time at the greater of 100% or the discounted present value of the remaining scheduled payments of principal and interest from the redemption date to the maturity date at Treasury Rate (as defined in the applicable indenture) plus (i) 10 basis points in the case of the 2022 Notes, (ii) 15 basis points in the case of the 2025 Notes, (iii) 25 basis points in the case of the 2027 Notes, (iv) 25 basis points in the case of the 2030 Notes, (v) 30 basis points in the case of the 2040 Notes and (vi) 30 basis points in the case of the 2050 Notes. The redemption dates of each of the N&B Senior Notes are provided in the table below:
Notes | Redemption Date
2022 Notes | September 15, 2022
2025 Notes | September 1, 2025
2027 Notes | August 15, 2027
2030 Notes | August 1, 2030
2040 Notes | May 15, 2040
2050 Notes | June 1, 2050
On or after the applicable redemption dates, each series of the N&B Senior Notes may be redeemed by the issuer at a redemption price equal to 100% of the principal amount of the N&B Senior Notes to be redeemed, plus accrued and unpaid interest on the notes to be redeemed to, but excluding, the redemption date. 2022 Term Loan Facility On May 15, 2020, the Company entered into a Term Loan Agreement (as amended on August 25, 2020, the "2022 Term Loan Agreement") with China Construction Bank Corporation, New York Branch, as administrative agent, and the lenders party thereto for a senior unsecured two year term loan facility in an aggregate principal amount of up to $200 million (the "2022 Term Loan Facility"). The loans under the 2022 Term Loan Agreement bear interest, at the Company's option, at a per annum rate equal to either (x) an adjusted LIBOR rate plus an applicable margin varying from 1.225% to 2.475% or (y) a base rate plus an applicable margin varying from 0.225% to 1.475%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company. The Company may voluntarily prepay the term loans without premium or penalty, with the balance payable on the second anniversary of the funding date. There is no required amortization under the 2022 Term Loan Agreement. As of March 31, 2021, the Company had $200 million outstanding in borrowings under the 2022 Term Loan Agreement. The 2022 Term Loan Agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including a maximum ratio of net debt to EBITDA of 4.75x, with step-downs over time, following the close of the N&B Merger.

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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 Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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