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Debt | 12 Months Ended
--- | ---
Dec. 31, 2022
Debt Disclosure [Abstract] |
Debt | DEBT Debt consisted of the following at December 31:
(DOLLARS IN MILLIONS) | Effective Interest Rate |  | 2022 |  | 2021
2022 Notes(3) | 0.69 | % |  | $ | — |  |  | $ | 300 |
2023 Notes(1) | 3.30 | % |  | 300 |  |  | 300 |
2024 Euro Notes(1) | 1.88 | % |  | 532 |  |  | 565 |
2025 Notes(3) | 1.22 | % |  | 1,000 |  |  | 1,001 |
2026 Euro Notes(1) | 1.93 | % |  | 845 |  |  | 900 |
2027 Notes(3) | 1.56 | % |  | 1,215 |  |  | 1,218 |
2028 Notes(1) | 4.57 | % |  | 398 |  |  | 397 |
2030 Notes(3) | 2.21 | % |  | 1,510 |  |  | 1,511 |
2040 Notes(3) | 3.04 | % |  | 774 |  |  | 775 |
2047 Notes(1) | 4.44 | % |  | 495 |  |  | 494 |
2048 Notes(1) | 5.12 | % |  | 787 |  |  | 786 |
2050 Notes(3) | 3.21 | % |  | 1,571 |  |  | 1,572 |
2024 Term Loan Facility(4) | 3.65 | % |  | 625 |  |  | 625 |
2026 Term Loan Facility(4) | 4.92 | % |  | 625 |  |  | 625 |
Commercial Paper(5) |  |  | 187 |  |  | 324 |
Amended Revolving Credit facility(6) |  |  | 100 |  |  | — |
Bank overdrafts and other |  |  | 6 |  |  | 7 |
Total debt |  |  | $ | 10,970 |  |  | $ | 11,400 |
Less: Short term borrowings(2) |  |  | (597) |  |  | (632) |
Total Long-term debt |  |  | $ | 10,373 |  |  | $ | 10,768 |
_______________________ (1)Amount is net of unamortized discount and debt issuance costs. (2)Includes bank borrowings, overdrafts, current portion of long-term debt and commercial paper. (3)Assumed by the Company as part of the N&B Merger. Amount is net of unamortized premium and debt issuance costs. (4)Assumed by the Company as part of the N&B Merger and recorded at fair value. (5)The effective interest rate of commercial paper issuances fluctuate as short-term interest rates and demand fluctuate, and deferred debt issuance costs are immaterial. Additionally, the effective interest rate of commercial paper is not meaningful as issuances do not materially differ from short-term interest rates. Proceeds from the issuance of commercial paper include $225 million of proceeds with original maturities greater than three months. (6)The interest rate on the Amended Revolving Credit Facility is, at the applicable borrower's option, a per annum rate equal to either (x) an eurocurrency rate plus an applicable margin varying from 1.000% to 1.625% or (y) a base rate plus an applicable margin varying from 0.000% to 0.625%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company. 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 to 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. On and after the Closing Date of the N&B Transaction, 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, with step downs to 3.50x over time, with the first step-down which occurred after the fiscal quarter ended December 31, 2021 and the final step-down occurring after the fiscal quarter ending June 30, 2023, with a step-up if the Company consummates certain qualified acquisitions. On August 4, 2022, the Company and certain of its subsidiaries entered into Amendment No. 2 To Credit Agreement which amended and restated the Company’s Credit Agreement among the Company, certain of its subsidiaries, the banks, financial institutions and other institutional lenders party thereto, and Morgan Stanley Senior Funding, Inc. as administrative agent. Pursuant to the amendment, the 2024 Term Loan Facility and 2026 Term Loan Facility are subject to a financial covenant requiring maintenance of a maximum consolidated leverage ratio of 4.50x until and including the end of the fiscal quarter ending on June 30, 2023, stepping down to 4.25x until and including the end of the fiscal quarter ending on March 31, 2024, stepping down further to 4.00x until and including the end of the fiscal quarter ending on June 30, 2024, stepping down further to 3.75x until and including the end of the fiscal quarter ending on September 30, 2024, 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 December 31, 2022. 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 which matured 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. On September 15, 2022, the Company repaid the full $300 million outstanding of its 2022 Notes at maturity. Amended Revolving Credit Facility On August 4, 2022, the Company and certain of its subsidiaries entered into the Amendment No. 1 To Credit Agreement which amended and restated the Company’s Revolving Credit Facility (previously and more recently amended and restated as of July 28, 2021) among the Company, certain of its subsidiaries, the banks, financial institutions and other institutional lenders party thereto, and Citibank, N.A. as administrative agent. The interest rate on the Amended Revolving Credit Facility is, at the applicable borrower's option, a per annum rate equal to either (x) an eurocurrency rate plus an applicable margin varying from 1.000% to 1.625% or (y) a base rate plus an applicable margin varying from 0.000% to 0.625%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company. The Amended Revolving Credit Facility is available for general corporate purposes of each borrower and its subsidiaries. The obligations under the Amended Revolving Credit Facility are unsecured and the Company has guaranteed the obligations of each other borrower under the Amended Revolving Credit Facility. The Company pays a commitment fee on the aggregate unused commitments; such fee is not material. The Amended Revolving Credit Agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including a maximum permitted ratio of Net Debt to Consolidated EBITDA of 4.50x as of December 31, 2022, with step-downs to 3.50x over time, with a step-up if the Company consummates certain qualifying acquisitions. In connection with the initial issuance of the Revolving Credit Facility, the Company incurred $1 million of debt issuance costs. As of December 31, 2022, the Company was in compliance with all covenants under the Amended Revolving Credit Facility. As of December 31, 2022, total capacity under the Amended Revolving Credit Facility was $2.000 billion, with $100 million outstanding borrowings. Under the amended terms of the Revolver Credit Agreement, the Amended Revolving Credit Facility increased from $1.000 billion to $2.000 billion, maturing on July 28, 2026. At the option of the Company, the facility may be increased to $2.500 billion subject to certain conditions. As the Amended Revolving Credit Facility is a multi-year revolving credit agreement, the Company classifies as long-term debt the portion that it has the intent and ability to maintain outstanding longer than 12 months. During 2022, the Company had draw downs of $550 million and repayments of $450 million under the Amended Revolving Credit Facility. There were no draw downs or repayments under the Amended Revolving Credit Facility in 2021. 2018 Senior Unsecured Notes On September 25, 2018 the Company issued €300 million aggregate principal amount of senior unsecured notes that matured on September 25, 2021 (the “2021 Euro Notes”). The 2021 Notes bore interest at a rate of 0.5% per year, payable annually on September 25 of each year, beginning September 25, 2019. Total proceeds from the issuance of the 2021 Notes, net of underwriting discounts and offering costs, were €298 million ($350 million in USD). During the third quarter of 2021, the Company repaid the 2021 Euro Notes in a payment of €300 million. The repayment on the 2021 Euro Notes was funded primarily from the Company’s existing cash balances, with the remainder coming from the issuance of commercial paper. On September 25, 2018, the Company issued €800 million aggregate principal amount of senior unsecured notes that mature on September 25, 2026 (the “2026 Euro Notes”). The 2026 Notes bear interest at a rate of 1.8% per year, payable annually on September 25 of each year, beginning September 25, 2019. Total proceeds from the issuance of the 2026 Notes, net of underwriting discounts and offering costs, were €794 million ($932 million in USD). On September 26, 2018, the Company issued $400 million aggregate principal amount of senior unsecured notes that mature on September 26, 2028 (the “2028 Notes”). The 2028 Notes bear interest at a rate of 4.45% per year, payable semi-annually on March 26 and September 26 of each year, beginning March 26, 2019. Total proceeds from the issuance of the 2028 Notes, net of underwriting discounts and offering costs, were $397 million. On September 26, 2018, the Company issued $800 million aggregate principal amount of senior unsecured notes that mature on September 26, 2048 (the “2048 Notes” and collectively with the 2021 Euro Notes, 2026 Euro Notes, 2020 Notes, 2028 Notes, the “2018 Senior Unsecured Notes”). The 2048 Notes bear interest at a rate of 5.0% per year, payable semi-annually on March 26 and September 26 of each year, beginning March 26, 2019. Total proceeds from the issuance of the 2048 Notes, net of underwriting discounts and offering costs, were $787 million. As discussed in Note 16, the 2021 Euro Notes and 2026 Euro Notes have been designated as a hedge of the Company’s net investment in certain subsidiaries. 2023 Notes On April 4, 2013, the Company issued $300 million face amount of 3.20% Senior Notes (“2023 Notes”) due 2023 at a discount of less than $1 million. The Company received proceeds related to the issuance of these 2023 Notes of $298 million which was net of the less than $1 million discount and a $2 million underwriting discount (recorded as deferred financing costs). In addition, the Company incurred $1 million of other deferred financing costs in connection with the debt issuance. The discount and deferred financing costs are being amortized as interest expense over the term of the 2023 Notes. The 2023 Notes bear interest at a rate of 3.20% per year, with interest payable on May 1 and November 1 of each year, commencing on November 1, 2013. The 2023 Notes mature on May 1, 2023. 2024 Euro Notes On March 14, 2016, the Company issued €500 million face amount of 1.75% Senior Notes (“2024 Euro Notes”) due 2024 at a discount of €1 million. The Company received proceeds related to the issuance of these 2024 Euro Notes of €496 million which was net of the €1 million discount and €3 million underwriting discount (recorded as deferred financing costs). In addition, the Company incurred $1 million of other deferred financing costs in connection with the debt issuance. In connection with the debt issuance, the Company entered into pre-issuance hedging transactions that were settled upon issuance of the debt and resulted in a loss of approximately $3 million. The discount, deferred financing costs and pre-issuance hedge loss are being amortized as interest expense over the eight year term of the debt. The 2024 Euro Notes bear interest at a rate of 1.75% per annum, with interest payable on March 14 of each year, commencing on March 14, 2017. The 2024 Euro Notes will mature on March 14, 2024. As discussed in Note 16, the 2024 Euro Notes have been designated as a hedge of the Company’s net investment in certain subsidiaries. 2047 Notes On May 18, 2017, the Company issued $500 million face amount of 4.375% Senior Notes (“2047 Notes”) due 2047 at a discount of $2 million. The Company received proceeds related to the issuance of these 2047 Notes of $494 million which was net of the $2 million discount and $4 million in underwriting fees (recorded as deferred financing costs). In addition, the Company incurred $1 million in legal and professional costs associated with the issuance and such costs were recorded as deferred financing costs. In connection with the debt issuance, the Company entered into pre-issuance hedging transactions that were settled upon issuance of the debt and resulted in a loss of approximately $5 million. The discount, deferred financing costs and pre-issuance hedge loss are being amortized as interest expense over the 30 year term of the debt. The 2047 Notes bear interest at a rate of 4.375% per annum, with interest payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 2017. The 2047 Notes will mature on June 1, 2047. 2018 Term Loan Facility On June 6, 2018, the Company entered into a Term Loan Credit Agreement (as amended on July 13, 2018, January 17, 2020 and August 25, 2020, the “2018 Term Loan Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as the administrative agent, and the lenders party thereto, pursuant to which the lenders thereunder committed to provide, a senior unsecured term loan facility in an original aggregate principal amount of up to $350 million (the “2018 Term Loan Facility”), which matured on October 1, 2021. In 2019, the Company made payments of $110 million on the 2018 Term Loan Facility, and during the third quarter of 2021, the Company repaid the remainder of the 2018 Term Loan Facility in two payments of $120 million each. The repayments on the 2018 Term Loan Facility were funded primarily from the Company's existing cash balances, with the remainder coming from the issuance of commercial paper. 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, pursuant to which the lenders thereunder have committed to provide 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 bore 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 could 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. During the fourth quarter of 2021, the Company elected to voluntarily prepay the outstanding balance of the 2022 Term Loan Facility. Commercial Paper During 2022, the Company had gross issuances of $6.040 billion and repayments of $6.177 billion under the commercial paper program. The commercial paper issued had original maturities of less than 126 days. During 2021, the Company had gross issuances of $800 million and repayments of $476 million under the commercial paper program. The Commercial Paper Program is backed by the borrowing capacity available under the Revolving Credit Facility. The effective interest rate of commercial paper issuances does not materially differ from short-term interest rates, which fluctuate due to market conditions and as a result may impact our interest expense. Redemption Provisions The 2023 Notes, 2024 Euro Notes, 2026 Euro Notes, 2028 Notes, 2047 Notes, and 2048 Notes (collectively, the “Notes”) share the same redemption provisions. Upon 30 days’ notice to holders of the Notes, the Company may redeem the Notes for cash in whole, at any time, or in part, from time to time, prior to maturity, at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the indenture governing the Notes. However, no make-whole premium will be paid for redemptions of each note on or after the following date:
Note |  | Redemption Date
2023 Notes |  | February 1, 2023
2024 Euro Notes |  | December 14, 2023
2026 Euro Notes |  | June 25, 2026
2028 Notes |  | June 26, 2028
2047 Notes |  | December 1, 2046
2048 Notes |  | March 26, 2048
The indenture of the Notes provides for customary events of default and contains certain negative covenants that limit the ability of the Company and its subsidiaries to grant liens on assets, or to enter into sale-leaseback transactions. In addition, subject to certain limitations, in the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of the Notes below investment grade rating by both Moody’s Investors Services, Inc., Standard & Poor’s Ratings Services and Fitch Ratings Inc. within a specified time period, the Company will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of repurchase. The 2025 Notes, 2027 Notes, 2030 Notes, 2040 Notes and 2050 Notes (collectively, 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) 15 basis points in the case of the 2025 Notes, (ii) 25 basis points in the case of the 2027 Notes, (iii) 25 basis points in the case of the 2030 Notes, (iv) 30 basis points in the case of the 2040 Notes and (v) 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
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. Outstanding Borrowings The following table shows the contractual maturities of the Company's long-term debt as of December 31, 2022.
| Payments Due by Period
(DOLLARS IN MILLIONS) | Total |  | Less than 1 Year |  | 1-3 Years |  | 3-5 Years |  | More than 5 Years
Total Outstanding Borrowings | $ | 10,580 |  |  | $ | 300 |  |  | $ | 2,156 |  |  | $ | 2,674 |  |  | $ | 5,450 |

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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 https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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