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Bank credit lines and loan facilities | 3 Months Ended
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Mar. 31, 2024
Debt Disclosure [Abstract] |
Bank credit lines and loan facilities | Bank credit lines and loan facilities The Company had the following debt outstanding as of March 31, 2024 and December 31, 2023:
|  | Interest rate as of | Principal amount
| Maturity Date | March 31, 2024 | December 31, 2023 | March 31, 2024 | December 31, 2023
|  |  |  | (in thousands)
Senior Secured Term Loan | July 2028 | 7.302 | % | 7.860 | % | $ | 2,976,213 |  | $ | 3,251,213 |
Senior Secured Notes | July 2026 | 2.875 | % | 2.875 | % | 500,000 |  | 500,000 |
Senior Secured Revolving Loan* | April 2024 | 6.179 | % | 6.720 | % | 50,000 |  | 55,000 |
Total debt |  |  |  | 3,526,213 |  | 3,806,213 |
Less current portion of debt |  |  |  | (79,762) |  | (110,150) |
Total long-term debt |  |  |  | 3,446,451 |  | 3,696,063 |
Less debt issuance costs and debt discount |  |  |  | (26,717) |  | (30,624) |
Total long-term debt, net |  |  |  | $ | 3,419,734 |  | $ | 3,665,439 |
* The final maturity date of the Senior Secured Revolving Loan facility is July 2026. As of March 31, 2024, the contractual maturities of the Company's debt obligations were as follows:
Contractual maturities of debt |  | (in thousands)
2024 (remaining) |  |  |  | $ | 79,762 |
2025 |  |  |  | 29,762 |
2026 |  |  |  | 529,762 |
2027 |  |  |  | 29,762 |
2028 and thereafter |  |  |  | 2,857,165 |
Total |  |  |  | $ | 3,526,213 |
The Company's primary financing arrangements are its senior secured credit facilities (the "Senior Secured Credit Facilities"), which consists of a senior secured term loan and a revolving credit facility, and the senior secured notes (the "Senior Secured Notes"). Senior Secured Credit Facilities On July 1, 2021, the Company completed the acquisition of PRA Health Sciences, Inc. ("PRA") by means of a merger whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of the PRA Health Sciences ("the Merger"). In conjunction with the completion of the Merger, on July 1, 2021, ICON entered into a credit agreement providing for a senior secured term loan facility of $5,515 million and a senior secured revolving loan facility in an initial aggregate principal amount of $300 million (the "Senior Secured Credit Facilities"). The Senior Secured Credit Facility and Senior Secured Notes were issued at a discount of $27.6 million. On May 2, 2023, the Company agreed with its lenders to increase the aggregate principal amount of the senior secured revolving loan facility from $300 million to $500 million. Borrowings under the senior secured term loan facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount, with the remaining balance due at final maturity. The interest rate margin applicable to borrowings under the senior secured term loan facility is USD Term SOFR and a Term SOFR Adjustment depending on the interest period chosen plus an applicable margin which is dependent on the Company's net leverage ratio. At March 31, 2024, the applicable margin is 2.0% (which reflects the Third Amendment). The senior secured term loan facility is subject to a floor of 0.50%. Reflecting the Third Amendment, the interest rate margin applicable to borrowings under the revolving loan facility will be, at the option of the borrower, either (i) the applicable base rate plus an applicable margin of 0.45%, 0.10% or –% based on the Company’s current corporate family rating assigned by S&P of BB (or lower), BB+ or BBB- (or higher), respectively, or (ii) Term SOFR plus a Term SOFR Adjustment on the interest period chosen plus an applicable margin of 1.45%, 1.10%, 0.85%, 0.65%, or 0.50% based on the Company’s current corporate family rating assigned by S&P of BB (or lower), BB+, BBB-, BBB or BBB+ (or higher), respectively. In addition, lenders under the revolving loan facility are entitled to commitment fees as a percentage of the applicable margin at the time of drawing and utilization fees dependent on the proportion of the facility drawn. The Borrowers’ (as defined in the Senior Secured Credit Facility) obligations under the Senior Secured Credit Facilities are guaranteed by ICON and the subsidiary guarantors. The Senior Secured Credit Facilities are secured by a lien on substantially all of ICON’s, the Borrowers’ and each of the subsidiary guarantor’s assets (subject to certain exceptions), and the Senior Secured Credit Facilities will have a first-priority lien on such assets, which will rank pari passu with the lien securing the Senior Secured Notes, subject to other permitted liens. The Company is permitted to make prepayments on the senior secured term loan without penalty. Principal repayments, comprising mandatory and voluntary repayments, during the quarter ended March 31, 2024 and year ended December 31, 2023 were as follows:
Principal repayments | (in thousands)
Quarter 1, 2023 |  | $ | 250,000 |
Quarter 2, 2023 |  | 150,000 |
Quarter 3, 2023 |  | 300,000 |
Quarter 4, 2023 |  | 250,000 |
Total repayments in 2023 |  | 950,000 |
Quarter 1, 2024 |  | 275,000 |
Total repayments in 2024 |  | $ | 275,000 |
The voluntary repayment made during the quarter resulted in an accelerated charge associated with previously capitalized fees of $2.0 million (March 31, 2023: $2.2 million). During the quarter ended March 31, 2024, the Company drew down $50.0 million of the senior secured revolving loan facility and repaid $55.0 million as shown below. As at March 31, 2024, $50.0 million (December 31, 2023: $55.0 million) was drawn under the senior secured revolving loan facility.
|  | Drawdown | Repayment | Closing Balance
|  | (in thousands)
Quarter 1, 2023 |  | $ | 180,000 |  | $ | 100,000 |  | $ | 80,000 |
Quarter 2, 2023 |  | 50,000 |  | 80,000 |  | 50,000 |
Quarter 3, 2023 |  | 75,000 |  | 50,000 |  | 75,000 |
Quarter 4, 2023 |  | 65,000 |  | 85,000 |  | 55,000 |
Total drawdown/repayments in 2023 |  | 370,000 |  | 315,000 |  |
Quarter 1, 2024 |  | 50,000 |  | 55,000 |  | 50,000 |
Total drawdown/repayments in 2024 |  | $ | 50,000 |  | $ | 55,000 |  |
Senior Secured Notes In addition to the Senior Secured Credit Facilities, on July 1, 2021, a subsidiary of the Company issued $500 million in aggregate principal amount of 2.875% senior secured notes (the "Senior Secured Notes") in a private offering (the “Offering”). The Senior Secured Notes will mature on July 15, 2026. Fair Value of Debt The estimated fair value of the Company’s debt was $3,501.4 million at March 31, 2024 (December 31, 2023: $3,793.5 million). The fair values of the Senior Secured Credit Facilities and Senior Secured Notes were determined based on Level 2 inputs, which are based on rates at which the debt is traded among financial institutions. The fair value of the senior secured revolving loan facility is recorded as its carrying value due to the short term duration.

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