XML 25 R17.htm IDEA: XBRL DOCUMENT v3.24.3
Bank credit lines, loan facilities and notes
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Bank credit lines, loan facilities and notes Bank credit lines, loan facilities and notes
The Company had the following debt outstanding as of September 30, 2024 and December 31, 2023:

Interest rate as ofPrincipal amount
Maturity DateSeptember 30,
2024		December 31,
2023		September 30,
2024		December 31,
2023
(in thousands)
Senior Secured Term LoanJuly 20286.604 %7.860 %$953,890 $3,251,213 
Senior Secured Notes (the "2026 Notes")
July 20262.875 %2.875 %500,000 500,000 
Senior Secured Revolving LoanJuly 2026— %6.720 %— 55,000 
Senior Secured Notes (the "2027 Notes")*May 20275.809 %— %750,000 — 
Senior Secured Notes (the "2029 Notes")*May 20295.849 %— %750,000 — 
Senior Secured Notes (the "2034 Notes")*May 20346.000 %— %500,000 — 
Total debt3,453,890 3,806,213 
Less current portion of debt(29,762)(110,150)
Total long-term debt3,424,128 3,696,063 
Less debt issuance costs and debt discount
(21,760)(30,624)
Total long-term debt, net$3,402,368 $3,665,439 
*Issued May 8, 2024

As of September 30, 2024, the contractual maturities of the Company's debt obligations were as follows:

Contractual maturities of debt(in thousands)
2024 (remaining)$7,441 
202529,762 
2026529,762 
2027779,762 
2028 and thereafter2,107,163 
Total$3,453,890 

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, the 2026 Notes and the New Notes.

The New Notes

On May 8, 2024, ICON Investments Six Designated Activity Company (the "Issuer"), a wholly-owned subsidiary of ICON plc, issued $2 billion senior secured notes ("the New Notes"). The New Notes were issued in aggregate principal amounts of: $750 million 5.809% Senior Secured Notes due 2027 (the "2027 Notes"), $750 million 5.849% Senior Secured Notes due 2029 (the "2029 Notes") and $500 million 6.000% Senior Secured Notes due 2034 (the "2034 Notes").

The Company paid an underwriting discount of $6.8 million on the New Notes being: 0.250% of the principal amount of the 2027 Notes, 0.350% of the principal amount of the 2029 Notes and 0.450% of the 2034 Notes. Further, the 2034 Notes were issued at a discount of $0.5 million (issued at 99.896% of par).

The proceeds from the issuance were used to repay a portion of the senior secured term loan outstanding under the Senior Secured Credit Facilities and to pay fees, costs and expenses related to the offering.

Interest on the New Notes is payable on May 8 and November 8 of each year, commencing on November 8, 2024. Unless previously redeemed, the 2027 Notes will mature on May 8, 2027, the 2029 Notes will mature on May 8, 2029 and the 2034 Notes will mature on May 8, 2034.
The New Notes are guaranteed on a senior secured basis by ICON and its existing and future wholly owned subsidiaries, in each case that guarantee the obligations under our Senior Secured Credit Facilities and the 2026 Notes. The New Notes are the senior secured obligation of the Issuer and the Guarantors and rank equally in right of payment to all of the Issuer’s and Guarantors’ existing and future senior debt and senior in right of payment to all of the Issuer's and Guarantors' existing and future subordinated debt. The New Notes and the guarantees are secured on a first-lien basis by substantially all of the existing and future assets of the Issuer and the Guarantors that also secure the Issuer’s and the Guarantors’ obligations under the Senior Secured Credit Facilities and the 2026 Notes on a pari passu basis, subject to permitted liens, and the liens on the collateral securing the New Notes rank equally in priority with the liens on the collateral securing borrowings and guarantees under the Senior Secured Credit Facilities, the 2026 Notes and any other future pari passu first lien indebtedness.

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"). 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 September 30, 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 2026 Notes and the New 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 nine months ended September 30, 2024 and year ended December 31, 2023 were as follows:

Principal repayments(in thousands)
Quarter 1, 2023$(250,000)
Quarter 2, 2023(150,000)
Quarter 3, 2023(300,000)
Quarter 4, 2023(250,000)
Total repayments in 2023(950,000)
Quarter 1, 2024(275,000)
Quarter 2, 2024(2,014,882)
Quarter 3, 2024(7,441)
Total repayments in 2024$(2,297,323)

There has been no voluntary repayment made during the quarter. The voluntary repayment made during the nine months ended September 30, 2024 resulted in an accelerated charge associated with previously capitalized fees of $16.9 million (September 30, 2023: $5.9 million).
During the nine months ended September 30, 2024, the Company drew down $243.0 million of the senior secured revolving loan facility and repaid $298.0 million as shown below. As at September 30, 2024, $nil (December 31, 2023: $55 million) was drawn under the senior secured revolving loan facility.

Drawdown RepaymentClosing Balance
(in thousands)
Quarter 1, 2023$180,000 $(100,000)$80,000 
Quarter 2, 202350,000 (80,000)50,000 
Quarter 3, 202375,000 (50,000)75,000 
Quarter 4, 202365,000 (85,000)55,000 
Total drawdown/(repayments) in 2023370,000 (315,000)
Quarter 1, 202450,000 (55,000)50,000 
Quarter 2, 2024143,000 (193,000)— 
Quarter 3, 202450,000 (50,000)— 
Total drawdown/(repayments) in 2024$243,000 $(298,000)$— 

2026 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 "2026 Notes") in a private offering (the “Offering”). The 2026 Notes will mature on July 15, 2026.

Fair Value of Debt
The estimated fair value of the Company’s debt was $3,538.9 million at September 30, 2024 (December 31, 2023: $3,793.5 million). The fair values of the Senior Secured Credit Facilities, the 2026 Notes and the New 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.