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Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
The Company’s debt consists of the following:
December 31,
(Dollars in millions)20232022
Term Loan A$214 $225 
Outstanding revolver— — 
Finance lease and other158 161 
Short-term borrowings35 10 
Total debt principal
407 396 
Less unamortized debt issuance costs and discounts(1)(2)
Total debt, net
406 394 
Less short-term borrowings and current portion of long-term debt(57)(29)
Total long-term debt
$349 $365 

Term Loans
In November 2022, the Company entered into a senior unsecured credit agreement with Bank of America in the amount of $500 million (the “2022 Credit Agreement”) with a maturity of November 29, 2027. The 2022 Credit Agreement provides for a term loan of $225 million bearing interest at a variable rate generally based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.48% to 2.10% depending on the leverage ratio, as defined in the 2022 Credit Agreement, or an alternative variable rate based on the higher of the Bank of America prime rate, the federal funds rate, or a rate generally based on SOFR, in each case subject to additional basis point spread as defined in the 2022 Credit Agreement, (“2022 Term Loan A”). Interest is payable quarterly in arrears. The outstanding balance of the 2022 Term Loan A at December 31, 2023 was $214 million. The fair value of Term Loan A at December 31, 2023 was approximately $211 million, however the Company has the ability to prepay the outstanding principal balance without penalty.
In January 2009, the Company entered into a credit agreement with Finmeccanica S.p.A. (presently Leonardo S.p.A. and Majority Stockholder) in the amount of $2 billion (the “2009 Credit Agreement”). The 2009 Credit Agreement was subsequently assigned to US Holding and had a maturity of November 30, 2023. The 2009 Credit Agreement provided for a term loan that bore interest at a rate of 7.5%, with interest payments due semi-annually on June 20 and December 20 in each year (the “7.5% Term loan”). The outstanding balance of the 7.5% Term loan at December 31, 2021 was $139 million. The fair value of this term loan at December 31, 2021 was $182 million; however the Company had the ability to prepay the outstanding principal balance at the carrying amount without penalty. In November 2022, the Company repaid the aggregate principal amount of $139 million. Upon repayment the 2009 Credit Agreement was terminated.
In June 2017, the Company entered into an unsecured term loan with US Holding in the principal amount of $138 million, the proceeds of which were used to finance the acquisition of Daylight Solutions, Inc. (the “Daylight Term Loan”). The Daylight Term Loan had an outstanding balance of $78 million at December 31, 2021, which approximated its fair value. The Daylight Term Loan matures on October 15, 2024. The Daylight Term Loan had an interest rate of 5.0%, with interest payments due semi-annually on April 15 and October 15. During 2022, the Company repaid the aggregate principal amount of $78 million. Upon repayment the Daylight Term Loan was terminated.
Credit Facilities
The 2022 Credit Agreement provides for a revolving credit facility available for working capital needs of the Company (“the 2022 Revolving Credit Facility”). As of December 31, 2023 the 2022 Revolving
Credit Facility had a limit of $275 million. Loans under the 2022 Revolving Credit Facility bear interest at a variable rate generally based on the SOFR, plus a spread ranging from 1.48% to 2.10% depending on the leverage ratio, as defined in the 2022 Credit Agreement, or an alternative variable rate based on the higher of the Bank of America prime rate, the federal funds rate, or a rate generally based on SOFR, in each case subject to additional basis point spread as defined in the 2022 Credit Agreement, The Company also pays a commitment fee ranging between 0.20% and 0.35% depending on the Company’s leverage ratio applied to the unused balance of the 2022 Revolving Credit Facility. There was no outstanding balance on the 2022 Revolving Credit Facility as of December 31, 2023. The weighted average interest rate on the 2022 Revolving Credit Facility as of December 31, 2023 and 2022 was 6.41% and 4.58%, respectively.
The 2009 Credit Agreement provided for a revolving credit facility available for working capital needs of the Company (the “Revolving Credit Facility”). As of December 31, 2021, the Revolving Credit Facility had a credit limit of $450 million, and an interest rate of LIBOR plus 3.5%. There was a commitment fee of 0.25% applied to the unused balance of the Revolving Credit Facility and there were no compensating balance requirements. There was no balance on the Revolving Credit Facility as of December 31, 2021. The 2009 Credit Agreement was terminated in November 2022.
The Company also maintains uncommitted working capital credit facilities with certain financial institutions in the aggregate of $65 million and $65 million at December 31, 2023 and 2022, respectively (the “Financial Institution Credit Facilities”). The Financial Institution Credit Facilities were guaranteed by Leonardo S.p.A, through approximately January 2023. As of December 31, 2023, none of the Financial Institution Credit facilities are guaranteed by Leonardo S.p.A. The sole purpose of the Financial Institution Credit Facilities is to support standby letter of credit issuances on contracts with customers. The Company had letters of credit outstanding of approximately $41 million and $36 million as of December 31, 2023 and 2022, respectively, which reduces the available capacity of the Financial Institution Credit Facilities by an equal amount.
Finance Lease and Other
As of December 31, 2023, finance lease and other of $158 million includes approximately $111 million related to finance lease liabilities and $47 million related to our Menomonee Falls, WI manufacturing facility, which has been accounted for as a build-to-suit lease with a failed sale leaseback. Approximately $10 million has been recognized as the current portion of long-term debt for the finance lease liabilities and financing liability related to the build-to-suit arrangement.
Short-term Borrowings
As of December 31, 2023 and 2022, the Company recognized $35 million and $10 million, respectively, collected on behalf of the purchasers of our trade receivables pursuant to our factoring arrangements as short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheets, which approximates its fair value. See Note 5: Sale of Receivables for more information.
Interest Paid
Total interest paid associated with our debt was $38 million, $34 million, and $35 million in 2023, 2022 and 2021, respectively. Our effective interest rate was approximately 6.65%, 5.57% and 4.05% for the years ended December 31, 2023, 2022 and 2021, respectively. The interest expense attributable to the amortization of debt issuance costs in 2023 and 2022 was not material and not applicable for 2021.
Maturities
Maturities of debt as of December 31, 2023 are as follows:
(Dollars in millions)
Year Ending December 31,
Total
2024$57 
202521 
202621 
2027188 
20287 
Thereafter113 
Total principal payments
$407