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Debt | 12 Months Ended
--- | ---
Dec. 31, 2020
Debt Disclosure [Abstract] |
Debt | 10. Debt Overview Our debt obligations consist of the following:
|  | December 31, |
|  | 2020 |  |  | 2019 |
|  | (Dollars in millions) |
Term Debt, interest rate of 2.6% and 4.8%, respectively |  | $ | 664.7 |  |  | $ | 671.5 |
Revolving Credit Facility ($300.0 million available capacity less amounts reserved for letters of credit, which were $0.4 million and $1.9 million, respectively) |  |  | — |  |  |  | — |
Canada Line of Credit (CDN $7.0 million available capacity, which was fully utilized; USD $5.4 million and USD $5.4 million, respectively) |  |  | — |  |  |  | — |
Financing lease liabilities (Please refer to Note 16) |  |  | 8.8 |  |  |  | 12.4 |
Total debt |  |  | 673.5 |  |  |  | 683.9 |
Less unamortized discount on Term Debt |  |  | 1.2 |  |  |  | 1.4 |
Less unamortized debt issuance costs on Term Debt |  |  | 4.5 |  |  |  | 5.4 |
Less current portion of long-term debt |  |  | 7.2 |  |  |  | 10.8 |
Long-term debt, less current portion |  | $ | 660.6 |  |  | $ | 666.3 |
Senior Secured Credit Facilities Principal Amounts and Maturity Dates On April 30, 2018, we completed the refinancing of our debt by entering into a new credit agreement. Pursuant to the new credit agreement, we became borrower of (i) a $680.0 million term loan debt facility (the “Term Debt”) and (ii) a $300.0 million revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Senior Secured Credit Facility”). The obligations of Ceridian under the Senior Credit Facilities are secured by first priority security interests in substantially all of the assets of Ceridian and the domestic subsidiary guarantors, subject to permitted liens and certain exceptions. In connection with the refinancing of our debt, we recognized a loss on debt extinguishment of $7.1 million within interest expense, net on our consolidated statement of operations during the year ended December 31, 2018. Interest The effective interest rate on the Term Debt at December 31, 2020, and 2019, was 2.6% and 4.8%, respectively. The Term Debt was initially subject to an interest rate of LIBOR plus 3.25%. As a result of a ratings upgrade on March 26, 2019, of our Senior Secured Credit Facility by Moody’s Investor Service, from B3 to B2, the Company’s floating rate Term Debt interest rate was reduced from LIBOR plus 3.25% to LIBOR plus 3.00%, so long as the rating is maintained. On February 19, 2020, we completed the first amendment to the Senior Secured Credit Facility in which the interest rate was reduced from LIBOR plus 3.00% to LIBOR plus 2.5%. Further, the interest rate trigger under the applicable rating by Moody’s Investor Service was removed by the first amendment. Accrued interest related to the Senior Secured Credit Facility was $0.1 million and $0.1 million as of December 31, 2020, and 2019, respectively, and is included within Other accrued expenses in our consolidated balance sheets. Financing Costs and Issuance Discounts In connection with our debt refinancing, we capitalized $3.6 million of additional financing costs and wrote off $0.5 million of existing unamortized deferred financing costs, which was included in the loss on extinguishment of debt. The Term Debt had associated unamortized deferred financing costs of $5.7 million and $6.8 million at December 31, 2020, and 2019, respectively, which are being amortized at an effective interest rate of 5.3%. Collateral and Guarantees The Senior Secured Credit Facility names us as the sole borrower and is unconditionally guaranteed by our domestic, wholly-owned financially material restricted subsidiaries, subject to certain customary exceptions. The 2018 Senior Secured Credit Facility is secured by a perfected first priority security interest, subject to certain exceptions (including customer trust funds), in substantially all of our and the subsidiary guarantors’ tangible and intangible assets. The security interest includes a pledge of the capital stock of certain of our direct and indirect material restricted subsidiaries. Representations, Warranties and Covenants The documents governing the Senior Secured Credit Facility contain certain customary representations and warranties. In addition, those documents contain customary covenants restricting our ability and certain of our subsidiaries’ ability to, among other things: incur additional indebtedness, issue disqualified stock and preferred stock; create liens; declare dividends; redeem capital stock; make investments; engage in a materially different line of business; engage in certain mergers, consolidations, acquisitions, asset sales, or other fundamental changes; engage in certain transactions with affiliates; enter into certain restrictive agreements; make prepayments on any subordinated indebtedness; modify junior financing documentation; and make changes to our fiscal year. The Senior Secured Credit Facility documents contain a requirement that we maintain a ratio of adjusted first lien debt to Credit Facility EBITDA below specified levels on a quarterly basis; however, such requirement is applicable only if more than 35% of the Revolving Credit Facility is drawn. On April 2, 2020, in light of the uncertainty and volatility in the global financial markets resulting from the COVID-19 pandemic, we elected to borrow $295.0 million under the 2018 Revolving Credit Facility as a precautionary measure to increase our cash position and to preserve financial flexibility. In December 2020, we repaid the amount drawn on the revolving credit facility and as of December 31, 2020, no portion of the Revolving Credit Facility was drawn. Events of Default Events of default under the 2018 Senior Secured Credit Facility documents include, but are not limited to: failure to pay interest, principal and fees, or other amounts when due; material breach of any representation or warranty; covenant defaults; cross defaults to other material indebtedness; events of bankruptcy, invalidity of security interests; a change of control; material judgments for payment of money; involuntary acceleration of any debt; and other customary events of default. There were no events of default as of December 31, 2020. Senior Notes General Description On October 1, 2013, we issued the Senior Notes due in 2021 in the principal amount of $475.0 million. Using the net proceeds received from the IPO and concurrent private placement, we satisfied and discharged the indenture governing the Senior Notes on April 30, 2018, and the Senior Notes were redeemed on May 30, 2018. In connection with the redemption of the Senior Notes, we recognized a loss on extinguishment of debt of $18.6 million within interest expense, net on our consolidated statement of operations during the year ended December 31, 2018. Financing Costs and Issuance Discounts On May 30, 2018, the redemption date, the Senior Notes had unamortized deferred financing costs of $5.5 million, which were included in the loss on extinguishment of debt. Other Information Relating to Indebtedness Future Payments and Maturities of Debt The future principal payments and maturities of our indebtedness, excluding financing lease obligations, are as follows:
Years Ending December 31, |  | Amount |
|  | (Dollars in millions) |
2021 |  | $ | 6.8 |
2022 |  |  | 6.8 |
2023 |  |  | 6.8 |
2024 |  |  | 6.8 |
2025 |  |  | 637.5 |
|  | $ | 664.7 |
We may be required to make additional payments on the Term Debt from various sources, including proceeds of certain indebtedness which may be incurred from time to time, certain asset sales, and a certain percentage of cash flow. There is an excess cash flow calculation associated with the Term Debt, and based on this calculation, we are not required to make a prepayment on the 2018 Term Debt in 2021. Fair Value of Debt Our debt does not trade in active markets. Based on the borrowing rates currently available to us for bank loans with similar terms and average maturities and the limited trades of our debt, the fair value of our indebtedness was estimated to be $657.6 million and $675.1 million as of December 31, 2020, and 2019, respectively. Other Debt Financing Ceridian Canada had available a committed bank credit facility that provides up to CDN $7.0 million, for issuance of letters of credit as of December 31, 2020 and 2019. The credit facility is a discretionary line at the option of the bank. The amount of letters of credit outstanding under this facility were CDN $7.0 million (USD $5.4 million) and CDN $7.0 million (USD $5.4 million) at December 31, 2020, and 2019, respectively.

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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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