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LONG-TERM DEBT | 3 Months Ended
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Mar. 31, 2020
Debt Disclosure [Abstract] |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consists of:
| March 31, 2020 |  | December 31, 2019
| (In thousands)
MTCH debt: |  |  |
MTCH Term Loan due February 13, 2027 | $ | 425,000 |  |  | $ | 425,000 |
6.375% Senior Notes due June 1, 2024 (the "6.375% MTCH Senior Notes"); interest payable each June 1 and December 1 | 400,000 |  |  | 400,000 |
5.00% Senior Notes due December 15, 2027 (the "5.00% MTCH Senior Notes"); interest payable each June 15 and December 15 | 450,000 |  |  | 450,000 |
5.625% Senior Notes due February 15, 2029 (the "5.625% MTCH Senior Notes"); interest payable each February 15 and August 15 | 350,000 |  |  | 350,000 |
4.125% Senior Notes due August 1, 2030 (the "4.125% MTCH Senior Notes"); interest payable each February 1 and August 1; commencing August 1, 2020 | 500,000 |  |  | — |
Total MTCH long-term debt | 2,125,000 |  |  | 1,625,000 |
Less: unamortized original issue discount | 6,618 |  |  | 6,282 |
Less: unamortized debt issuance costs | 20,428 |  |  | 15,235 |
Total MTCH debt, net | 2,097,954 |  |  | 1,603,483 |
ANGI debt: |  |  |
ANGI Term Loan due November 5, 2023 | 244,063 |  |  | 247,500 |
Less: current portion of ANGI Term Loan | 13,750 |  |  | 13,750 |
Less: unamortized debt issuance costs | 1,670 |  |  | 1,804 |
Total ANGI debt, net | 228,643 |  |  | 231,946 |
IAC debt: |  |  |
0.875% Exchangeable Senior Notes due October 1, 2022 (the "2022 Exchangeable Notes"); interest payable each April 1 and October 1 | 517,500 |  |  | 517,500 |
0.875% Exchangeable Senior Notes due June 15, 2026 (the "2026 Exchangeable Notes"); interest payable each June 15 and December 15 | 575,000 |  |  | 575,000 |
2.00% Exchangeable Senior Notes due January 15, 2030 (the "2030 Exchangeable Notes"); interest payable each January 15 and July 15 | 575,000 |  |  | 575,000 |
Total IAC long-term debt | 1,667,500 |  |  | 1,667,500 |
Less: unamortized original issue discount | 340,688 |  |  | 351,605 |
Less: unamortized debt issuance costs | 28,401 |  |  | 29,752 |
Total IAC debt, net | 1,298,411 |  |  | 1,286,143 |
Total long-term debt, net | $ | 3,625,008 |  |  | $ | 3,121,572 |
MTCH Senior Notes The 6.375% MTCH Senior Notes were issued on June 1, 2016 and are currently redeemable. These notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest thereon to the applicable redemption date. The 5.00% MTCH Senior Notes were issued on December 4, 2017. At any time prior to December 15, 2022, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest thereon to the applicable redemption date. The 5.625% MTCH Senior Notes were issued on February 15, 2019. The proceeds were used to repay outstanding borrowings under the MTCH Credit Facility, to pay expenses associated with the offering, and for general corporate purposes. At any time prior to February 15, 2024, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest thereon to the applicable redemption date. The 4.125% MTCH Senior Notes were issued on February 11, 2020. The proceeds from the offering will be used to fund a portion of the cash consideration of $3.00 per MTCH common share that will be payable in connection with the Separation. If the Separation is not consummated, the proceeds will be used by MTCH for general corporate purposes. At any time prior to May 1, 2025, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest thereon to the applicable redemption date. The indentures governing the 6.375% and 5.00% MTCH Senior Notes contain covenants that would limit MTCH's ability to pay dividends, make distributions or repurchase MTCH stock in the event a default has occurred or MTCH's consolidated leverage ratio (as defined in the indentures) exceeds 5.0 to 1.0. At March 31, 2020, there were no limitations pursuant thereto. There are additional covenants in these indentures that limit MTCH's ability and the ability of its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event MTCH is not in compliance with certain ratios set forth in the indentures, and (ii) incur liens, enter into agreements restricting MTCH subsidiaries' ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell substantially all of their assets. The indentures governing the 5.625% and 4.125% MTCH Senior Notes are less restrictive than the indentures governing the 6.375% and 5.00% MTCH Senior Notes and generally only limits MTCH's ability and the ability of its subsidiaries to, among other things, create liens on assets and limits MTCH's ability to consolidate, merge, sell or otherwise dispose of all or substantially all of its assets. MTCH's Senior Notes are ranked equally with each other. MTCH Term Loan and MTCH Credit Facility At both March 31, 2020 and December 31, 2019, the outstanding balance on the MTCH Term Loan was $425 million. On February 13, 2020, the MTCH Term Loan was amended to reprice the outstanding balance to LIBOR plus 1.75% and extend its maturity to February 13, 2027. Prior to the amendment, the MTCH Term Loan bore interest at LIBOR plus 2.50%. The interest rate was 3.46% and 4.44% at March 31, 2020 and December 31, 2019, respectively. The MTCH Term Loan provides for annual principal payments as part of an excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio contained in the credit agreement. Interest payments are due at least quarterly through the term of the loan. At March 31, 2020, MTCH has a $750 million revolving credit facility (the "MTCH Credit Facility"). On February 13, 2020, the MTCH Credit Facility was amended to increase the available borrowing capacity from $500 million to $750 million, reduce interest rate margins by 0.125%, and extend its maturity from December 7, 2023 to February 13, 2025. At March 31, 2020 and December 31, 2019, there were no outstanding borrowings under the MTCH Credit Facility. The annual commitment fee on undrawn funds is based on the current consolidated net leverage ratio and was 30 basis points and 25 basis points at March 31, 2020 and December 31, 2019, respectively. Borrowings under the MTCH Credit Facility bear interest, at MTCH's option, at a base rate or LIBOR, in each case plus an applicable margin, which is based on MTCH's consolidated net leverage ratio. The terms of the MTCH Credit Facility require MTCH to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0. The MTCH Term Loan and MTCH Credit Facility contain covenants that would limit MTCH’s ability to pay dividends, make distributions or repurchase MTCH stock in the event MTCH’s secured net leverage ratio exceeds 2.0 to 1.0, while the MTCH Term Loan remains outstanding and, thereafter, if the consolidated net leverage ratio exceeds 4.0 to 1.0, or in the event a default has occurred. At March 31, 2020, there were no limitations pursuant thereto. There are additional covenants under these MTCH debt agreements that limit the ability of MTCH and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. Obligations under the MTCH Credit Facility and MTCH Term Loan are unconditionally guaranteed by certain MTCH wholly-owned domestic subsidiaries and are also secured by the stock of certain MTCH domestic and foreign subsidiaries. The MTCH Term Loan and outstanding borrowings, if any, under the MTCH Credit Facility rank equally with each other, and have priority over the MTCH Senior Notes to the extent of the value of the assets securing the borrowings under the MTCH credit agreement. ANGI Term Loan and ANGI Credit Facility The outstanding balance of the ANGI Term Loan was $244.1 million and $247.5 million at March 31, 2020 and December 31, 2019, respectively. There are quarterly principal payments of $3.4 million through December 31, 2021, $6.9 million for the one-year period ending December 31, 2022 and $10.3 million through maturity of the loan when the final amount of $161.6 million is due. Additionally, interest payments are due at least quarterly through the term of the loan. At both March 31, 2020 and December 31, 2019, the ANGI Term Loan bore interest at LIBOR plus 1.50%, or 2.28% and 3.25%, respectively. The spread over LIBOR is subject to change in future periods based on ANGI's consolidated net leverage ratio. The terms of the ANGI Term Loan require ANGI to maintain a consolidated net leverage ratio of not more than 4.5 to 1.0 and a minimum interest coverage ratio of not less than 2.0 to 1.0 (in each case as defined in the credit agreement). The ANGI Term Loan also contains covenants that would limit ANGI’s ability to pay dividends, make distributions or repurchase ANGI stock in the event a default has occurred or ANGI’s consolidated net leverage ratio exceeds 4.25 to 1.0. At March 31, 2020, there were no limitations pursuant thereto. There are additional covenants under the ANGI Term Loan that limit the ability of ANGI and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. The $250 million revolving credit facility (the "ANGI Credit Facility") expires on November 5, 2023. At March 31, 2020 and December 31, 2019, there were no outstanding borrowings under the ANGI Credit Facility. The annual commitment fee on undrawn funds is based on ANGI's consolidated net leverage ratio most recently reported and was 25 basis points at both March 31, 2020 and December 31, 2019. Borrowings under the ANGI Credit Facility bear interest, at ANGI's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is based on ANGI's consolidated net leverage ratio. The financial and other covenants are the same as those for the ANGI Term Loan. The ANGI Term Loan and ANGI Credit Facility are guaranteed by ANGI's wholly-owned material domestic subsidiaries and are secured by substantially all assets of ANGI and the guarantors, subject to certain exceptions. IAC Exchangeable Notes On October 2, 2017, IAC FinanceCo, Inc., a direct, wholly-owned subsidiary of the Company issued $517.5 million aggregate principal amount of its 2022 Exchangeable Notes. During 2019, IAC FinanceCo 2, Inc. and IAC FinanceCo 3, Inc., direct, wholly-owned subsidiaries of the Company, issued $575.0 million aggregate principal amount of its 2026 Exchangeable Notes and $575.0 million aggregate principal amount of its 2030 Exchangeable Notes, respectively. The 2022, 2026 and 2030 Exchangeable Notes (collectively the "Exchangeable Notes") are guaranteed by the Company. The following table presents detail of the exchangeable feature:
|  | Number of shares of the Company's Common Stock into which each $1,000 of Principal of the Exchangeable Notes is Exchangeable* |  | Approximate Equivalent Exchange Price per Share* |  | Exchangeable Date
2022 Exchangeable Notes |  | 6.5713 |  | $ | 152.18 |  |  | July 1, 2022
2026 Exchangeable Notes |  | 3.3028 |  | $ | 302.77 |  |  | March 15, 2026
2030 Exchangeable Notes |  | 3.4323 |  | $ | 291.35 |  |  | October 15, 2029
_____________________ * Subject to adjustment upon the occurrence of specified events. The Exchangeable Notes are exchangeable under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days during the period of 30 consecutive trading days during the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day; (2) during the five-business day period after any five-consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the exchange rate on each such trading day; (3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as further described under the indentures governing the respective Exchangeable Notes. On or after the respective exchangeable dates noted in the table above, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may exchange all or any portion of their Exchangeable Notes regardless of the foregoing conditions. Upon exchange, the Company, in its sole discretion, has the option to settle the Exchangeable Notes with any of the three following alternatives: (1) shares of the Company's common stock, (2) cash or (3) a combination of cash and shares of the Company's common stock. It is the Company's intention to settle the Exchangeable Notes with cash equal to the face amount of the notes upon exchange; any shares issued would be offset by shares received upon exercise of the Exchangeable Note Hedges (described below). The Company’s 2022 Exchangeable Notes are currently exchangeable; during the three months ended March 31, 2020, no notes were exchanged. The if-converted value of the 2022 Exchangeable Notes exceeded its principal amount of $517.5 million by $92.0 million and $329.6 million based on the Company's stock price on March 31, 2020 and December 31, 2019, respectively. Any dilution arising from the 2022 Exchangeable Notes would be mitigated by the 2022 Exchangeable Notes Hedge. Additionally, each of IAC FinanceCo 2, Inc. and IAC FinanceCo 3, Inc. may redeem for cash all or any portion of its applicable notes, at its option, on or after June 20, 2023 and July 20, 2026, respectively, if the last reported sale price of the common stock underlying the respective notes has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the notice of redemption is provided, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the applicable issuer provides notice of redemption, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Company separately accounts for the debt and equity components of the Exchangeable Notes, and therefore, the Company recorded an original issue discount and corresponding increase to additional paid-in capital, which is the fair value attributed to the exchange feature of each series of debt at issuance. The Company is amortizing the original issue discount and debt issuance costs utilizing the effective interest method over the life of the Exchangeable Notes. The effective interest rates for the 2022, 2026 and 2030 Exchangeable Notes are 4.73%, 5.35% and 6.59%, respectively. The following table sets forth the components of the Exchangeable Notes as of March 31, 2020 and December 31, 2019 (in thousands):
|  | March 31, 2020
|  | 2022 Exchangeable Notes |  | 2026 Exchangeable Notes |  | 2030 Exchangeable Notes
Liability component: |  |  |  |  |  |
Principal |  | $ | 517,500 |  |  | $ | 575,000 |  |  | $ | 575,000 |
Less: unamortized original issue discount |  | 37,314 |  |  | 124,820 |  |  | 178,554 |
Net carrying value of the liability component |  | $ | 480,186 |  |  | $ | 450,180 |  |  | $ | 396,446 |
Equity component |  | $ | 70,363 |  |  | $ | 138,796 |  |  | $ | 189,213 |
|  | December 31, 2019
|  | 2022 Exchangeable Notes |  | 2026 Exchangeable Notes |  | 2030 Exchangeable Notes
Liability component: |  |  |  |  |  |
Principal |  | $ | 517,500 |  |  | $ | 575,000 |  |  | $ | 575,000 |
Less: unamortized original issue discount |  | 40,768 |  |  | 129,037 |  |  | 181,800 |
Net carrying value of the liability component |  | $ | 476,732 |  |  | $ | 445,963 |  |  | $ | 393,200 |
Equity component |  | $ | 70,363 |  |  | $ | 138,796 |  |  | $ | 189,213 |
The following table sets forth interest expense recognized related to the Exchangeable Notes (in thousands):
|  | Three Months Ended March 31, 2020
|  | 2022 Exchangeable Notes |  | 2026 Exchangeable Notes |  | 2030 Exchangeable Notes
Contractual interest expense |  | $ | 1,132 |  |  | $ | 1,258 |  |  | $ | 2,875 |
Amortization of original issue discount |  | 3,454 |  |  | 4,217 |  |  | 3,246 |
Amortization of debt issuance costs |  | 855 |  |  | 319 |  |  | 176 |
Total interest expense recognized |  | $ | 5,441 |  |  | $ | 5,794 |  |  | $ | 6,297 |
|  | Three Months Ended March 31, 2019 |  |  |  |
|  | 2022 Exchangeable Notes |  |  |  |
Contractual interest expense |  | $ | 1,132 |  |  |  |  |
Amortization of original issue discount |  | 3,363 |  |  |  |  |
Amortization of debt issuance costs |  | 871 |  |  |  |  |
Total interest expense recognized |  | $ | 5,366 |  |  |  |  |
Exchangeable Notes Hedge and Warrants In connection with the Exchangeable Notes offerings, the Company purchased call options allowing the Company to purchase initially (subject to adjustment upon the occurrence of specified events) the same number of shares that would be issuable upon the exchange of the applicable Exchangeable Notes at the price per share set forth below (the "Exchangeable Notes Hedge"), and sold warrants allowing the counterparty to purchase (subject to adjustment upon the occurrence of specified events) shares at the per share price set forth below (the "Exchangeable Notes Warrants"). The Exchangeable Notes Hedges are expected to reduce the potential dilutive effect on the Company's common stock upon any exchange of notes and/or offset any cash payment IAC FinanceCo, Inc., IAC FinanceCo 2, Inc. or IAC FinanceCo 3, Inc. is required to make in excess of the principal amount of the exchanged notes. The Exchangeable Notes Warrants have a dilutive effect on the Company's common stock to the extent that the market price per share of the Company common stock exceeds their respective strike prices. The following tables presents details of the Exchangeable Notes Hedges and Warrants (shares in millions):
| Number of Shares* |  | Approximate Equivalent Exchange Price per Share*
2022 Exchangeable Notes Hedge | 3.4 |  |  | $ | 152.18 |
2026 Exchangeable Notes Hedge | 1.9 |  |  | $ | 302.77 |
2030 Exchangeable Notes Hedge | 2.0 |  |  | $ | 291.35 |
| Number of Shares* |  | Strike Price per Share*
2022 Exchangeable Notes Warrants | 3.4 |  |  | $ | 229.70 |
2026 Exchangeable Notes Warrants | 1.9 |  |  | $ | 457.02 |
2030 Exchangeable Notes Warrants | 2.0 |  |  | $ | 457.02 |
_____________________ * Subject to adjustment upon the occurrence of specified events. IAC Credit Facility At March 31, 2020, IAC had a $250 million revolving credit facility (the "IAC Credit Facility"), under which IAC Group, LLC, a subsidiary of the Company, is the borrower ("Borrower"), that expires on November 5, 2023. At March 31, 2020 and December 31, 2019, there were no outstanding borrowings under the IAC Credit Facility. The annual commitment fee on undrawn funds is based on the consolidated net leverage ratio (as defined in the agreement) most recently reported and was 20 basis points at both March 31, 2020 and December 31, 2019. Borrowings under the IAC Credit Facility bear interest, at the Borrower's option, at a base rate or LIBOR, in each case, plus an applicable margin, which is based on the Borrower's consolidated net leverage ratio. The terms of the IAC Credit Facility require that the Borrower maintains a consolidated net leverage ratio of not more than 3.25 to 1.0 before the date on which the Borrower no longer holds majority of the outstanding voting stock of each of ANGI and MTCH ("Trigger Date") and no greater than 2.75 to 1.0 on or after the Trigger Date. The terms of the IAC Credit Facility also restrict the Company's ability to incur additional indebtedness. Borrowings under the IAC Credit Facility are unconditionally guaranteed by certain of the Company's wholly-owned domestic subsidiaries and are also secured by the stock of certain of its domestic and foreign subsidiaries, including the shares of MTCH and ANGI owned by the Borrower. Long-term Debt Maturities Long-term debt maturities as of March 31, 2020 are summarized in the table below:
| (In thousands)
Remainder of 2020 | $ | 10,313 |
2021 | 13,750 |
2022 | 545,000 |
2023 | 192,500 |
2024 | 400,000 |
Thereafter | 2,875,000 |
Total | 4,036,563 |
Less: current portion of long-term debt | 13,750 |
Less: unamortized original issue discount | 347,306 |
Less: unamortized debt issuance costs | 50,499 |
Total long-term debt, net | $ | 3,625,008 |

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