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External Debt and Financing Arrangements
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
External Debt and Financing Arrangements

6. External Debt and Financing Arrangements

Unsecured Senior Notes

 

In March 2022, the Company issued $900 million in aggregate principal amount of senior unsecured notes in a registered public offering consisting of $450 million of 4.00% senior unsecured notes maturing in 2032 and $450 million of 4.50% senior unsecured notes maturing in 2052 (together, the “2022 Notes”). The Company used the net proceeds from the 2022 Notes offering to pay down a portion of the outstanding balance on the 2021 Term Loan, as described below.

At March 31, 2022, the Company had aggregate principal outstanding notes in the amount of $2.7 billion, with varying maturities (the “Notes”). The Notes are unsecured senior obligations of the Company. The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts, and debt issuance costs as of March 31, 2022 and December 31, 2021:

 

 

 

 

 

 

 

 

 

Net Carrying Value

 

 (in millions)

Principal Amount

 

 

Issuance Date

 

Maturity Date

 

March 31, 2022

 

 

December 31, 2021

 

4.000% Senior Notes

$

500.0

 

 

June 2015

 

June 2025

 

$

497.5

 

 

$

497.4

 

4.000% Senior Notes

 

600.0

 

 

September 2018

 

September 2023

 

 

598.4

 

 

 

598.2

 

3.250% Senior Notes

 

700.0

 

 

September 2019

 

September 2029

 

 

694.4

 

 

 

694.2

 

4.000% Senior Notes

 

450.0

 

 

March 2022

 

March 2032

 

 

445.3

 

 

 

—

 

4.500% Senior Notes

 

450.0

 

 

March 2022

 

March 2052

 

 

435.0

 

 

 

—

 

Total Senior Notes

$

2,700.0

 

 

 

 

 

 

$

2,670.6

 

 

$

1,789.8

 

 

 

Credit Facilities

 

In November 2021, the Company entered into a 364-day, $400 million term loan credit agreement (“2021 Term Loan”), for general corporate purposes, to mature in November 2022. On March 1, 2022, the Company entered into a First Amendment and Incremental Agreement to the 2021 Term Loan (the “First Amendment”). The First Amendment provided for an increase in the principal amount from $400 million to $600 million as well as the transition from LIBOR to SOFR interest rates. As a result, interest rates under the 2021 Term Loan were variable based on SOFR at the time of the borrowing and the Company’s long-term credit rating and could range from SOFR + 0.725% to SOFR + 1.350%. On March 18, 2022, the Company entered into a Second Amendment and Incremental Agreement to the 2021 Term Loan (the “Second Amendment”), increasing the principal amount from $600 million to $1.1 billion. All other terms and conditions remained the same under the First Amendment and Second Amendment. Proceeds from the increased 2021 Term Loan were used to repay outstanding balances under the 2019 Revolving Credit Agreement (as described below). The outstanding $1.1 billion under the 2021 Term Loan was repaid on March 25, 2022 with proceeds from the notes offering in March 2022 (as described above) and other existing sources of liquidity.

In September 2019, the Company entered into a second amended and restated $1.25 billion revolving credit facility (the “2019 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. The maturity date of the facility is September 2024. Interest rates under the 2019 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.91% to LIBOR + 1.4%. Under the 2019 Revolving Credit Agreement, the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. In addition, the Company's ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. On March 31, 2022 and December 31, 2021, our outstanding borrowings under this facility were $150.0 million and $520.0 million, respectively. This facility is included in Long-term debt in the condensed consolidated balance sheets. As of March 31, 2022, we were in compliance with all covenants under this facility.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $17.5 million in aggregate, of which there were no outstanding balances as of March 31, 2022 and December 31, 2021.

 

Commercial Paper

In November 2021, the Company established a commercial paper program (the “Commercial Paper Program”) pursuant to which the Company may issue unsecured commercial paper notes. The Company’s 2019 Revolving Credit Agreement is the liquidity backstop for the repayment of any notes issued under the Commercial Paper Program, and as such, borrowings under the Commercial Paper Program are included in Long-term debt in the condensed consolidated balance sheets. Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the 2019 Revolving Credit Agreement, not to exceed $1.25 billion. The Company plans to use net proceeds from any issuances under the Commercial Paper Program for general corporate purposes. On March 31, 2022 and December 31, 2021 our outstanding borrowings under the Commercial Paper Program were $547.3 million and zero, respectively.