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DEBT
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
DEBT DEBT
The Company’s debt obligations consisted of the following:
  (dollars in millions)
Maturity DateInterest RateDecember 31, 2022December 31, 2021
Term Loans (1)
2026
SOFR plus 2.00%
$1,104.5 $1,113.0 
Senior Notes - $800 million (2)
20283.875%790.8 789.4 
Other— 4.5 
Total debt1,895.3 1,906.9 
Less: current installments of long-term debt11.5 12.7 
Total long-term debt$1,883.8 $1,894.2 
(1) Term loans, net of unamortized discounts and debt issuance costs of $9.5 million and $12.6 million at December 31, 2022 and 2021, respectively. The effective interest rate was 1.6% and 2.1% at December 31, 2022 and 2021, respectively, including the effects of interest
rate swaps and net investment hedges. See Note 12, Financial Instruments, to the Consolidated Financial Statements for further information regarding the Company's interest rate swaps and net investment hedges.
(2) Senior notes, net of unamortized debt issuance costs of $9.2 million and $10.6 million at December 31, 2022 and 2021, respectively. The effective interest rate was 4.1% at both December 31, 2022 and 2021.
Minimum future principal payments on long-term debt were as follows:
  (dollars in millions)
2023$11.5 
202411.5 
202511.5 
20261,079.5 
2027— 
Thereafter800.0 
Total$1,914.0 
Credit Agreement
The Company is a party to the Credit Agreement, which provides for senior secured credit facilities in an initial aggregate principal amount of $1.53 billion, consisting of term loans B of $1.15 billion maturing in 2026 and an amended revolving credit facility of $375 million maturing in 2027.
The amended revolving credit facility, which replaced the Company's prior $330 million revolving facility, was part of an amendment to the Credit Agreement entered into on November 15, 2022. This amendment also provided for amended interest rates and commitment fees applicable to the Company's existing term loans and future borrowings under the revolving facility. In connection with the market transition away from the London Inter-bank Offered Rate (LIBOR), forward-looking rates based on SOFR in lieu of LIBOR were implemented under the Credit Agreement on October 4, 2022.
The Company's outstanding term loans bear interest at a per annum rate based on an adjusted one-month SOFR (as described in the Credit Agreement) plus a spread of 2.00%. The Company is required to pay a commitment fee on any undrawn portion of the revolving credit facility which is not material.
The obligations of the co-borrowers (the Company and its subsidiary, MacDermid, Incorporated) under the Credit Agreement are guaranteed, jointly and severally, by certain of their domestic subsidiaries and secured by a first-priority security interest in substantially all of their assets and the assets of the guarantors, including mortgages on material real property, subject to certain exceptions.
Covenants, Events of Default and Provisions
The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the borrowers or any guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions and dispositions. Subject to certain exceptions, to the extent the borrowers have total outstanding borrowings under the revolving credit facility greater than 30% of the commitment amount under the revolving credit facility, the Company's first lien net leverage ratio should not exceed 5.0 to 1.0, subject to a right to cure.
The Credit Agreement requires the borrowers to make mandatory prepayments of borrowings, subject to certain exceptions, as described in the Credit Agreement. In addition, the Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the Credit Agreement may be accelerated and the lenders could foreclose on their security interests in the assets of the borrowers and the guarantors.
At December 31, 2022, the Company was in compliance with the debt covenants contained in the Credit Agreement and had full availability of its unused borrowing capacity of $369 million, net of letters of credit, under the revolving credit facility.
Senior Notes
3.875% USD Notes due 2028
The indenture governing the 3.875% USD Notes due 2028 provides for, among other things, customary affirmative and negative covenants, events of default and other customary provisions. The notes accrue interest at a rate of 3.875% per annum, payable semi-annually in arrears, on March 1 and September 1 of each year, and will mature on September 1, 2028, unless earlier repurchased or redeemed. Pursuant to the indenture, the Company has the option to redeem the 3.875% USD Notes due 2028 prior to their maturity, subject to, in certain cases, the payment of an applicable make-whole premium, or to repurchase them by any means other than a redemption, including by tender offer, open market purchases or negotiated transactions. The 3.875% USD Notes due 2028 are fully and unconditionally guaranteed on a senior unsecured basis by generally all of the Company’s domestic subsidiaries that guarantee the obligations of the borrowers under the Credit Agreement.
Lines of Credit and Other Debt Facilities
The Company has access to various revolving lines of credit, short-term debt facilities and overdraft facilities worldwide which are used to fund short-term cash needs. At December 31, 2022 and 2021, respectively, there were no amounts outstanding under such facilities. The Company had letters of credit outstanding of $6.0 million and $5.9 million at December 31, 2022 and 2021, respectively, of which $6.0 million and $5.5 million at December 31, 2022 and 2021, respectively, reduced the borrowings available under the various facilities. At December 31, 2022 and 2021, the availability under these facilities totaled approximately $391 million and $354 million, respectively, net of outstanding letters of credit.