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Long-Term Debt | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
LONG-TERM DEBT | LONG-T ERM D EBT Long-term debt at December 31 was as follows:
| 2020 |  | 2019
| (Dollars in thousands)
Bank debt: |  |  |
Bank revolving loans | $ | — |  |  | $ | — |
U.S. term loans | 900,000 |  |  | 760,000 |
Canadian term loans | — |  |  | 4,703 |
Other foreign bank revolving and term loans | 30,407 |  |  | 31,127 |
Total bank debt | 930,407 |  |  | 795,830 |
4¾% Senior Notes | 300,000 |  |  | 300,000 |
3¼% Senior Notes | 795,307 |  |  | 729,755 |
4⅛% Senior Notes | 600,000 |  |  | 400,000 |
2¼% Senior Notes | 611,775 |  |  | — |
Finance leases | 34,480 |  |  | 33,288 |
Total debt - principal | 3,271,969 |  |  | 2,258,873 |
Less unamortized debt issuance costs and debt discount | 20,716 |  |  | 14,452 |
Total debt | 3,251,253 |  |  | 2,244,421 |
Less current portion | 28,036 |  |  | 29,813 |
| $ | 3,223,217 |  |  | $ | 2,214,608 |
A GGREGATE A NNUAL M ATURITIES The aggregate annual maturities of our debt (non-U.S. dollar debt has been translated into U.S. dollars at exchange rates in effect at the balance sheet date), excluding finance leases, are as follows (dollars in thousands):
2021 | $ | 26,116 |
2022 | 743 |
2023 | 654 |
2024 | 400,620 |
2025 | 1,095,927 |
Thereafter | 1,713,429 |
| $ | 3,237,489 |
At December 31, 2020, the current portion of our long-term debt consisted of $26.1 million of other foreign bank revolving and term loans and $1.9 million of finance leases. As discussed in Note 18, on February 10, 2021, we issued $500.0 million aggregate principal amount of our 1.4% Senior Secured Notes due 2026, or the 1.4% Notes, at 99.945 percent of their principal amount and used the gross proceeds from such issuance to prepay $500.0 million of our outstanding term loans under the Credit Agreement. Accordingly, aggregate annual maturities of such prepaid term loans under the Credit Agreement were extended to 2026 for purposes of the table above to match the maturities of the 1.4% Notes. B ANK C REDIT A GREEMENT On March 24, 2017, we completed an amendment and restatement of our previous senior secured credit facility, which extended the maturity dates of our senior secured credit facility, provides additional borrowing capacity for us and provides us with greater flexibility with regard to our strategic initiatives. On May 30, 2018, we entered into an amendment to our amended and restated senior secured credit facility, as so amended, the Credit Agreement. This amendment further extended the maturity dates of the Credit Agreement, lowered the margin on borrowings thereunder and provides us with additional flexibility with regard to our strategic initiatives. The Credit Agreement provides us with revolving loans, or the Revolving Loans, consisting of a multicurrency revolving loan facility of approximately $1.19 billion and a Canadian revolving loan facility of Cdn $15.0 million. The Credit Agreement also provided us with $900.0 million of term loans which were borrowed on June 1, 2020 to fund the purchase price for the acquisition of the Albéa Dispensing Business. See Note 3 for further information. In addition, the Credit Agreement initially had provided us with U.S. $800.0 million and Cdn $45.5 million of term loans, all of which have been repaid. The Revolving Loans generally may be borrowed, repaid and reborrowed from time to time until May 30, 2023. Proceeds from the Revolving Loans may be used for working capital and other general corporate purposes (including acquisitions, capital expenditures, dividends, stock repurchases and repayments of other debt). The outstanding term loans under the Credit Agreement, after giving effect to the prepayment of $500.0 million thereof on February 10, 2021 with the gross proceeds from the issuance of the 1.4% Notes, are repayable in one installment of $400.0 million on May 30, 2024. In February 2020, we repaid all outstanding U.S. term loans ($760.0 million aggregate principal amount) and Canadian term loans (Cdn $6.1 million aggregate principal amount) under the Credit Agreement at that time with proceeds received from our issuances of an additional $200.0 million aggregate principal amount of our 4⅛% Senior Notes due 2028 and €500.0 million aggregate principal amount of our 2¼% Senior Notes due 2028 and with revolving loan borrowings under the Credit Agreement and cash on hand. During 2019, we repaid $40.0 million of U.S. term loans and Cdn $24.0 million of Canadian term loans under the Credit Agreement. The Credit Agreement contains certain mandatory repayment provisions, including requirements to prepay loans with proceeds in excess of certain amounts received from certain assets sales. Generally, mandatory repayments are applied to the term loans and applied first to the next two scheduled amortization payments which are due on December 31 of the year of such mandatory repayment and the next succeeding year (or, if no such payment is due on December 31 of such year, to the payment due on December 31 of the immediately succeeding year or of the next succeeding year in which a payment is to be made) and, to the extent in excess thereof, pro rata to the remaining installments of the term loans. Voluntary prepayments of term loans may be applied to any tranche of term loans at our discretion and are applied to the scheduled amortization payments in direct order of maturity. Amounts repaid under the term loans may not be reborrowed. The Credit Agreement also provides us with an uncommitted multicurrency incremental loan facility for up to U.S. $1.25 billion (which amount may be increased as provided in the Credit Agreement), which may take the form of one or more incremental term loan facilities, increased commitments under the revolving loan facilities and/or incremental indebtedness in the form of secured loans and/or notes, subject to certain limitations. The uncommitted incremental loan facility provides, among other things, that any incremental loan borrowing shall: •be denominated in a single currency, either in U.S. Dollars, Euros, Pounds Sterling or Canadian Dollars; •be in a minimum aggregate amount of at least U.S. $50.0 million; •have a maturity date no earlier than the maturity date for the Term Loans and a weighted average life to maturity of no less than the weighted average life to maturity of the Term Loans; and •be used by us and certain of our foreign subsidiaries for working capital and other general corporate purposes, including to finance acquisitions and refinance any indebtedness assumed as a part of such acquisitions, to refinance or repurchase debt as permitted and to pay outstanding Revolving Loans. At December 31, 2020, we had term loan borrowings outstanding under the Credit Agreement of $900.0 million, and we had no Revolving Loans outstanding under the Credit Agreement. At December 31, 2019, we had term loan borrowings outstanding under the Credit Agreement of $760.0 million of U.S. term loans and Cdn $6.1 million of Canadian term loans, totaling U.S. denominated $764.7 million (with non-U.S. denominated amounts translated at exchange rates in effect at such date), and we had no Revolving Loans outstanding under the Credit Agreement. Under the Credit Agreement, the interest rate for U.S. term loans will be either the Eurodollar Rate or the base rate under the Credit Agreement plus a margin and the interest rate for Canadian term loans will be either the CDOR Rate or the Canadian prime rate under the Credit Agreement plus a margin. Outstanding Revolving Loans incur interest at the same rates as U.S. term loans in the case of U.S. dollar denominated Revolving Loans and as Canadian term loans in the case of Canadian dollar denominated Revolving Loans. Euro and Pounds Sterling denominated Revolving Loans incur interest at the applicable Euro Rate plus the applicable margin. At December 31, 2020, the margin for U.S. term loans and Revolving Loans maintained as Eurodollar Rate, CDOR Rate or Euro Rate loans was 1.50 percent and 1.25 percent, respectively. The interest rate margin on all loans will be reset quarterly based upon our Total Net Leverage Ratio as provided in the Credit Agreement. As of December 31, 2020, the interest rate on U.S. term loans was 1.75 percent. The Credit Agreement provides for the payment of a commitment fee ranging from 0.20 percent to 0.30 percent per annum on the daily average unused portion of commitments available under the revolving loan facilities (0.25 percent at December 31, 2020). The commitment fee will be reset quarterly based upon our Total Net Leverage Ratio as provided in the Credit Agreement. We may utilize up to a maximum of $125.0 million of our multicurrency revolving loan facility under the Credit Agreement for letters of credit as long as the aggregate amount of borrowings of Revolving Loans under the multicurrency revolving loan facility and letters of credit do not exceed the amount of the commitment under such multicurrency revolving loan facility. The Credit Agreement provides for payment to the applicable lenders of a letter of credit fee equal to the applicable margin in effect for Revolving Loans under the multicurrency revolving loan facility, calculated on the stated amount of such letter of credit, and to the issuers of letters of credit of a fronting fee of the greater of (x) $500 per annum and (y) 0.25 percent per annum calculated on the aggregate stated amount of such letters of credit, in each case for their stated duration. For 2020, 2019 and 2018, the weighted average annual interest rate paid on term loans under the Credit Agreement was 2.1 percent, 3.6 percent and 3.6 percent, respectively; and the weighted average annual interest rate paid on revolving loans under the Credit Agreement was 1.9 percent, 3.5 percent and 3.5 percent, respectively. From time to time, we enter into interest rate swap agreements to convert interest rate exposure from variable rates to fixed rates of interest. For 2020, 2019 and 2018, any interest rate swap agreements in effect did not significantly impact our weighted average annual interest rate paid on term loans under our senior secured credit facilities. See Note 10 which includes a discussion of our interest rate swap agreements. The indebtedness under the Credit Agreement is guaranteed by us and our U.S., Canadian and Dutch subsidiaries. The stock of our U.S., Canadian and Dutch subsidiaries has been pledged as security to the lenders under the Credit Agreement. The Credit Agreement contains certain financial and operating covenants which limit, subject to certain exceptions, among other things, our ability to incur additional indebtedness; create liens; consolidate, merge or sell assets; make certain advances, investments or loans; enter into certain transactions with affiliates; and engage in any business other than the packaging business and certain related businesses. In addition, we are required to meet specified financial covenants consisting of Interest Coverage and Total Net Leverage Ratios, each as defined in the Credit Agreement. We are currently in compliance with all covenants under the Credit Agreement. Because we sell metal containers and closures used in the fruit and vegetable packing process, we have seasonal sales. As is common in the packaging industry, we must utilize working capital to build inventory and then carry accounts receivable for some customers beyond the packing season. Due to our seasonal requirements, which generally peak sometime in the summer or early fall, we may incur short-term indebtedness to finance our working capital requirements As a result of the prepayment of all U.S. term loans under the Credit Agreement in February 2020 that were outstanding at that time, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.5 million in 2020 for the write-off of unamortized debt issuance costs. As a result of the 2018 amendment to the Credit Agreement, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.1 million in 2018. 2¼% S ENIOR N OTES On February 26, 2020, we issued €500.0 million aggregate principal amount of our 2¼% Senior Notes due 2028, or the 2¼% Notes, at 100 percent of their principal amount. The 2¼% Notes are general unsecured obligations of Silgan, ranking equal in right of payment with our existing and future unsecured unsubordinated indebtedness, including our 4⅛% Senior Notes due 2028, our 4¾% Senior Notes due 2025 and our 3¼% Senior Notes due 2025, and ahead of our existing and future subordinated debt. In addition, the 2¼% Notes are effectively subordinated to Silgan’s secured debt to the extent of the assets securing such debt and structurally subordinated to all obligations of subsidiaries of Silgan. The 2¼% Notes will mature on June 1, 2028. Interest on the 2¼% Notes is payable semiannually in cash on January 15 and July 15 of each year. The 2¼% Notes were issued pursuant to an indenture by and among Silgan, U.S. Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent, and Elavon Financial Services DAC, as registrar and transfer agent, which indenture contains covenants that are generally less restrictive than those in the Credit Agreement and substantially similar to the covenants in the indenture for our 4⅛% Senior Notes due 2028 and the indenture for our 4¾% Senior Notes due 2025 and our 3¼% Senior Notes due 2025. The 2¼% Notes are redeemable, at our option, in whole or in part, at any time on or after March 1, 2023, initially at 101.125 percent of their principal amount, plus accrued and unpaid interest to the redemption date, declining ratably annually to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date, on or after March 1, 2025. In addition, prior to March 1, 2023, we may redeem up to 35 percent of the aggregate principal amount of the 2¼% Notes with the proceeds of certain equity offerings at a redemption price of 102.25 percent of their principal amount, plus accrued and unpaid interest to the date of redemption. We may also redeem the 2¼% Notes, in whole or in part, prior to March 1, 2023 at a redemption price equal to 100 percent of their principal amount plus a make-whole premium as provided in the indenture for the 2¼% Notes, together with accrued and unpaid interest to the date of redemption. We will be required to make an offer to repurchase the 2¼% Notes at a repurchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest to the date of repurchase, upon the occurrence of a change of control repurchase event as provided in the indenture for the 2¼% Notes. In connection with any tender offer for, or any other offer to purchase, the 2¼% Notes (including a change of control repurchase event offer), if holders of no less than 90 percent of the aggregate principal amount of the then outstanding 2¼% Notes validly tender their 2¼% Notes in such offer, we, or a third party making such offer, are entitled to redeem all remaining 2¼% Notes at the price offered to each holder (excluding any early tender, incentive or similar fee). The net proceeds from the sale of the 2¼% Notes were approximately €494.0 million, after deducting the initial purchasers' discount and offering expenses. We used the net proceeds from the sale of the 2¼% Notes to prepay outstanding term loans under the Credit Agreement. 4⅛% S ENIOR N OTES On November 12, 2019, we issued $400.0 million aggregate principal amount of our 4⅛% Senior Notes due 2028, or the 4⅛% Notes, at 100 percent of their principal amount. On February 26, 2020, we issued an additional $200.0 million aggregate principal amount of the 4⅛% Notes at 99.5 percent of their principal amount, plus accrued and unpaid interest from November 12, 2019. The 4⅛% Notes are general senior unsecured obligations of Silgan, ranking equal in right of payment with our existing and future unsecured unsubordinated indebtedness, including the 2¼% Notes, our 4¾% Senior Notes due 2025 and our 3¼% Senior Notes due 2025, and ahead of our existing and future subordinated debt. In addition, the 4⅛% Notes are effectively subordinated to Silgan's secured debt to the extent of the assets securing such debt and structurally subordinated to all obligations of subsidiaries of Silgan. The 4⅛% Notes will mature on February 1, 2028. Interest on the 4⅛% Notes is payable semiannually in cash on April 1 and October 1 of each year. The 4⅛% Notes were issued pursuant to an indenture by and between Silgan and U.S. Bank National Association, as trustee, which indenture contains covenants that are generally less restrictive than those in the Credit Agreement and substantially similar to those in the indenture for the 2¼% Notes and the indenture for our 4¾% Senior Notes due 2025 and our 3¼% Senior Notes due 2025. The 4⅛% Notes are redeemable, at our option, in whole or in part, at any time on or after October 1, 2022 initially at 102.063 percent of their principal amount, plus accrued and unpaid interest to the redemption date, declining ratably annually to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date, on or after October 1, 2024. In addition, prior to October 1, 2022, we may redeem up to 35 percent of the aggregate principal amount of the 4⅛% Notes with the proceeds of certain equity offerings at a redemption price of 104.125 percent of their principal amount, plus accrued and unpaid interest to the date of redemption. We may also redeem the 4⅛% Notes, in whole or in part, prior to October 1, 2022 at a redemption price equal to 100 percent of their principal amount plus a make-whole premium as provided in the indenture for the 4⅛% Notes, together with accrued and unpaid interest to the date of redemption. We will be required to make an offer to repurchase the 4⅛% Notes at a repurchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest to the date of repurchase, upon the occurrence of a change of control repurchase event as provided in the indenture for the 4⅛% Notes. In connection with any tender offer for, or any other offer to purchase, the 4⅛% Notes (including a change of control repurchase event offer), if holders of no less than 90 percent of the aggregate principal amount of the then outstanding 4⅛% Notes validly tender their 4⅛% Notes in such offer, we, or a third party making such offer, are entitled to redeem all remaining 4⅛% Notes at the price offered to each holder (excluding any early tender, incentive or similar fee). The net proceeds from the sale of the 4⅛% Notes in November 2019 were approximately $394.7 million, after deducting the initial purchasers’ discount and offering expenses. We used the net proceeds from that sale of the 4⅛% Notes to repay outstanding revolving loans under the Credit Agreement, including revolving loans used to redeem our 5½% Senior Notes due 2022. The net proceeds from the sale of the additional 4⅛% Notes in February 2020 were approximately $196.5 million, after deducting the initial purchasers' discount and offering expenses and excluding pre-issuance interest deemed to have accrued to the closing date and paid by purchasers. We used the net proceeds from the sale of the additional 4⅛% Notes to prepay outstanding term loans under the Credit Agreement. 4¾% S ENIOR N OTES AND 3¼% S ENIOR N OTES On February 13, 2017, we issued $300.0 million aggregate principal amount of our 4¾% Senior Notes due 2025, or the 4¾% Notes, and €650.0 million aggregate principal amount of our 3¼% Senior Notes due 2025, or the 3¼% Notes, each at 100 percent of their principal amount. The 4¾% Notes and the 3¼% Notes are general unsecured obligations of Silgan, ranking equal in right of payment with our existing and future unsecured unsubordinated indebtedness, including the 2¼% Notes and the 4⅛% Notes, and ahead of our existing and future subordinated debt. The 4¾% Notes and the 3¼% Notes are effectively subordinated to Silgan’s secured debt to the extent of the assets securing such debt and structurally subordinated to all obligations of subsidiaries of Silgan. The 4¾% Notes and the 3¼% Notes will mature on March 15, 2025. Interest on the 4¾% Notes and the 3¼% Notes is payable semiannually in cash on March 15 and September 15 of each year. The 4¾% Notes and the 3¼% Notes were issued pursuant to an indenture by and among Silgan, U.S. Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent in respect of the 3¼% Notes, and Elavon Financial Services DAC, as registrar and transfer agent in respect of the 3¼% Notes, which indenture contains covenants that are generally less restrictive than those in the Credit Agreement and substantially similar to those in the indenture for the 2¼% Notes and the indenture for the 4⅛% Notes. The 4¾% Notes are redeemable, at our option, in whole or in part, at any time on and after March 15, 2020, initially at 102.375 percent of their principal amount, plus accrued and unpaid interest thereon to the redemption date, declining ratably annually to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date, on or after March 15, 2022. The 3¼% Notes are redeemable, at our option, in whole or in part, at any time on and after March 15, 2020, initially at 101.625 percent of their principal amount, plus accrued and unpaid interest thereon to the redemption date, declining ratably annually to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date, on or after March 15, 2022. Upon the occurrence of a change of control repurchase event as provided in the indenture for the 4¾% Notes and the 3¼% Notes, we are required to make an offer to repurchase the 4¾% Notes and the 3¼% Notes at a repurchase price equal to 101 percent of their principal amount, plus, in each case, accrued and unpaid interest to the date of repurchase. 5½% S ENIOR N OTES On August 1, 2019, we redeemed all $300.0 million aggregate principal amount of our outstanding 5½% Senior Notes due 2022 at a redemption price of 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date. We funded this redemption with revolving loan borrowings under the Credit Agreement and cash on hand. As a result of this redemption, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.7 million in 2019 for the write-off of unamortized debt issuance costs. 5% S ENIOR N OTES On April 16, 2018, we redeemed all of our remaining outstanding 5% Senior Notes due 2020 ($280.0 million aggregate principal amount) at a redemption price of 100 percent of their principal amount, plus accrued and unpaid interest up to the redemption date. We funded this redemption with revolving loan borrowings under the Credit Agreement and cash on hand. As a result of this redemption, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.4 million in 2018 for the write-off of unamortized debt issuance costs.

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