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Debt Obligations
 9 Months Ended
Sep. 30, 2022
DEBT OBLIGATIONS  
DEBT OBLIGATIONS
(9) DEBT OBLIGATIONS

 

Debt obligations consist of the following:

 

  
 
As of

(in thousands)
 
September 30,
2022

 
December 31, 2021

Credit Facility:
 
 
 
 
Revolving credit agreement
 
$
326,300
 
$
283,400









Uncommitted credit agreement


300,000


—
Convertible Debt:
 
 
 
 
0.75% convertible notes, unsecured, due 2049
 
525,000
 
468,235





1.375% Senior Notes, due 2026
 
588,360
 
682,080





Other obligations
 
3,616
 
920









Total debt obligations
 
1,743,276
 
1,434,635
Unamortized debt issuance costs
 
(11,256
 )
 
(13,729
)
Carrying value of debt
 
1,732,020
 
1,420,906
Short-term debt obligations and current maturities of long-term debt obligations 
 
(303,549
 )
 
(821
)
Long-term debt obligations
 
$
1,428,471
 
$
1,420,085

 

Credit Facility


On October 24, 2022, the Company amended its revolving credit agreement (the “Credit Facility”) to increase the facility from $1.0 billion to $1.25 billion and to extend the expiration to October 24, 2027.

The revolving credit facility contains a sublimit of up to $250 million, with $150 million committed, for the issuance of letters of credit and a $75 million sublimit for U.S. dollar swingline loans and a $75 million sublimit for swingline loans in euros or British pounds sterling.  The Credit Facility allows for borrowings in British pounds sterling,  euro and U.S. dollars. Subject to certain conditions, the Company has the option to increase the credit facility by up to an additional $500 million by requesting additional commitments from existing or new lenders. Fees and interest on borrowings vary based upon the Company's corporate credit rating and will be based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over a secured overnight financing rate, as defined in the agreement, with a margin, including the facility fee, ranging from 1.00% to 1.625% or the base rate, as selected by the Company.  The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25% including the facility fee. 

The Agreement contains customary affirmative and negative covenants, events of default and financial covenants, including (all as defined in the Credit Facility): (i) a Consolidated Total Leverage Ratio, depending on certain circumstances defined in the Credit Facility, not to exceed a range between 3.5 to 1.0 and 4.5 to 1.0; and (ii) a Consolidated Interest Coverage Ratio of not less than 3.0 to 1.0. Subject to meeting certain customary covenants (as defined in the Credit Facility), the Company is permitted to repurchase common stock and debt.  The Company was in compliance with all debt covenants as of September 30, 2022.

 

Uncommitted Credit Agreements

 

On May 25, 2022, the Company entered into an Uncommitted Credit Agreement for $300 million, fully drawn and outstanding at September 30, 2022, for the sole purpose of providing vault cash for ATMs, that expires no later than November 30, 2022. Each loan bears interest at the rate per annum equal to the secured overnight financing rate (“SOFR”) plus 1.00%. The weighted-average interest rate from the loan inception date to September 30, 2022 was 2.70%.

 

On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $150 million, for the sole purpose of providing vault cash for ATMs, that expires no later than June 23, 2023. The loan had no balance at September 30, 2022. Each loan was either a Prime rate loan, a Bloomberg Short-term Bank Yield ("BSBY") rate loan or bears interest at the rate agreed to by the bank and the Company at the time such loan is made. The weighted-average interest rate from the loan inception date to September 30, 2022 was 2.76%.

 

Convertible Debt

 

On March 18, 2019, the Company completed the sale of $525.0 million of Convertible Senior Notes ("Convertible Notes"). The Convertible Notes mature in March 2049 unless redeemed or converted prior to such date, and are convertible into shares of Euronet common stock at a conversion price of approximately $188.73 per share if certain conditions are met (relating to the closing price of Euronet common stock exceeding certain thresholds for specified periods). Holders of the Convertible Notes have the option to require the Company to purchase their notes on each of March 15, 2025, March 15, 2029, March 15, 2034, March 15, 2039 and March 15, 2044 at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

 

Prior to the adoption of ASU 2020-06 as of January 1, 2022, in accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt was allocated between debt and equity components so that debt was discounted to reflect our nonconvertible debt borrowing rate. ASC 470-20-35-13 required the debt discount to be amortized over the period the convertible debt was expected to be outstanding as additional non-cash interest expense. The allocation resulted in an increase to additional paid-in capital of $99.7 million for the Convertible Notes. Contractual interest expense for the Convertible Notes was $4.0 million and $9.0 million for the three and nine months ended September 30, 2022, respectively. Accretion expense for the Convertible Notes was $4.0 million and $11.9 million for the three and nine months ended September 30, 2021. See Footnote 2, Recently Issued and Adopted Accounting Pronouncements, for more information regarding this adoption.

 

1.375% Senior Notes due 2026

 

On May 22, 2019, the Company completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that are due in May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of September 30, 2022, the Company has outstanding €600 million ($588.4 million) principal amount of the Senior Notes. In addition, the Company may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.

 

Other obligations

 

Certain of the Company's subsidiaries have available lines of credit and overdraft credit facilities that generally provide for short-term borrowings that are used from time to time for working capital purposes. As of September 30, 2022 and December 31, 2021, borrowings under these arrangements were $3.6 million and $0.9 million, respectively.

 

Debt Issuance Costs

 

As of September 30, 2022, we had unamortized debt issuance costs of $1.5 million for the Credit Facility, $5.3 million for the Convertible Notes and $4.4 million for the Senior Notes that will be amortized through October 2023, March 2025 and May 2026, respectively.