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Debt
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Debt

Note 14. Debt

 

The following table sets forth the components of the Company’s debt at March 31, 2024 and December 31, 2023.

 

 

March 31, 2024

 

 

December 31, 2023

 

Senior secured term loans:

 

 

 

 

 

 

Tranche B-3 U.S. dollar term loan due August 2028

 

$

1,065

 

 

$

1,067

 

Tranche B-3 euro term loan due August 2028
(€415 at March 31, 2024 and December 31, 2023)

 

 

450

 

 

 

457

 

Senior unsecured notes:

 

 

 

 

 

 

4.000% due May 2026
(€441 at March 31, 2024 and December 31, 2023)

 

 

478

 

 

 

485

 

5.375% due May 2027

 

 

495

 

 

 

495

 

5.750% due November 2028

 

 

783

 

 

 

783

 

4.625% due November 2029

 

 

620

 

 

 

620

 

Finance lease liabilities

 

 

52

 

 

 

58

 

Financing obligation (1)

 

 

91

 

 

 

92

 

Supplier financing obligation (2)

 

 

17

 

 

 

27

 

Total debt principal

 

 

4,051

 

 

 

4,084

 

Less: Unamortized issue discounts

 

 

(23

)

 

 

(25

)

Less: Unamortized debt issuance costs

 

 

(19

)

 

 

(21

)

Less: Short-term and current maturities of long-term debt

 

 

(41

)

 

 

(51

)

Total long-term debt, net

 

$

3,968

 

 

$

3,987

 
(1)
At March 31, 2024 and December 31, 2023, financing obligation relates to the financed portion of the Company’s research and development facility located in the Science, Technology, and Advanced Research Campus of the University of Delaware in Newark, Delaware (“Chemours Discovery Hub”).
(2)
At March 31, 2024 and December 31, 2023, supplier financing obligation relates to a supplier financing program whose obligations, based on their characteristics, are classified within short-term debt and current maturities of long-term debt. Refer to "Note 12 – Accounts Payable" for further details.

 

Senior Secured Credit Facilities

 

On August 18, 2023, the Company entered into an amendment and restatement credit agreement (the “Credit Agreement”) that provides for a $900 senior secured revolving credit facility (the “Revolving Credit Facility”) and five-year senior secured term loans (the "Senior Secured Term Loan Facility", collectively, the “Senior Secured Credit Facilities”). The Senior Secured Term Loan Facility provides for a Tranche B-3 class of term loans, denominated in U.S. dollars, in an aggregate principal amount of $1,070 (the “Dollar Term Loan”) and a class of Tranche B-3 class term loans, denominated in euros, in an aggregate principal amount of €415 (the “Euro Term Loan”) (collectively, the “Term Loans”). The Dollar Term Loan bears a variable interest rate equal to, at the election of the Company, adjusted Term Secured Overnight Financing Rate ("SOFR") plus 3.50%, subject to an adjusted SOFR floor of 0.50%, or adjusted base rate plus 2.50%, subject to a base rate floor of 0.0%. The Euro Term Loan bears a variable interest rate equal to adjusted Euro Interbank Offered Rate ("EURIBOR") plus 4.00%, subject to an adjusted EURIBOR floor of 0.0%. The Term Loans will mature on August 18, 2028, and are subject to acceleration in certain circumstances. The Credit Agreement is subject to a springing maturity in the event that the senior unsecured notes due in May 2026 are not redeemed, repaid, modified, and/or refinanced within the 91-day period prior to their maturity date.

 

No borrowings were outstanding under the Revolving Credit Facility at March 31, 2024 and December 31, 2023. The Company made term loan repayments of $3 during each of the three months ended March 31, 2024 and 2023. Chemours also had $47 and $48 in letters of credit issued and outstanding under the Revolving Credit Facility at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, the effective interest rates on the Dollar Term Loan and the Euro Term Loan were 8.8% and 7.8%, respectively. Also, at March 31, 2024, commitment fees on the Revolving Credit Facility were assessed at a rate of 0.15% per annum.

 

Accounts Receivable Securitization Facility

 

The Company, through a wholly-owned special purpose entity (“SPE”), maintains an amended and restated receivables purchase agreement dated March 9, 2020, which was amended on March 5, 2021 and further amended on November 24, 2021 and March 23, 2023 (the “Amended Purchase Agreement”). Pursuant to the Amended Purchase Agreement, the Company does not maintain effective control over the transferred receivables, and therefore accounts for these transfers as sales of receivables.

 

Cash received from collections of sold receivables is used to fund additional purchases of receivables at 100% of face value on a revolving basis, not to exceed the facility limit, which is the aggregate purchase limit. During the three months ended March 31, 2024 and 2023, the Company received $285 and $294, respectively, of cash collections on receivables sold under the Amended Purchase Agreement, following which it sold and derecognized $325 and $319, respectively, of incremental accounts receivable. The Company maintains continuing involvement as it acts as the servicer for the sold receivables and guarantees payment to the bank. As collateral against the sold receivables, the SPE maintains a certain level of unsold receivables, which amounted to $105 and $87 at March 31, 2024 and December 31, 2023, respectively. The Company incurred $1 of fees associated with the Securitization Facility during each of the three months ended March 31, 2024 and 2023, respectively. Costs associated with the sales of receivables are reflected in the Company’s consolidated statements of operations for the periods in which the sales occur.

 

Maturities

 

The Company has required quarterly principal payments related to the Dollar Term Loan equivalent to 1.00% per annum through June 2028, with the balance due at maturity. Also, on an annual basis, the Company is required to make additional principal payments depending on leverage levels, as defined in the Credit Agreement, equivalent to up to 50% of excess cash flows based on certain leverage targets with step-downs to 25% and 0% as actual leverage decreases to below a 3.50 to 1.00 leverage target. The Company is not required to make additional principal payments in 2024.

 

The following table sets forth the Company’s debt principal maturities for the next five years and thereafter.

 

 

 

Senior Debt

 

 

Finance Lease Liabilities

 

 

Financing Obligation

 

 

Supplier Financing Obligation

 

 

Total

 

Remainder of 2024

 

$

8

 

 

$

11

 

 

$

5

 

 

$

17

 

 

$

41

 

2025

 

 

11

 

 

 

14

 

 

 

7

 

 

 

—

 

 

 

32

 

2026

 

 

489

 

 

 

11

 

 

 

7

 

 

 

—

 

 

 

507

 

2027

 

 

506

 

 

 

9

 

 

 

7

 

 

 

—

 

 

 

522

 

2028

 

 

2,257

 

 

 

9

 

 

 

7

 

 

 

—

 

 

 

2,273

 

Thereafter

 

 

620

 

 

 

8

 

 

 

129

 

 

 

—

 

 

 

757

 

     Total payments

 

 

3,891

 

 

 

62

 

 

 

162

 

 

 

17

 

 

 

4,132

 

Less: Imputed interest

 

 

—

 

 

 

(10

)

 

 

(71

)

 

 

—

 

 

 

(81

)

Total principal maturities on debt

 

$

3,891

 

 

$

52

 

 

$

91

 

 

$

17

 

 

$

4,051

 

 

 

Debt Fair Value

 

The following table sets forth the estimated fair values of the Company’s senior debt issues, which are based on quotes received from third-party brokers, and are classified as Level 2 financial instruments in the fair value hierarchy.

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

Carrying
Value

 

 

Fair Value

 

 

Carrying
Value

 

 

Fair Value

 

Senior secured term loans:

 

 

 

 

 

 

 

 

 

 

 

 

Tranche B-3 U.S. dollar term loan due August 2028

 

$

1,065

 

 

$

1,063

 

 

$

1,067

 

 

$

1,068

 

Tranche B-3 euro term loan due August 2028
(€415 at March 31, 2024 and December 31, 2023)

 

 

450

 

 

 

446

 

 

 

457

 

 

 

451

 

Senior unsecured notes:

 

 

 

 

 

 

 

 

 

 

 

 

4.000% due May 2026
(€441 at March 31, 2024 and December 31, 2023)

 

 

478

 

 

 

459

 

 

 

485

 

 

 

480

 

5.375% due May 2027

 

 

495

 

 

 

474

 

 

 

495

 

 

 

485

 

5.750% due November 2028

 

 

783

 

 

 

724

 

 

 

783

 

 

 

745

 

4.625% due November 2029

 

 

620

 

 

 

536

 

 

 

620

 

 

 

547

 

Total senior debt principal

 

 

3,891

 

 

$

3,702

 

 

 

3,907

 

 

$

3,776

 

Less: Unamortized issue discounts

 

 

(23

)

 

 

 

 

 

(25

)

 

 

 

Less: Unamortized debt issuance costs

 

 

(19

)

 

 

 

 

 

(21

)

 

 

 

Total senior debt, net

 

$

3,849

 

 

 

 

 

$

3,861