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Long-term Debt | 3 Months Ended
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Mar. 31, 2021
Debt Disclosure [Abstract] |
Long-term debt | Long-term Debt The Company's long-term debt consists of the following (dollars in thousands):
|  | March 31, 2021 |  | December 31, 2020
4.125% Senior Notes due April 2029 |  | $ | 400,000 |  |  | $ | — |
4.875% Senior Notes due October 2025 |  | 300,000 |  |  | 300,000 |
Credit Agreement |  | — |  |  | 50,450 |
Debt issuance costs |  | (9,810) |  |  | (4,160) |
|  | 690,190 |  |  | 346,290 |
Less: Current portion, long-term debt |  | 300,000 |  |  | — |
Long-term debt, net |  | $ | 390,190 |  |  | $ | 346,290 |
Senior Notes due 2029 In March 2021, the Company issued $400.0 million aggregate principal amount of 4.125% senior notes due April 15, 2029 ("2029 Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended. The Company used the proceeds from the 2029 Senior Notes offering to pay fees and expenses of approximately $5.1 million related to the offering and pay fees and expenses of $1.0 million related to amending its existing credit agreement. In connection with the offering, the Company issued a redemption notice for all of its outstanding senior notes due October 2025, and redeemed the entire $300.0 million principal amount subsequent to quarter end (on April 15, 2021). The remaining cash proceeds from the 2029 Senior Notes were used for general corporate purposes, including repaying all outstanding revolving credit facility borrowings. The $5.1 million of fees and expenses related to the 2029 Senior Notes were capitalized as debt issuance costs. The 2029 Senior Notes accrue interest at a rate of 4.125% per annum, payable semi-annually in arrears on April 15 and October 15, commencing on October 15, 2021. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company (each a "Guarantor" and collectively the "Guarantors"). The 2029 Senior Notes are pari passu in right of payment with all existing and future senior indebtedness and effectively subordinated to all existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. Prior to April 15, 2024, the Company may redeem up to 40% of the principal amount of the 2029 Senior Notes at a redemption price of 104.125% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more equity offerings provided that each such redemption occurs within 90 days of the date of closing of each such equity offering. In addition, prior to April 15, 2024, the Company may redeem all or part of the 2029 Senior Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a "make whole" premium. On or after April 15, 2024, the Company may redeem all or part of the 2029 Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, to the redemption date, if redeemed during the twelve-month period beginning on April 15 of the years indicated below:
Year |  | Percentage
2024 |  | 102.063 | %
2025 |  | 101.031 | %
2026 and thereafter |  | 100.000 | %
Senior Notes due 2025 In September 2017, the Company issued $300.0 million aggregate principal amount of 4.875% senior notes due October 15, 2025 ("2025 Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended. The 2025 Senior Notes accrue interest at a rate of 4.875% per annum, payable semi-annually in arrears on April 15 and October 15. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company (each a Guarantor and collectively the Guarantors). The 2025 Senior Notes are pari passu in right of payment with all existing and future senior indebtedness and effectively subordinated to all existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. In connection with the issuance of the 2029 Senior Notes, the Company issued a notice to redeem all of the outstanding 2025 Senior Notes, as permitted under the indenture, at a price of 102.438% of the principal amount. The redemption was completed subsequent to quarter end, on April 15, 2021. See Note 20, "Subsequent Events," for further information on the 2025 Senior Note redemption. Credit Agreement In March 2021, the Company amended its existing credit agreement ("Credit Agreement") in connection with the issuance of the 2029 Senior Notes to extend the maturity date. The Company incurred fees and expenses of approximately $1.0 million related to the amendment, all of which was capitalized as debt issuance costs. The Company also recorded approximately $0.2 million of non-cash expense related to the write-off of previously capitalized deferred financing fees. Below is a summary of key terms under the Credit Agreement as of March 31, 2021, compared to the key terms prior to the amendment (showing gross availability):
Instrument |  | Amount ($ in millions) |  | Maturity Date |  | Interest Rate
Credit Agreement (as amended) |  |  |  |  |  |
Senior secured revolving credit facility |  | $300.0 |  | 3/29/2026 |  | LIBOR(a) plus 1.500%(b)
Credit Agreement (prior to amending) |  |  |  |  |  |
Senior secured revolving credit facility |  | $300.0 |  | 9/20/2022 |  | LIBOR(a) plus 1.500%(b)
__________________________ (a) London Interbank Offered Rate ("LIBOR") (a) The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date. The Credit Agreement also provides incremental revolving credit facility commitments in an amount not to exceed the greater of $200.0 million and an amount such that, after giving effect to such incremental commitments and the incurrence of any other indebtedness substantially simultaneously with the making of such commitments, the senior secured net leverage ratio, as defined, is no greater than 3.00 to 1.00. The terms and conditions of any incremental revolving credit facility commitments must be no more favorable than the existing credit facility. The Company's revolving credit facility allows for the issuance of letters of credit, not to exceed $40.0 million in aggregate. The Company places cash on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit; therefore, as of March 31, 2021 and December 31, 2020, the Company had no letters of credit issued against its revolving credit facility. See Note 6, "Cash and Cash Equivalents," for further information on its cash deposit. At March 31, 2021, the Company had no amounts outstanding under its revolving credit facility and had $300.0 million potentially available after giving effect to letters of credit issued and outstanding. At December 31, 2020, the Company had $50.5 million outstanding under its revolving credit facility and had approximately $249.5 million potentially available. The Company's borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of March 31, 2021 and December 31, 2020. The debt under the Credit Agreement is an obligation of the Company and certain of its domestic subsidiaries and is secured by substantially all of the assets of such parties. Borrowings under the $125.0 million (equivalent) foreign currency sub limit of the $300.0 million senior secured revolving credit facility are secured by a cross-guarantee amongst, and a pledge of the assets of, the foreign subsidiary borrowers that are a party to the agreement. The Credit Agreement also contains various negative and affirmative covenants and other requirements affecting the Company and its subsidiaries, including the ability, subject to certain exceptions and limitations, to incur debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, assets dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The terms of the Credit Agreement also require the Company and its restricted subsidiaries to meet certain restrictive financial covenants and ratios computed quarterly, including a maximum total net leverage ratio (total consolidated indebtedness plus outstanding amounts under the accounts receivable securitization facility, less the aggregate amount of certain unrestricted cash and unrestricted permitted investments, as defined, over consolidated EBITDA, as defined), a maximum senior secured net leverage ratio (total consolidated senior secured indebtedness, less the aggregate amount of certain unrestricted cash and unrestricted permitted investments, as defined, over consolidated EBITDA, as defined) and a minimum interest expense coverage ratio (consolidated EBITDA, as defined, over the sum of consolidated cash interest expense, as defined, and preferred dividends, as defined). At March 31, 2021, the Company was in compliance with its financial covenants contained in the Credit Agreement. Fair Value of Debt The valuations of the Senior Notes and revolving credit facility were determined based on Level 2 inputs under the fair value hierarchy, as defined. The carrying amounts and fair values were as follows (dollars in thousands):
|  | March 31, 2021 |  | December 31, 2020
|  | Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
4.125% Senior Notes due April 2029 |  | $ | 400,000 |  |  | $ | 400,000 |  |  | $ | — |  |  | $ | — |
4.875% Senior Notes due October 2025 |  | 300,000 |  |  | 307,500 |  |  | 300,000 |  |  | 305,630 |
Revolving credit facility |  | — |  |  | — |  |  | 50,450 |  |  | 50,450 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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