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Debt | 12 Months Ended
--- | ---
Jun. 30, 2020
Debt Disclosure [Abstract] |
Debt | Debt
| June 30, 2020 |  | June 30, 2019
7.0% Senior unsecured notes due 2026 | $ | 600,000 |  |  | $ | 400,000 |
Senior secured credit facility | 570,483 |  |  | 621,224 |
12.0% Second lien notes due 2025 | 300,000 |  |  | — |
Other | 11,694 |  |  | 14,361 |
Debt issuance costs and debt premiums (discounts) (1) | (48,587 | ) |  | (12,018 | )
Total debt outstanding, net | 1,433,590 |  |  | 1,023,567 |
Less: short-term debt (2) | 17,933 |  |  | 81,277 |
Long-term debt | $ | 1,415,657 |  |  | $ | 942,290 |
_____________________ (1) The debt premium (discount) balance as of June 30, 2020 includes $22,432 of a discount due to the fair value allocation of warrants in conjunction with the issuance of the second lien notes in May 2020. Refer below for further detail of the transaction. (2) Balances as of June 30, 2020 and June 30, 2019 are inclusive of short-term debt issuance costs, debt premiums and discounts of $10,362 and $2,419, respectively. Our Debt Our various debt arrangements described below contain customary representations, warranties and events of default. As of June 30, 2020, the pre-existing financial maintenance covenants under our senior secured credit facility covenants are suspended, and we were in compliance with all financial and other covenants under the credit agreement as amended, senior unsecured notes indenture, and second lien indenture. Senior Secured Credit Facility On April 28, 2020, we entered into an amendment to our senior secured credit agreement to suspend pre-existing maintenance covenants, including the total and senior secured leverage covenants and interest coverage ratio covenant, until the publication of our results for the quarter ending December 31, 2021, for which quarter the pre-amendment maintenance covenants will be reinstated. The covenant suspension period could end earlier at our election if we have total leverage equal to or lower than 4.75x annualized EBITDA for each of two consecutive quarters and are compliant with pre-amendment maintenance covenants. During the suspension period, we are required to comply with new maintenance covenants requiring minimum liquidity (defined in the credit agreement as unrestricted cash plus unused revolver) of $50,000 and EBITDA above zero in each of the quarters ending June 30, 2021 and September 30, 2021. The amendment increased pricing to LIBOR plus 3.25% during the covenant suspension period and to LIBOR plus 2.50% to 3.25% after the covenant suspension period, depending on our total leverage ratio, including a 0.75% floor for LIBOR borrowings. Additionally, as part of the amendment, the maturity date was changed from February 2025 to November 2024. The amendment to the senior secured credit agreement also reduced the credit facility from $1,551,419 to $1,000,000, made up of an $850,000 revolver and $150,000 term loan. During the covenant suspension period, we have more restrictive limitations on certain activities and actions, including but not limited to:
• | the incurrence of additional indebtedness and liens,
• | the consummation of certain investments, including acquisitions,
• | the making of restricted payments, including the purchases of our ordinary shares and payment of dividends.
As of June 30, 2020, we have drawn commitments under the credit facility of $570,483 as follows:
• | Revolving loans of $422,358 with a maturity date of November 15, 2024
• | Term loans of $148,125 amortizing over the loan period, with a final maturity date of November 15, 2024
As of June 30, 2020, the weighted-average interest rate on outstanding borrowings was 5.4%, inclusive of interest rate swap rates. We are also required to pay a commitment fee on unused balances of 0.35% to 0.5% depending on our total leverage ratio, and 0.5% during the covenant suspension period . We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our outstanding debt as of June 30, 2020. Indenture and Second Lien Notes On May 1, 2020, we issued second lien notes and warrants to raise $300,000 from funds managed by affiliates of Apollo Global Management, Inc. (the "Apollo Funds") via a private placement. These notes and warrants were issued at a discount of $6,000, resulting in net proceeds of $294,000. We used the proceeds to pay down a portion of the term loans under our senior secured credit facility and to pay fees and expenses incurred in connection with the financing and the above-described amendment. The investment by the Apollo Funds is structured as 5-year second lien notes with a 12% coupon, of which up to 50% can be paid-in-kind at our option. We may prepay these notes in whole or in part after the first anniversary with a 3% premium, after the second anniversary with a 1% premium, and after the third anniversary with no premium with proceeds from certain debt financings. The Apollo Funds also received 7-year warrants to purchase 1,055,377 ordinary shares of Cimpress, representing approximately 3.875% of our outstanding diluted ordinary shares. Based on the terms of the agreement, the two instruments exist separately and should be treated as separate securities; therefore the warrants are considered to be detachable. The warrants have an exercise price of $60 per share, representing an approximately 17% premium to the 10-day volume weighted average price of our shares as of April 28, 2020. The warrants are classified as equity as they are strictly redeemable in our own shares, and they may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised. The warrants are accounted for in accordance with ASC No. 470-20, Debt with Conversion and Other Options, which requires us to bifurcate and separately account for the detachable warrant as a separated instrument. The values were assigned to detachable warrants based on a relative fair allocation between the second lien notes and the warrants. The fair value used for the warrants in this allocation was calculated using the Monte Carlo valuation model. The inputs to the fair value analysis are considered Level 3 inputs, and consist of estimates of the expected volatility over the contract term of the warrants, taking into consideration the historical stock volatility, as well as industry and market conditions. Based upon the terms of the note and warrant agreement, the warrants were determined to be equity-based instruments. The valuation of the notes and warrants resulted in a carrying value allocated to the warrants of $22,432, which, in addition to be being accounted for as an equity instrument recorded in additional paid in capital, will also be included as a discount to the second lien notes, in addition to the $6,000 discount at which they were issued. The full discount will be amortized over the life of the notes. Indenture and Senior Unsecured Notes On February 13, 2020, we completed an additional offering of $200,000 in aggregate principal of 7.0% notes under the senior notes indenture between Cimpress plc and U.S. Bank National Association (as successor trustee to MUFG Union Bank, N.A.) at a premium of 105.25%. These notes were issued in addition to the existing principal balance under the indenture of $400,000, and are collectively referred to as the 2026 Notes. All terms and covenants of the senior notes indenture remain unchanged. The net proceeds from this add-on offering were used to repay a portion of the indebtedness outstanding under our senior secured credit facility and related transaction fees and expenses. The 2026 Notes bear interest at a rate of 7.0% per annum and mature on June 15, 2026. Interest on the Notes is payable semi-annually on June 15 and December 15 of each year to the holders of record of the 2026 Notes at the close of business on June 1 and December 1, respectively, preceding such interest payment date. The 2026 Notes are senior unsecured obligations and rank equally in right of payment to all our existing and future senior unsecured debt and senior in right of payment to all of our existing and future subordinated debt. The Notes are effectively subordinated to any of our existing and future secured debt to the extent of the value of the assets securing such debt. Subject to certain exceptions, each of our existing and future subsidiaries that is a borrower under or guarantees our senior secured credit facilities also guarantees the 2026 Notes. We have the right to redeem, at any time prior to June 15, 2021, some or all of the 2026 Notes at a redemption price equal to 100% of the principal amount redeemed, plus a make-whole amount as set forth in the indenture, plus accrued and unpaid interest to, but not including, the redemption date. In addition, we have the right to redeem, at any time prior to June 15, 2021, up to 40% of the aggregate outstanding principal amount of the 2026 Notes at a redemption price equal to 107% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date, with the net proceeds of certain equity offerings by Cimpress. At any time on or after June 15, 2021, we may redeem some or all of the Notes at the redemption prices specified in the indenture, plus accrued and unpaid interest to, but not including, the redemption date. Other Debt Other debt consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of June 30, 2020 and June 30, 2019, we had $11,694 and $14,361, respectively, outstanding for those obligations that are payable through March 2025. Debt Issuance Costs During the years ended June 30, 2020 and 2019, we capitalized debt issuance costs related to the refinancing of our senior secured credit facility, and issuance of additional senior unsecured notes, and issuance of the second lien notes of $23,208 and $1,800, respectively. Amortization expense and the write-off of costs related to debt amendments and modifications are included in interest expense, net in the consolidated statements of operations. For the years ended June 30, 2020, 2019 and 2018, we amortized $3,240, $2,367 and $1,821, respectively. As part of the April 2020 amendment to our senior secured credit facility, we also expensed $568 of third-party fees associated with the modification of the term loans and wrote-off $1,438 of unamortized fees associated with the revolving loans, due to the reduction in loan commitments. During the year ended June 30, 2018, we expensed $2,921 of unamortized costs related to the extinguishment of our senior unsecured notes, which was presented separately in the consolidated statements of operations as part of loss on early extinguishment of debt. Unamortized debt issuance costs and debt premiums (discounts) were $48,587 and $12,018 as of June 30, 2020 and 2019, respectively.

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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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