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Debt | 12 Months Ended
--- | ---
Dec. 31, 2021
Debt Disclosure [Abstract] |
Debt | Note 16 — Debt Long-term debt is comprised of the following:
As of December 31, |  | 2021 |  |  | 2020 |
6.875% senior secured notes due November 1, 2027 (Face value of $485.0 million less unamortized issuance costs of $6.9 million and $8.1 million at December 31, 2021 and 2020, respectively) |  | $ | 478.1 |  |  | $ | 476.9 |
5.50% convertible senior notes (Face value of $84.2 million less unamortized discount and issuance costs of $0.6 million at December 31, 2020) |  |  | — |  |  |  | 83.6 |
Finance leases |  |  | 2.7 |  |  |  | 5.5 |
Other debt |  |  | 48.6 |  |  |  | 63.9 |
Total |  |  | 529.4 |  |  |  | 629.9 |
Less – current maturities |  |  | 18.2 |  |  |  | 102.8 |
Total long-term debt |  | $ | 511.2 |  |  | $ | 527.1 |
Long-term debt is carried at amortized cost and its estimated fair value is based on market prices classified as Level 2 in the fair value hierarchy. Presented below are the estimated fair values of long-term debt.
As of December 31, |  | 2021 |  |  | 2020 |
6.875% senior secured notes due November 1, 2027 |  | $ | 527.0 |  |  | $ | 532.3 |
5.50% convertible senior notes due March 1, 2021 |  |  | — |  |  |  | 169.8 |
The company’s principal sources of liquidity are cash on hand, cash from operations and its Amended and Restated ABL Credit Facility, discussed below. The company and certain international subsidiaries have access to uncommitted lines of credit from various banks. At December 31, 2021, the company has met all covenants and conditions under its various lending agreements. The company expects to continue to meet these covenants and conditions through at least the next twelve months. Maturities of long-term debt, including finance leases, in each of the next five years and thereafter are as follows:
Year |  | Total |  |  | Long-Term Debt |  |  | Finance Leases |
2022 |  | $ | 18.2 |  |  | $ | 16.6 |  |  | $ | 1.6 |
2023 |  |  | 17.0 |  |  |  | 16.3 |  |  |  | 0.7 |
2024 |  |  | 10.3 |  |  |  | 9.9 |  |  |  | 0.4 |
2025 |  |  | 3.0 |  |  |  | 3.0 |  |  |  | — |
2026 |  |  | 1.9 |  |  |  | 1.9 |  |  |  | — |
Thereafter |  |  | 479.0 |  |  |  | 479.0 |  |  |  | — |
Total |  | $ | 529.4 |  |  | $ | 526.7 |  |  | $ | 2.7 |
Cash paid for interest and capitalized interest expense was as follows:
Year ended December 31, |  | 2021 |  |  | 2020 |  |  | 2019 |
Cash paid for interest |  | $ | 40.1 |  |  | $ | 32.9 |  |  | $ | 61.5 |
Capitalized interest expense |  | $ | 4.5 |  |  | $ | 4.6 |  |  | $ | 6.6 |
Senior Secured Notes due 2027 On October 29, 2020, the company issued $485.0 million aggregate principal amount of its 6.875% Senior Secured Notes due 2027 (the 2027 Notes). The 2027 Notes pay interest semiannually on May 1 and November 1 and will mature on November 1, 2027, unless earlier repurchased or redeemed. The 2027 Notes are fully and unconditionally guaranteed on a senior secured basis by Unisys Holding Corporation, Unisys NPL, Inc., Unisys AP Investment Company I, CompuGain LLC and CompuGain Public Services, LLC, each of which is a U.S. corporation or limited liability company that is directly or indirectly owned by the company (the subsidiary guarantors). The 2027 Notes and the related guarantees rank equally in right of payment with all of the existing and future senior debt of the company and its subsidiary guarantors and senior in right of payment to any future subordinated debt of the company and its subsidiary guarantors. The 2027 Notes and the related guarantees are structurally subordinated to all existing and future liabilities (including preferred stock, trade payables and pension liabilities) of the subsidiaries of the company that are not subsidiary guarantors. The 2027 Notes and the guarantees are secured by liens on substantially all assets of the company and the subsidiary guarantors, other than certain excluded assets (the collateral). The liens securing the 2027 Notes on certain ABL collateral are subordinated to the liens on ABL collateral in favor of the ABL secured parties and, in the future, the liens securing the 2027 Notes may be subordinated to liens on the collateral securing certain permitted first lien debt, subject to certain limitations and permitted liens. Prior to November 1, 2023 the company may, at its option, redeem some or all of the 2027 Notes at any time, at a price equal to 100% of the principal amount of the 2027 Notes redeemed plus a “make-whole” premium, plus accrued and unpaid interest, if any. The company may also redeem, at its option, up to 40% of the 2027 Notes at any time prior to November 1, 2023, using the proceeds of certain equity offerings at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest, if any. On or after November 1, 2023, the company may, on any one or more occasions, redeem all or a part of the 2027 Notes at specified redemption premiums, declining to par for any redemptions on or after November 1, 2025. The indenture contains covenants that limit the ability of the company and its restricted subsidiaries to, among other things: (i) incur additional indebtedness and guarantee indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem its capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make certain prepayments in respect of pension obligations; (v) issue certain preferred stock or similar equity securities; (vi) make loans and investments (including investments by the company and subsidiary guarantors in subsidiaries that are not guarantors); (vii) sell assets; (viii) create or incur liens; (ix) enter into transactions with affiliates; (x) enter into agreements restricting its subsidiaries’ ability to pay dividends; and (xi) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to several important limitations and exceptions. If the company experiences certain kinds of changes of control (as defined in the indenture), it will be required to offer to repurchase the 2027 Notes at 101% of the principal amount of the 2027 Notes, plus accrued and unpaid interest as of the repurchase date, if any. In addition, if the company sells assets under certain circumstances it must apply the proceeds towards an offer to repurchase the 2027 Notes at a price equal to par plus accrued and unpaid interest, if any. The indenture also provides for events of default, which, if any of them occur, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding 2027 Notes to be due and payable immediately. Interest expense related to the 2027 Notes is comprised of the following:
Year ended December 31, |  | 2021 |  |  | 2020 |
Contractual interest coupon |  | $ | 33.3 |  |  | $ | 5.7 |
Amortization of issuance costs |  |  | 1.2 |  |  |  | 0.2 |
Total |  | $ | 34.5 |  |  | $ | 5.9 |
Senior Secured Notes due 2022 On April 15, 2020, the company redeemed all $440.0 million in aggregate principal amount of its outstanding 10.750% Senior Secured Notes due 2022 (the 2022 Notes) for a redemption price equal to 105.375% of the aggregate principal amount of the 2022 Notes redeemed plus accrued but unpaid interest to, but not including, the redemption date. The redemption price paid was $487.3 million and is made up of the following: $440.0 million of principal amount due, $23.65 million of call premium and $23.65 million of accrued interest through April 14, 2020. In 2020, the company recorded a loss on debt extinguishment in other expense, net of $28.5 million consisting of the premium of $23.65 million and write off of $4.8 million of unamortized discount and fees related to the issuance of the 2022 Notes. Interest expense related to the 2022 Notes is comprised of the following:
Year ended December 31, |  | 2020 |  |  | 2019 |
Contractual interest coupon |  | $ | 13.8 |  |  | $ | 47.3 |
Amortization of issuance costs |  |  | 0.7 |  |  |  | 2.4 |
Total |  | $ | 14.5 |  |  | $ | 49.7 |
Convertible Senior Notes Due 2021 In 2016, the company issued $213.5 million aggregate principal amount of Convertible Senior Notes due 2021 (the 2021 Notes). Following the completion of the separate, privately negotiated exchange agreements in 2019, $84.2 million aggregate principal amount of 2021 Notes remained outstanding. On March 3, 2021, the company completed the conversion of $84.2 million aggregate principal amount of the 2021 Notes that remained outstanding for a combination of cash and shares of the company’s common stock. As a result of the conversion of the outstanding 2021 Notes, the company delivered to the holders of such notes (i) aggregate cash payments totaling approximately $86.5 million, which included an aggregate cash payment for outstanding principal of approximately $84.2 million, an aggregate cash payment for accrued interest of approximately $2.3 million and a nominal cash payment in lieu of fractional shares, and (ii) 4,537,123 shares of the company’s common stock in the aggregate. The issuance of the common stock was made in exchange for the 2021 Notes pursuant to an exemption from the registration requirements provided by Section 3(a)(9) of the Securities Act of 1933, as amended. The company also received 1,251,460 shares of its common stock, held in treasury stock, from the settlement of the capped call transactions that the company had entered into with the initial purchasers and/or affiliates of the initial purchasers of the 2021 Notes in connection with the issuance of the 2021 Notes. As a result, the net number of outstanding shares of the company’s common stock following the conversion of the 2021 Notes increased by 3,285,663 shares. Interest expense related to the 2021 Notes is comprised of the following:
Year ended December 31, |  | 2021 |  |  | 2020 |  |  | 2019 |
Contractual interest coupon |  | $ | 0.8 |  |  | $ | 4.6 |  |  | $ | 8.9 |
Amortization of debt discount |  |  | 0.5 |  |  |  | 3.1 |  |  |  | 5.5 |
Amortization of debt issuance costs |  |  | 0.1 |  |  |  | 0.5 |  |  |  | 0.9 |
Total |  | $ | 1.4 |  |  | $ | 8.2 |  |  | $ | 15.3 |
Other Debt In 2019, the company entered into a $27.7 million Installment Payment Agreement (IPA) maturing on December 20, 2023 with a syndicate of financial institutions to finance the acquisition of certain software licenses necessary for the provision of services to a client. Interest accrues at an annual rate of 7.0% and the company is required to make monthly principal and interest payments on each agreement in arrears. At December 31, 2021 and 2020, $5.5 million and $6.5 million, was reported in current maturities of long-term debt, respectively. In 2019, the company entered into a vendor agreement in the amount of $19.3 million to finance the acquisition of certain software licenses used to provide services to our clients and for its own internal use. Interest accrues at an annual rate of 5.47% and the company is required to make annual principal and interest payments in advance with the last payment due on March 1, 2024. At December 31, 2021 and 2020, $3.8 million and $3.6 million was reported in current maturities of long-term debt, respectively. Asset Based Lending (ABL) Credit Facility Contemporaneously with the issuance of the 2027 Notes, the company and the subsidiary guarantors entered into an amendment and restatement of the company’s secured revolving credit facility (the Amended and Restated ABL Credit Facility) that provides for revolving loans and letters of credit up to an aggregate amount of $145.0 million (with a limit on letters of credit of $40.0 million), with an accordion feature provision allowing for the aggregate amount available under the credit facility to be increased up to $175.0 million upon the satisfaction of certain conditions specified in the Amended and Restated ABL Credit Facility. The amendment and restatement extended the maturity from October 2022 to October 29, 2025 and modified certain other terms and covenants. Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables. At December 31, 2021, the company had no borrowings and $5.7 million of letters of credit outstanding, and availability under the facility was $80.4 million net of letters of credit issued. The Amended and Restated ABL Credit Facility is subject to a springing maturity, under which the Amended and Restated ABL Credit Facility will immediately mature 91 days prior to any date on which contributions to pension funds in the United States in an amount in excess of $100.0 million are required to be paid unless the company is able to meet certain conditions, including that the company has the liquidity (as defined in the Amended and Restarted ABL Credit Facility) to cash settle the amount of such pension payments, no default or event of default has occurred under the Amended and Restated ABL Credit Facility, the company’s liquidity is above $130.0 million and the company is in compliance with the then applicable fixed charge coverage ratio on a pro forma basis. The Amended and Restated ABL Credit Facility is guaranteed by the subsidiary guarantors and any future material domestic subsidiaries. The facility is secured by the assets of the company and the subsidiary guarantors, other than certain excluded assets, under a security agreement entered into by the company and the subsidiary guarantors in favor of JPMorgan Chase Bank, N.A., as agent for the lenders under the credit facility. The company is required to maintain a minimum fixed charge coverage ratio if the availability under the Amended and Restated ABL Credit Facility falls below the greater of 10% of the lenders’ commitments under the facility and $14.5 million. The Amended and Restated ABL Credit Facility contains customary representations and warranties, including, but not limited to, that there has been no material adverse change in the company’s business, properties, operations or financial condition. The Amended and Restated ABL Credit Facility includes restrictions on the ability of the company and its subsidiaries to, among other things, incur other debt or liens, dispose of assets and make acquisitions, loans and investments, repurchase its equity, and prepay other debt. These restrictions are subject to several important limitations and exceptions. Events of default include non-payment, failure to comply with covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50.0 million, subject to relevant cure periods, as applicable.

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