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LONG TERM DEBT & AVAILABLE FACILITIES
 6 Months Ended
Jun. 30, 2024
LONG TERM DEBT & AVAILABLE FACILITIES  
LONG TERM DEBT & AVAILABLE FACILITIES

NOTE 11—LONG TERM DEBT & AVAILABLE FACILITIES

Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s debt structure discussed below. The Company was in compliance with all debt related covenants as of June 30, 2024 and December 31, 2023.

As of June 30, 2024 and December 31, 2023, debt consisted of the following:

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June 30, 2024

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December 31, 2023

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Interest Rate as of
June 30, 2024

   

Maturity Date

   

Carrying Amount

   

Unamortized Deferred Financing Fees (1)

    

Total Debt, Less Unamortized Deferred Financing Fees

   

Carrying Amount

   

Unamortized Deferred Financing Fees (1)

   

Total Debt, Less
Unamortized Deferred
Financing Fees

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2029 Senior Notes

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5.125%

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April 2029

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$

447.0

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$

(10.2)

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$

436.8

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$

447.0

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$

(11.1)

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$

435.9

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2025 Senior Notes (2)

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5.375%

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September 2025

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115.0

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(0.4)

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114.6

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115.0

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(0.6)

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114.4

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Senior Credit Facility

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2028 Term Loan B

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8.109%

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May 2028

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725.4

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(10.5)

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714.9

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728.9

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(11.8)

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717.1

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2026 Revolving Facility (3)

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Various

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May 2026

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—

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—

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—

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—

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—

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—

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2028 Refinance Term Loans (2)

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13.806%

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May 2028

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1,043.8

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(20.2)

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1,023.6

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1,046.5

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(22.6)

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1,023.9

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Accounts Receivable Securitization Facility (4)

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Various

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November 2025

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—

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—

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—

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—

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—

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—

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Other indebtedness

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Various

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Various

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8.7

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—

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8.7

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7.2

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—

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7.2

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Total debt

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$

2,339.9

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$

(41.3)

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$

2,298.6

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$

2,344.6

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$

(46.1)

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$

2,298.5

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Less: current portion(5)

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(22.8)

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(20.9)

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Total long-term debt, net of unamortized deferred financing fees

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$

2,275.8

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$

2,277.6

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(1)This caption does not include deferred financing fees related to the Company’s revolving facilities, which are included within “Deferred charges and other assets” on the condensed consolidated balance sheets.
(2)The 2025 Senior Notes were partially repaid on September 8, 2023 using the proceeds of the 2028 Refinance Term Loans.
(3)As of June 30, 2024, under the 2026 Revolving Facility, the Company had a capacity of $375.0 million and $29.0 million outstanding letters of credit. As of June 30, 2024, the Company had funds available for borrowing of $93.5 million (net of the applicable $19.0 million outstanding letters of credit as defined in the secured credit agreement), which reflects the borrowing limit imposed by the springing covenant. The springing covenant applies when 30% or more of the 2026 Revolving Facility’s capacity is drawn which then requires the Company to meet a first lien net leverage ratio (as defined in the secured credit agreement) not to exceed 3.50x at the end of each financial quarter. As of June 30, 2024, the first lien net leverage ratio was 7.96x and the outstanding borrowings did not exceed the 30% threshold. Additionally, the Company is required to pay a quarterly commitment fee in respect of any unused commitments under this facility equal to 0.375% per annum.
(4)As of June 30, 2024, this facility had a borrowing capacity of $150.0 million, and the Company had approximately $150.0 million of accounts receivable available to support this facility, based on the pool of eligible accounts receivable.
(5)The current portion of long-term debt was primarily related to $18.3 million of the scheduled future principal payments on both the 2028 Term Loan B and the 2028 Refinance Term Loans as of June 30, 2024 and December 31, 2023.

The 2028 Refinance Credit Agreement requires the Company to comply with customary affirmative, negative and financial covenants, and contains events of default including (i) relating to a change of control or (ii) failure to maintain at least $100.0 million of Liquidity at the end of any calendar month, and (iii) a cross default to the Credit Agreement. If an event of default occurs, the Term Lenders will be entitled to take various actions, including the acceleration of amounts due under the 2028 Refinance Term Loans. Liquidity is defined under the 2028 Refinance Credit Agreement as a combination of cash and cash equivalents held at certain of the Company’s restricted subsidiaries as well as the funds available for borrowing under both the 2026 Revolving Facility and the Accounts Receivable Securitization Facility, subject to certain restrictions outlined in the 2028 Refinance Credit Agreement.

As of June 30, 2024, the Company was in compliance with all debt covenant requirements under the 2028 Refinance Credit Agreement and the Credit Agreement. The Company had Liquidity of $346.3 million, comprised of $102.9 million of cash and cash equivalents and approximately $243.5 million of funds available for borrowing under

both the 2026 Revolving Facility and the Accounts Receivable Securitization Facility, $93.5 million and $150.0 million respectively.

We believe funds provided by operations, our cash and cash equivalent balances, coupled with borrowings available under our 2026 Revolving Facility and our Accounts Receivable Securitization Facility, will be adequate to meet necessary operating and capital expenditures for at least the next twelve months in the current operating environment.

The Company’s ability to repay the 2025 Senior Notes, which mature in September 2025 is also dependent on several factors, including the company’s ability to achieve its forecast cash flows and its ability to maintain minimum liquidity requirements under its related covenants. If the Company is unable to achieve its forecasts, maintain minimum liquidity covenants, or refinance, it could have a material adverse impact on our access to liquidity, results of operation and financial condition.

Accounts Receivable Securitization Facilities

The Company has maintained an accounts receivable securitization facility (the “2010 A/R Facility”) since 2010 for the securitization of trade receivables originated by certain of the Company’s Swiss, German, Dutch and U.S. subsidiaries (the “Sellers”). The 2010 A/R Facility is funded through the sale of commercial paper by a special purpose finance entity, the proceeds of which fund the purchase of trade receivables from the Sellers. Collection accounts related to the trade receivables are pledged to the special purpose entity, which holds a first priority perfected security interest in such accounts and, as a result, will not be available to the creditors of the Company or its other subsidiaries. The obligations of the Trinseo subsidiaries are also guaranteed by the Company’s subsidiary Trinseo Holding S.à r.l.

On March 28, 2024, the Company amended the 2010 A/R Facility to extend its maturity date to November 2025, as well as other amendments. On July 18, 2024, the Company terminated the 2010 A/R Facility and paid the outstanding facility amount in full. As a result of this termination, the Company will recognize a $0.6 million non-cash loss on extinguishment of debt in the third quarter of 2024, comprised entirely of the write-off of unamortized deferred financing costs.

On July 18, 2024, the Company entered into a new revolving credit facility (the “2024 A/R Facility”) for the securitization of trade receivables originated by the Sellers. The 2024 A/R Facility is funded by a special purpose finance entity, which purchases the trade receivables from the Sellers. The 2024 A/R Facility also has a borrowing limit of $150.0 million and matures in January 2028, with an optional one-year extension. Borrowings under the 2024 A/R Facility bear interest at a rate per annum equal to Adjusted Term SOFR or EURIBOR (each as defined in the 2024 A/R Facility credit agreement, subject to a 1.00% floor), depending on the borrowing currency, plus a margin of 4.75% and the Company incurs interest on a minimum of $75.0 million of advances, irrespective of actual amounts outstanding. The 2024 A/R Facility contains standard representations, warranties and covenants, as well as standard events of default, including those relating to cross-default to the Company’s other material indebtedness. The Company may terminate the 2024 A/R Facility at any time, subject to a 1.00% call premium prior to January 2027.

Certain fees incurred in connection with issuance of the Receivables Facility are capitalized and recorded within “Deferred charges and other assets” on the consolidated balance sheet will be amortized over the remaining term of the facility using the straight-line method.