Debt And Interest Expense

12 Months Ended

Dec. 31, 2020

Debt and Interest Expense

Senior Notes

As of December 31, 2020, the Company had senior notes outstanding of $1.79 billion, net of unamortized issuance costs. All of the outstanding senior notes were issued at par and are senior unsecured obligations of the Company. Interest is payable on each of the senior notes semi-annually. Each of the senior notes issuances is redeemable, in whole or in part, at the Company’s option at times and redemption prices specified in the indentures.

The following table summarizes information related to our Senior notes:


	Issuance Date	Maturity Date	Interest Rate		Principal
					As of December 31,
					2020		2019
					(in thousands except interest rates)
Senior notes due 2023	April 16, 2013	May 1, 2023	4.625	%	$	750,000	$	750,000
Senior notes due 2025	March 27, 2015	April 1, 2025	5.250	%	500,000		500,000
Senior notes due 2027	July 5, 2017	July 15, 2027	4.750	%	550,000		550,000
Unamortized issuance costs					(9,917)		(12,435)
Total senior notes					$	1,790,083	$	1,787,565

The indenture governing the 2023 Senior Notes contains covenants that limit the ability of the Company and/or its restricted subsidiaries, under certain circumstances, to, among other things: (i) pay dividends or make distributions on, or redeem or repurchase, its capital stock; (ii) make certain investments; (iii) create liens on assets; (iv) enter into sale/leaseback transactions and (v) merge or consolidate or sell all or substantially all of its assets. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, may permit or, in certain circumstances, require the principal, premium, if any, accrued and unpaid interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. The Company has remained in compliance with these covenants and no events of default have occurred over the term of the Notes.

2019 Credit Facility

On December 12, 2019, the Company entered into a credit agreement for a $200.0 million committed unsecured revolving credit facility (the “2019 Credit Facility”). The 2019 Credit Facility includes a financial covenant requiring that the Company’s leverage ratio not exceed 4.0 to 1.0. As of December 31, 2020, there were no borrowings outstanding under the facility and the Company was in compliance with the financial covenants. The 2019 Credit Facility expires on December 12, 2024 at which time any outstanding borrowings are due. Verisign may from time to time request lenders to agree on a discretionary basis to increase the commitment amount by up to an aggregate of $150.0 million.

Subordinated Convertible Debentures

In 2018 the Company settled all of its outstanding subordinated convertible debentures, paying the $1.25 billion principal value in cash, and issuing 26.1 million shares of common stock for the excess of the conversion value over the principal amount. The Company recognized a loss of $6.6 million upon extinguishment of the subordinated convertible debentures based on the amount of the total consideration allocated to the liability component of the debentures.

The following table presents the components of the Company’s interest expense:


	Year Ended December 31,
	2020		2019		2018
	(In thousands)
Contractual interest on Senior Notes	$	87,063	$	87,063	$	87,063
Contractual interest on subordinated convertible debentures	—		—		20,015
Amortization of debt discount on the subordinated convertible debentures	—		—		4,236
Amortization of debt issuance costs and other interest expense	3,081		3,548		3,531
Total interest expense	$	90,144	$	90,611	$	114,845