Debt

12 Months Ended

Dec. 31, 2019

DEBT

Long-term debt at December 31, 2019 and 2018 consists of the following:



(In thousands)	December 31, 2019		December 31, 2018
Senior secured term loan facility due 2025	396,000		400,000
Senior unsecured notes due 2026	550,000		550,000
	946,000		950,000
Unamortized discount and debt issuance costs	9,516		11,137
Total long-term debt	936,484		938,863
Less current maturities of long-term debt	4,000		4,000
Long-term debt less current maturities	$	932,484	$	934,863

Annual maturities of long-term debt, excluding unamortized discount and issuance costs, due as of December 31, 2019 are as follows:



(In thousands)	2020		2021	2022	2023	2024	Thereafter	Total
Contractual debt obligation maturities*	$	4,000	4,000	4,000	4,000	4,000	926,000	$	946,000

*Subject to Excess Cash Flow payments to the lenders, see discussion below.

In November 2018, the Company entered into the New Term Loan Facility and the New Revolving Facility described below. The Company used the net proceeds of the term loans under the New Term Loan Facility to repay and terminate the Previous Credit Facilities, described below, to pay fees and expenses related to the issuance and the repayment, and for general corporate purposes.

In October 2019, the Company amended its credit and guaranty agreement (the “Credit Agreement”) dated as of November 6, 2018. The amendment changed the agency bank from Goldman Sachs Bank USA, as administrative agent and collateral agent, to Morgan Stanley, and adds two additional lenders to the Company’s Credit Agreement. There was no change to the total commitment or the term length for either the New Term Loan Facility or the New Revolving Facility as defined below under Senior Secured Credit Facilities. However, the amendment changed the amount committed for each of the previous lenders.

Debt issuance costs of $5.1 million for the year ended December 31, 2018 were paid to third parties are capitalized as debt issuance costs in connection with the New Credit Facilities. These debt issuance costs are being amortized as interest expense in the Company’s consolidated statements of operations over the term of the debt instrument using the straight-line method. The term loans under the Previous Term Loan Facility were repaid without premium or penalty at 100% of the outstanding principal amount, plus accrued and unpaid interest.

2026 Senior Unsecured Notes

On November 10, 2017, the Company issued $550 million aggregate principal amount of 4.625% senior unsecured notes due February 10, 2026 (“the 2026 Notes”). The 2026 Notes were issued under an indenture dated as of November 10, 2017 (the “2026 Notes Indenture”) by and among the Company and Wells Fargo Bank, National Association, as trustee. Interest on the 2026 Notes is payable semi-annually in arrears on February 15 and August 15, which commenced on February 15, 2018.

The 2026 Notes are guaranteed, jointly and severally, fully and unconditionally, on a senior unsecured basis, by, subject to certain exclusions, each of the Company’s domestic subsidiaries that guarantee indebtedness under the New Credit Facilities.

As provided in the 2026 Notes Indenture, the Company may at its option on one or more occasions redeem all or a part of the 2026 Notes at a redemption price equal to (a) 100% of the principal amount of the 2026 Notes redeemed plus a make-whole premium if redeemed prior to November 10, 2020, or (b) 100% of the principal amount of the 2026 Notes redeemed plus a percentage of principal amount between 100% and 103.469% of the aggregate principal amount of the 2026 Notes to be redeemed, depending on the period of redemption, if redeemed on or after November 10, 2020, plus, in each case, accrued and unpaid interest on the amount of 2026 Notes being redeemed.

Upon a change in control accompanied by certain rating events, the Company is required to offer to repurchase all of the 2026 Notes at a price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.

The 2026 Notes Indenture contains covenants that, among other things and subject to certain exceptions, limit the Company’s ability and the ability of the Company’s restricted subsidiaries to create liens, enter into sale and leaseback transactions, engage in consolidations or mergers, or sell, transfer or otherwise dispose of all or substantially all of their assets. The 2026 Notes

Indenture also, subject to certain exceptions, limits the ability of any subsidiary of the Company that is not a guarantor under the 2026 Notes to incur indebtedness. The Company is in compliance with all of the above covenants at December 31, 2019.

The 2026 Notes Indenture also provides for events of default which, if certain of them occur, would permit the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding 2026 Notes to declare the principal, premium, if any, interest and any other monetary obligations on all the then-outstanding 2026 Notes to be due and payable immediately.

Senior Secured Credit Facilities

On November 6, 2018, the Company entered into a credit and guaranty agreement (the “Credit Agreement”) with Goldman Sachs Bank USA, subsequently amended in October of 2019 to Morgan Stanley, as administrative agent and collateral agent, and the lenders party thereto, that provides senior secured financing in an aggregate principal amount of $700 million, consisting initially of (a) term loans in an aggregate principal amount of $400 million (the “New Term Loan Facility”) and (b) revolving commitments in an aggregate amount of $300 million (the “New Revolving Facility”, and together with the New Term Loan Facility, the “New Credit Facilities”). Borrowings under the New Credit Facilities bear interest at a rate per annum equal to, at the Company’s option, a base rate (such as prime rate or LIBOR) plus an applicable margin. The Company’s interest rate on the term loans under the New Term Loan Facility is 3.80% at December 31, 2019. In addition to paying interest on the outstanding principal under the New Credit Facilities, the Company will pay (i) with respect to the New Term Loan Facility, customary agency fees, and (ii) with respect to the New Revolving Facility, a commitment fee in respect of the unutilized commitments thereunder and customary letter of credit fees and agency fees. The initial commitment fee is 0.20% per annum.

The Company may voluntarily prepay outstanding term loans and revolving loans under the New Credit Facilities and may reduce the unutilized portion of the New Revolving Facility at any time without premium or penalty other than customary “breakage” costs with respect to LIBOR loans.

It is unclear whether the LIBOR will continue to be calculated or published as a reference rate/benchmark after 2021.The Company’s New Credit Facilities do not have fallback language for when LIBOR is unavailable. The Company is currently assessing its alternatives and cannot yet reasonably estimate the expected impact. The Company believes that it could renegotiate the agreement prior to the discontinuation to determine an alternative rate.

The Credit Agreement requires scheduled quarterly installment payments of 0.25% of the aggregate principal amount of the outstanding term loans commencing March 31, 2019. The Credit Agreement does not require scheduled amortization under the New Revolving Facility.

The Credit Agreement also requires the Company to prepay outstanding term loans, subject to certain exceptions, with (a) up to 50% of the Company’s annual Excess Cash Flow (as defined in the Credit Agreement) and (b) 100% of the net cash proceeds of (i) certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions; and (ii) any incurrence or issuance of certain debt, other than debt permitted under the New Credit Facilities.

The New Term Loan Facility matures November 6, 2025 and the New Revolving Facility matures November 6, 2023. At December 31, 2019, the only outstanding amounts under the New Revolving Facility were undrawn outstanding letters of credit of $0.2 million.

All obligations under the New Credit Facilities are unconditionally guaranteed by certain of the Company’s wholly-owned domestic subsidiaries and are secured, subject to certain exceptions, by substantially all of the Company’s assets and the assets of the Company’s subsidiaries that have guaranteed the New Credit Facilities.

The New Credit Facilities contain a number of negative covenants that, subject to certain exceptions, restrict the Company’s ability and each of the Company’s subsidiaries’ ability to incur additional indebtedness; pay dividends on its capital stock or redeem, repurchase or retire its capital stock or its other indebtedness; make investments, loans and acquisitions, create restrictions on the payment of dividends or other amounts to the Company from the Company’s restricted subsidiaries; engage in transactions with its affiliates; sell assets, including capital stock of its subsidiaries; materially alter the business it conducts; consolidate or merge; incur liens; and engage in sale-leaseback transactions. If at any time, commencing with the fiscal quarter ending March 31, 2019, the Company has revolving borrowings, unreimbursed letter of credit drawings and undrawn letters of credit outstanding in an amount in excess of 35.0% of the commitment amount under the New Revolving Facility, the Credit Agreement requires the Company to maintain a secured net leverage ratio of at least 3.25 to 1.0. The Company is in compliance with all of the above covenants at December 31, 2019.

Previous Senior Secured Loan Facilities

On April 30, 2014, the Company entered into (a) a term loan credit and guaranty agreement with Goldman Sachs Bank USA, as administrative agent, collateral agent, sole lead arranger, sole bookrunner and sole syndication agent, that provided senior secured financing of $460.0 million (the “Previous Term Loan Facility”) and (b) an asset-based revolving credit and guaranty

agreement with Goldman Sachs Bank USA, as administrative agent, collateral agent, sole lead arranger, sole bookrunner and sole syndication agent, that provided senior secured financing of $75.0 million, subject to a borrowing base (the “Previous ABL Loan Facility”). As stated above, the Previous Term Loan Facility and the Previous ABL Loan Facility were repaid in full in November 2018. The repayment of the Previous Term Loan Facility and the Previous ABL Loan Facility resulted in a loss of $2.3 million for the year ended December 31, 2018 on extinguishment of debt, which is included in other expense (income), net in the Company’s consolidated statement of operations.