Borrowing Arrangements

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Borrowing Arrangements

6. BORROWING ARRANGEMENTS

In August 2018, the Company entered into a credit agreement with Barclays Bank that provided a Term Loan, a Revolving Credit Facility, and a Letter of Credit Facility (the “Credit Facility”). UCT and certain of its subsidiaries have agreed to secure all of their obligations under the Credit Facility by granting a first priority lien in substantially all of their respective personal property assets (subject to certain exceptions and limitations).

In August 2018, the Company borrowed $350.0 million under the Term Loan and used the proceeds, together with cash on hand, to finance the acquisition of QGT and to refinance its previous credit facilities.   On March 31, 2021, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement to, among other things, (i) refinance and reprice $272.8 million of existing term B borrowings that will remain outstanding and (ii) obtained a $355.0 million senior secured incremental term loan B facility ((i) and (ii) collectively the “Term Loan”) with Barclays Bank, which increased the amount of term loan indebtedness outstanding under the Company’s Credit Facility.

The Term Loan has a maturity date of August 27, 2025, with monthly interest payments in arrears, quarterly principal payments of 0.625% of the outstanding principal balance as of March 31, 2021, with the remaining principal paid upon maturity. Under the Credit Facility, the Company may elect that the Term Loan bear interest at a rate per annum equal to either (a) “ABR” (as defined in the Credit Agreement), plus the applicable margin or (b) the “Eurodollar Rate” (as defined in the Credit Agreement), based on LIBOR, plus the applicable margin. The applicable margin for the Term Loan is equal to a rate per annum to either (i) at any time that the Company’s corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s and BB- (with a stable outlook) or higher from S&P, (x) 3.50% for such Eurodollar term loans and (y) 2.50% for such ABR term loans or (ii) at all other times, (x) 3.75% for such Eurodollar term loans and (y) 2.75% for such ABR term loans. Interest on the Term Loan is payable on (1) in the case of such ABR term loans, the last day of each calendar quarter and (2) in the case of such Eurodollar term loans, the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period. On March 29, 2021, the Company elected that the Term Loan outstanding as of March 31,2021, accrue interest based on the “Eurodollar Rate” for an initial interest period of one month. Pursuant to the Second Amendment to the Credit Agreement, the Credit Facility contains customary LIBOR replacement provisions in the event LIBOR is discontinued.  At December 31, 2021, the Company had an outstanding amount under the Term Loan of $555.1 million, gross of unamortized debt issuance costs of $13.4 million. As of December 31, 2021, interest rate on the outstanding Term Loan was 3.9%.

The Credit Agreement requires the Company to maintain certain financial covenants including a consolidated fixed charge coverage ratio (as defined in the Credit Agreement) as of the last day of any fiscal quarter of at least 1.25 to 1.00, and a consolidated leverage ratio (as defined in the Credit Agreement) as of the last day of any fiscal quarter of no greater than 3.75 to 1.00. The Company was in compliance with all financial covenants during the year ended December 31, 2021.

In 2020, Cinos China amended its existing Credit Agreement and entered into two additional Credit Agreements with a local bank that provide a term loan of $1.9 million with maturity date through September 23, 2022 and interest rates of 4.1%. As of December 31, 2021, Cinos China had $1.4 million outstanding amount of under this credit facility.

Ham-Let has credit facilities and loan agreements with various financial institutions. As of December 31, 2021, Ham-Let had $8.9 million of outstanding debt with interest rate of 1.0%

The Revolving Credit Facility has an initial available commitment of $65.0 million and a maturity date of August 27, 2023. The Company pays a quarterly commitment fee in arrears equal to 0.25% of the average daily available commitment outstanding.  As of December 31, 2021, the Company had no amount outstanding under this revolving credit facility. 

The Letter of Credit Facility has an initial available commitment of $50.0 million and a maturity date of August 27, 2023. The Company pays quarterly in arrears a fee equal to 2.5% (subject to certain adjustments to the Term Loan) of the dollar equivalent of all outstanding letters of credit, and a fronting fee equal to 0.125% of the undrawn and unexpired amount of each letter of credit. As of December 31, 2021, the Company had $2.4 million of outstanding letters of credit with beneficiaries such as landlords of certain facility leases, insurance providers and government agencies making up the majority of the outstanding balance. The remaining available commitments of $47.6 million on the Letter of Credit Facility.

In 2020, Cinos China amended its existing Credit Agreement and entered into two additional Credit Agreements with a local bank that provide Revolving Credit Facilities for a total available commitment of $1.0 million with various maturity dates through September 23, 2022 and interest rates of 2.0%. As of December 31, 2021, Cinos China had an no outstanding amount under these Credit Facilities.

Cinos Korea has Credit Agreements with various banks that provide Revolving Credit Facilities for a total available commitment of 600.0 million Korean Won (approximately $0.5 million) with annual renewals beginning from April 2021 through June 2021 and interest rates of 2.9%.  During the fiscal 2021, borrowings under these Revolving Facilities were insignificant and no amounts were outstanding as of December 31, 2021.

FDS has a credit agreement with a local bank in the Czech Republic that provides for a revolving credit facility in the aggregate of up to 6.0 million euros (approximately $6.8 million). As of December 31, 2021, the Company had no amount outstanding under this revolving credit facility.

As of December 31, 2021, the Company’s total bank debt was $555.1 million, net of unamortized debt issuance costs of $13.4 million.   As of December 31, 2021, the Company had $112.6 million, $6.8 million, $0.5 million and $1.0 million available to draw from its revolving credit facilities in the U.S., Czech Republic, South Korea and China, respectively.

The fair value of the Company’s long-term debt was based on Level 2 inputs, and fair value was determined using quoted prices for similar liabilities in inactive markets. The Company’s carrying value approximates fair value for the Company’s long term-debt.

As of December 31, 2021, the Company’s future debt principal payment obligations for the respective fiscal years were as follows:

	Debt
(In millions)	(Principal only)
2022	$	13.8
2023		16.9
2024		15.7
2025		519.0
Total	$	565.4