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DEBT
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
DEBT
12. DEBT
The following table provides detail on our debt balances, net of unamortized debt discount and issuance costs.
($ in millions)At March 31, 2024At December 31, 2023
Corporate Credit Facility
Term Loan$784 $784 
Unamortized debt discount and issuance costs(3)(3)
781 781 
Revolving Corporate Credit Facility(1)
160 105 
Unamortized debt issuance costs
(3)(4)
157 101 
Senior Unsecured Notes
2028 Notes350 350 
Unamortized debt discount and issuance costs(2)(2)
348 348 
2029 Notes500 500 
Unamortized debt discount and issuance costs(5)(5)
495 495 
Convertible Notes
2026 Convertible Notes575 575 
Unamortized debt issuance costs(6)(7)
569 568 
2027 Convertible Notes575 575 
Unamortized debt issuance costs(11)(12)
564 563 
Finance Leases197 189 
Non-interest bearing note payable— 4 
$3,111 $3,049 
(1)Effective interest rate as of March 31, 2024 was 7.2%.
The following table shows scheduled principal payments for our debt, excluding finance leases, as of March 31, 2024.
Payments Year
($ in millions)Remaining 20242025202620272028ThereafterTotal
Term Loan$— $784 $— $— $— $— $784 
Revolving Corporate Credit Facility— — — 160 — — 160 
2028 Notes— — — — 350 — 350 
2029 Notes— — — — — 500 500 
2026 Convertible Notes— — 575 — — — 575 
2027 Convertible Notes— — — 575 — — 575 
$— $784 $575 $735 $350 $500 $2,944 
Corporate Credit Facility
Our corporate credit facility (“Corporate Credit Facility”), which provides support for our business, including ongoing liquidity and letters of credit, includes a $900 million term loan facility (the “Term Loan”), which, as of March 31, 2024, was scheduled to mature on August 31, 2025, and a revolving credit facility with a borrowing capacity of $750 million (the “Revolving Corporate Credit Facility”), which includes a letter of credit sub-facility of $75 million, that terminates on March 31, 2027.
Subsequent to the end of the first quarter of 2024, we entered into an amendment to the Corporate Credit Facility (the “Amendment”), which, among other things, provides for a new $800 million term loan facility scheduled to mature on April 1, 2031 (the “New Term Loan”). The proceeds of the New Term Loan were used to refinance in full the Term Loan, which was scheduled to mature on August 31, 2025. The interest rate applicable to the New Term Loan is the Secured Overnight Financing Rate (“SOFR”) plus 2.25%. There were no changes to the borrowing capacity or the termination date of the Revolving Corporate Credit Facility or its letter of credit sub-facility.
As of March 31, 2024, we have $200 million of interest rate swaps, under which we may pay a fixed rate of 2.17% and receive a floating interest rate through April 2024, and a $100 million interest rate collar with a cap strike price of 2.43% through April 2024, in each case, that we entered into prior to 2023 to hedge a portion of our interest rate risk on the Term Loan. Both the interest rate swap and the interest rate collar have been designated and qualify as cash flow hedges of interest rate risk and are recorded in Other assets on our Balance Sheets as of March 31, 2024 and December 31, 2023. We characterize payments we make or receive in connection with these derivative instruments as interest expense and a reclassification of accumulated other comprehensive income or loss for presentation purposes.
The following table reflects the activity in accumulated other comprehensive income or loss related to our derivative instruments during the first quarter of 2024 and 2023. There were no reclassifications to the Income Statement for any of the periods presented below.
($ in millions)20242023
Derivative instrument adjustment balance, January 1$3 $13 
Other comprehensive loss before reclassifications(2)(3)
Derivative instrument adjustment balance, March 311 10 
Senior Notes
Our senior notes include:
•$350 million aggregate principal amount of 4.750% Senior Unsecured Notes due 2028 issued in the fourth quarter of 2019 with a maturity date of January 15, 2028 (the “2028 Notes”).
•$500 million aggregate principal amount of 4.500% Senior Unsecured Notes due 2029 issued in the second quarter of 2021 with a maturity date of June 15, 2029 (the “2029 Notes”).
Convertible Notes
2026 Convertible Notes
During 2021, we issued $575 million aggregate principal amount of convertible senior notes (the “2026 Convertible Notes”) that bear interest at a rate of 0.00%. The 2026 Convertible Notes mature on January 15, 2026, unless earlier repurchased or converted in accordance with their terms prior to that date.
The conversion rate of the 2026 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes, and was subject to adjustment as of March 31, 2024 to 6.2076 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $161.09 per share of our common stock), as a result of the dividends we declared since issuance of the 2026 Convertible Notes that were greater than the quarterly dividend we paid when the 2026 Convertible Notes were issued. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election. As of March 31, 2024, the effective interest rate was 0.55%.
The following table shows interest expense information related to the 2026 Convertible Notes.
Three Months Ended
($ in millions)March 31, 2024March 31, 2023
Amortization of debt issuance costs$1 $1 
2026 Convertible Note Hedges and Warrants
In connection with the offering of the 2026 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions: convertible note hedge transactions with respect to our common stock (the “2026 Convertible Note Hedges”), covering a total of 3.6 million shares of our common stock, and warrant transactions (the “2026 Warrants”), whereby we sold to the counterparties to the 2026 Convertible Note Hedges warrants to acquire 3.6 million shares of our common stock, in each case, as of March 31, 2024. The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $161.09 and $201.36, respectively, as of March 31, 2024, and no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.
2027 Convertible Notes
During 2022, we issued $575 million aggregate principal amount of convertible senior notes (the “2027 Convertible Notes”) that bear interest at a rate of 3.25%. The 2027 Convertible Notes mature on December 15, 2027, unless earlier repurchased or converted in accordance with their terms prior to that date.
The conversion rate of the 2027 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes, and was subject to adjustment as of March 31, 2024 to 5.2776 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $189.48 per share of our common stock), as a result of the dividends we declared since issuance of the 2027 Convertible Notes that were greater than the quarterly dividend we paid when the 2027 Convertible notes were issued. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election. As of March 31, 2024, the effective interest rate was 3.88%.
The following table shows interest expense information related to the 2027 Convertible Notes.
Three Months Ended
($ in millions)March 31, 2024March 31, 2023
Contractual interest expense$4 $4 
Amortization of debt issuance costs1 1 
$5 $5 
2027 Convertible Note Hedges and Warrants
In connection with the offering of the 2027 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions: convertible note hedge transactions with respect to our common stock (the “2027 Convertible Note Hedges”), covering a total of 3.0 million shares of our common stock, and warrant transactions (the “2027 Warrants”), whereby we sold to the counterparties to the 2027 Convertible Note Hedges warrants to acquire 3.0 million shares of our common stock, in each case, as of March 31, 2024. The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $189.48 and $286.01, respectively, as of March 31, 2024, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.
Security and Guarantees
Amounts borrowed under the Corporate Credit Facility, as well as obligations with respect to letters of credit issued pursuant to the Corporate Credit Facility, are secured by a perfected first priority security interest in substantially all of the assets of the borrowers under, and guarantors of, that facility (which include MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding certain bankruptcy remote special purpose subsidiaries), subject to certain exceptions. In addition, the Corporate Credit Facility, the 2026 Convertible Notes, the 2027 Convertible Notes, the 2028 Notes, and the 2029 Notes are guaranteed by MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding bankruptcy remote special purpose subsidiaries.