Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

NOTE 9.  Debt

2021 Debt Repricing

On February 18, 2021, the Company entered into the Second Amendment (the “Second Amendment”) to the 2019 Credit Agreement with the other loan parties thereto, Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. Pursuant to the Second Amendment, the Company repriced the existing term loans (the “2020 Term Loans”) with replacement term loans in an aggregate principal amount of $755.7 million (the “Repriced Term Loans”). The Repriced Term Loans provide for substantially the same terms as the 2020 Term Loans, including the same maturity date of July 2026, except that the Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points. After the Second Amendment, the applicable margin on LIBOR under the Repriced Term Loans is 2.25%.

2021 Incremental Term Loans

On December 31, 2021, the Company entered into the Third Amendment (the “Third Amendment”) to the 2019 Credit Agreement with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time. Pursuant to the Third Amendment, the Company obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $505.0 million and used the proceeds to fund the WestEnd Acquisition and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans mature in December 2028 and bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%.

Original issue discount was $2.5 million for the 2021 Incremental Term Loans. The Company incurred a total of $9.1 million of other third party costs related to the 2021 Incremental Term Loans, which were recorded as term loan debt issuance costs.

The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

(in thousands)	March 31, 2022			December 31, 2021			Effective Interest Rate as of March 31, 2022
Term Loans
Due July 2026, 2.47% interest rate, resets April 6, 2022	$	646,239		$	646,239		2.86%
Due December 2028, 3.26% interest rate, reset March 31, 2022		435,000			505,000		3.58%
Term loan principal outstanding		1,081,239			1,151,239
Unamortized debt issuance costs		(14,496	)		(16,436	)
Unamortized debt discount		(6,214	)		(6,879	)
Long-term debt, net	$	1,060,529		$	1,127,924

The Company elects to use the three-month LIBOR rate plus the margin on LIBOR required by the 2019 Credit Agreement to pay interest on its debt.  The 2019 Credit Agreement provides for a mechanism for determining an alternative interest rate following the phase-out of LIBOR, which for the three-month rate is expected to occur following the publication of LIBOR rates on June 30, 2023. In addition, the 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00. As of March 31, 2022, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with the financial performance covenant.

Repayments of outstanding term loans under the 2019 Credit Agreement totaled $70.0 million and $50.0 million for the three months ended March 31, 2022 and 2021, respectively. Refer to Note 17, Subsequent Events, for information related to term loan activity subsequent to March 31, 2022.

The Company recognized a $1.6 million loss on debt extinguishment in the three months ended March 31, 2022, due to repayments of term loan principal, which consisted of the write-off of $1.2 million and $0.4 million of unamortized debt issuance costs and debt discount, respectively. During the three months ended March 31, 2021, the Company recognized a net loss on debt extinguishment of $2.8 million due to repayments of term loan principal and execution of the Second Amendment, which consisted of the write-off of $1.8 million and $1.0 million of unamortized debt issuance costs and debt discount, respectively.

The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021.

	For the Three Months Ended March 31,
(in thousands)	2022		2021
Interest expense	$	7,120	$	4,929
Amortization of debt issuance costs		843		662
Amortization of debt discount		328		321
Interest rate swap expense		849		818
Other		93		115
Total	$	9,233	$	6,845