Debt

6 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

6.Debt

The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below.

Debt consisted of the following:

(In millions)	As of December 31, 2022			As of July 2, 2022
Credit Agreement	$	1,376.3		$	1,608.4
6.875% Notes due 2025		275.0			275.0
5.500% Notes due 2027		1,060.0			1,060.0
4.250% Notes due 2029		1,000.0			1,000.0
Less: Original issue discount and deferred financing costs		(31.8	)		(34.6	)
Long-term debt		3,679.5			3,908.8
Less: current installments		-			-
Total debt, excluding current installments	$	3,679.5		$	3,908.8

Credit Agreement

PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, and Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, are parties to the Fifth Amended and Restated Credit Agreement dated September 17, 2021 (the “ABL Facility”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto. The ABL Facility has an aggregate principal amount available of $4.0 billion and matures September 17, 2026.

Performance Food Group, Inc. is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than the captive insurance subsidiary and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread, or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee rate of 0.25% per annum.

The following table summarizes outstanding borrowings, availability, and the average interest rate under the Company's ABL Facility:

(Dollars in millions)	As of December 31, 2022			As of July 2, 2022
Aggregate borrowings	$	1,376.3		$	1,608.4
Letters of credit		179.2			190.5
Excess availability, net of lenders’ reserves of $90.0 and $104.4		2,444.5			2,201.1
Average interest rate, excluding impact of interest rate swaps		5.78	%		2.89	%