Long-Term Debt

6 Months Ended

Jun. 30, 2020

Long-term debt consists of the following (in millions):


	As of
	June 30, 2020		December 31, 2019
Term Loan B (due November 19, 2026)	$	5,323	$	5,350
Term Loan A (due October 7, 2024)	741		750

2017 4.25% Senior Notes (due May 15, 2024)	1,500		1,500
2019 3.875% Senior Notes (due January 15, 2028)	750		750
2020 5.75% Senior Notes (due April 15, 2025)	500		—
2017 5.00% Senior Notes (due October 15, 2025)	2,800		2,800
2019 4.375% Senior Notes (due January 15, 2028)	750		750
TH Facility and other	169		81
Less: unamortized deferred financing costs and deferred issue discount	(145)		(148)
Total debt, net	12,388		11,833
Less: current maturities of debt	(78)		(74)
Total long-term debt	$	12,310	$	11,759

Credit Facilities

In March 2020, we drew $995 million on our senior secured revolving credit facility (the "Revolving Credit Facility"), which we repaid in June 2020. As of June 30, 2020, we had no amounts outstanding under our Revolving Credit Facility, had $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability under our Revolving Credit Facility was $998 million. Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or RBI share repurchases, fund acquisitions or capital expenditures and for other general corporate purposes. We have a $125 million letter of credit sublimit as part of the Revolving Credit Facility, which reduces our borrowing availability thereunder by the cumulative amount of outstanding letters of credit.

On April 2, 2020, two of our subsidiaries (the "Borrowers") entered into a fifth amendment (the "Fifth Amendment") to the credit agreement (the "Credit Agreement") governing our senior secured term loan facilities (the "Term Loan Facilities") and Revolving Credit Facility. The Fifth Amendment provides the Borrowers with the option to comply with a $1,000 million minimum liquidity covenant in lieu of the 6.50:1.00 net first lien senior secured leverage ratio financial maintenance covenant for the period after June 30, 2020 and prior to September 30, 2021. Additionally, for the periods ending September 30, 2021 and December 31, 2021, to determine compliance with the net first lien senior secured leverage ratio, we are permitted to annualize the Adjusted EBITDA (as defined in the Credit Agreement) for the three months ending September 30, 2021 and six months ending December 31, 2021, respectively, in lieu of calculating the ratio based on Adjusted EBITDA for the prior four quarters. There were no other material changes to the terms of the Credit Agreement.

TH Facility

One of our subsidiaries entered into a non-revolving delayed drawdown term credit facility in a total aggregate principal amount of C$225 million with a maturity date of October 4, 2025 (the “TH Facility”). The interest rate applicable to the TH Facility is the Canadian Bankers’ Acceptance rate plus an applicable margin equal to 1.40% or the Prime Rate plus an applicable margin equal to 0.40%, at our option. Obligations under the TH Facility are guaranteed by four of our subsidiaries, and amounts borrowed under the TH Facility are secured by certain parcels of real estate. During the six months ended June 30, 2020, we drew down the remaining availability of C$125 million under the TH Facility and, as of June 30, 2020, we had outstanding C$225 million under the TH Facility with a weighted average interest rate of 1.93%.

2020 Senior Notes

On April 7, 2020, the Borrowers entered into an indenture (the "2020 5.75% Senior Notes Indenture") in connection with the issuance of $500 million of 5.75% first lien notes due April 15, 2025 (the "2020 5.75% Senior Notes"). No principal payments are due until maturity and interest is paid semi-annually. The net proceeds from the offering of the 2020 5.75% Senior Notes were used for general corporate purposes. In connection with the issuance of the 2020 5.75% Senior Notes, we capitalized approximately $9 million in debt issuance costs.

Obligations under the 2020 5.75% Senior Notes are guaranteed on a senior secured basis, jointly and severally, by the Borrowers and substantially all of the Borrowers' Canadian and U.S. subsidiaries, including The TDL Group Corp., Burger King Worldwide, Inc., Popeyes Louisiana Kitchen, Inc. and substantially all of their respective Canadian and U.S. subsidiaries (the "Note Guarantors"). The 2020 5.75% Senior Notes are first lien senior secured obligations and rank equal in right of payment with all of the existing and future first lien senior debt of the Borrowers and Note Guarantors, including borrowings and guarantees of the Credit Facilities.

Our 2020 5.75% Senior Notes may be redeemed in whole or in part, on or after April 15, 2022 at the redemption prices set forth in the 2020 5.75% Senior Notes Indenture, plus accrued and unpaid interest, if any, at the date of redemption. The 2020 5.75% Senior Notes Indenture also contains optional redemption provisions related to tender offers, change of control and equity offerings, among others.

Restrictions and Covenants

As of June 30, 2020, we were in compliance with all applicable financial debt covenants under the Credit Facilities, the TH Facility, and the indentures governing our Senior Notes.

Fair Value Measurement

The following table presents the fair value of our variable rate term debt and senior notes, estimated using inputs based on bid and offer prices that are Level 2 inputs, and principal carrying amount (in millions):


	As of
	June 30, 2020		December 31, 2019
Fair value of our variable term debt and senior notes	$	12,152	$	12,075
Principal carrying amount of our variable term debt and senior notes	12,364		11,900

Interest Expense, net

Interest expense, net consists of the following (in millions):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Debt (a)	$	119	$	128	$	232	$	252
Finance lease obligations	5		6		10		11
Amortization of deferred financing costs and debt issuance discount	6		8		12		15
Interest income	(2)		(5)		(7)		(9)
Interest expense, net	$	128	$	137	$	247	$	269

(a)Amount includes $20 million and $19 million benefit during the three months ended June 30, 2020 and 2019, respectively, and $41 million and $37 million benefit during the six months ended June 30, 2020 and 2019, respectively, related to the amortization of the Excluded Component as defined in Note 13, Derivatives.