Long-Term Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Long-Term Debt

(7)Long-Term Debt

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

	June 30, 2022		December 31, 2021
Term A Loan	$	1,135.6	$	1,150.0
Revolving Credit Facility		646.7		256.0
Senior Notes		1,000.0		1,000.0
Other		5.8		8.9
Total long-term debt principal		2,788.1		2,414.9
Less: current portion of long-term debt		(33.6)		(32.5)
Long-term debt before debt issuance costs and discount		2,754.5		2,382.4
Less: debt issuance costs and discount		(17.8)		(19.8)
Long-term debt, net of current portion	$	2,736.7	$	2,362.6

As of June 30, 2022, principal maturities, including payments related to our finance leases, are as follows (in millions):

2022	$	15.2
2023		33.7
2024		57.5
2025		57.5
2026		1,624.2
Thereafter		1,000.0
Total	$	2,788.1

2021 Credit Agreement

On March 10, 2021, our indirect subsidiary Black Knight Infoserv, LLC (“BKIS”) entered into a second amended and restated credit and guaranty agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto, the other agents party thereto and the lenders party thereto.

The 2021 Credit Agreement provides for (i) a $1,150.0 million term loan A facility (the “Term A Loan”) and (ii) a $1,000.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term A Loan, collectively, the “Facilities”), the proceeds of which were used to repay in full the indebtedness outstanding under the previous term A facility and revolving credit facility. As a result of the refinancing, we recognized $2.5 million of expense during the six months ended June 30, 2021 in Other expense, net on the Condensed Consolidated Statement of Earnings and Comprehensive Earnings (Unaudited).

As of June 30, 2022, the interest rate for the Facilities was based on the Eurodollar rate plus a margin of 150 basis points and was approximately 3.1%. As of June 30, 2022, we had $353.3 million unused capacity on the Revolving Credit Facility, and the unused commitment fee was 20 basis points.

The Facilities are guaranteed by BKIS’s wholly-owned domestic restricted subsidiaries, as defined by the 2021 Credit Agreement, and Black Knight Financial Services, LLC, and are secured by associated collateral agreements that pledge a lien on the majority of BKIS’s assets and the assets of the guarantors, in each case, subject to customary exceptions.

Senior Notes

On August 26, 2020, BKIS completed the issuance and sale of $1.0 billion aggregate principal amount of 3.625% senior unsecured notes due 2028 (the "Senior Notes"). The Senior Notes have a coupon rate of 3.625% and mature on September 1, 2028. Interest is paid semi-annually in arrears on September 1 and March 1 of each year and commenced on March 1, 2021. The obligations under the Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by the same guarantors that guarantee the 2021 Credit Agreement (collectively, the “Guarantors”). The Senior Notes are effectively subordinated to any obligations that are secured, including obligations under the 2021 Credit Agreement, to the extent of the value of the assets securing those obligations. The Senior Notes are structurally subordinated to all liabilities of BKIS’ subsidiaries that do not guarantee the Senior Notes.

Other Debt

Other debt includes financing agreements primarily related to certain data processing and maintenance services and finance lease agreements for certain computer equipment. For the six months ended June 30, 2021, non-cash investing and financing activity was $2.5 million related to the unpaid portion of our finance lease agreements. There was no non-cash investing and financing activity for the six months ended June 30, 2022.

Fair Value of Long-Term Debt

The fair values of our Facilities and Senior Notes are based upon established market prices for the securities using Level 2 inputs. The fair value of our Facilities approximates their carrying value as of June 30, 2022. The fair value of our Senior Notes as of June 30, 2022 was $870.0 million compared to its carrying value of $990.4 million, net of original issue discount and debt issuance costs.

Interest Rate Swaps

We enter into interest rate swap agreements to hedge forecasted monthly interest rate payments on our floating rate debt. As of June 30, 2022, we had the following interest rate swap agreements (collectively, the "Swap Agreements") (in millions):

Effective dates	Notional amount		Fixed rates
April 30, 2018 through April 30, 2023	$	250.0	2.61	%
January 31, 2019 through January 31, 2023	$	300.0	2.65	%

Under the terms of the Swap Agreements, we receive payments based on the 1-month LIBOR (approximately 1.67% as of June 30, 2022).

During the six months ended June 30, 2022, the following interest rate swap agreement expired (in millions):

Effective dates	Notional amount		Fixed rate
March 31, 2017 through March 31, 2022	$	200.0	2.08	%

We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated these Swap Agreements as cash flow hedges. A portion of the amount included in Accumulated other comprehensive loss is reclassified into Interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparties will be able to fulfill their obligations under our agreements, and we believe we will have debt outstanding through the various expiration dates of the swaps such that the occurrence of future cash flow hedges remains probable.

The estimated fair values of our Swap Agreements are as follows (in millions):

	June 30, 2022		December 31, 2021
Other current assets	$	1.0	$	—
Other current liabilities	$	—	$	1.0
Other non-current liabilities	$	—	$	13.9

A cumulative gain of $1.0 million ($0.7 million net of tax) and cumulative loss of $14.9 million ($11.1 million net of tax) is reflected in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2022 and December 31, 2021, respectively. Below is a summary of the effect of derivative instruments on amounts recognized in Other comprehensive earnings (loss) ("OCE") on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) (in millions):

	Three months ended June 30,
	2022				2021
			Amount of loss				Amount of loss
	Amount of gain		reclassified from		Amount of loss		reclassified from
	recognized		Accumulated OCE		recognized		Accumulated OCE
	in OCE		into Net earnings		in OCE		into Net earnings
Swap agreements	$	2.3	$	2.0	$	(0.2)	$	4.0

	Six months ended June 30,
	2022				2021
			Amount of loss				Amount of loss
	Amount of gain		reclassified from		Amount of gain		reclassified from
	recognized		Accumulated OCE		recognized		Accumulated OCE
	in OCE		into Net earnings		in OCE		into Net earnings
Swap agreements	$	6.6	$	5.2	$	0.3	$	7.9

As of June 30, 2022, the remaining balance in Accumulated other comprehensive loss is expected to be reclassified into Interest expense, net over the remaining term (less than 1 year).