Long-Term Debt and Other Borrowings

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

Long-Term Debt and Other Borrowings

Note 9: Long-Term Debt and Other Borrowings

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

	As of
	March 31, 2025		December 31, 2024
Collateralized:
Term Loan, due January 2030 Tranche-1, net of unamortized discount and financing costs of $9.5 million and $9.5 million, respectively	$	980.5	$	980.5
Term Loan, due January 2030 Tranche-2, net of unamortized discount and financing costs of $16.9 million and $17.8 million, respectively	955.6		979.7
6.750% Senior Secured Notes, due May 2028, net of unamortized financing costs of $4.5 million and $4.9 million, respectively	645.5		645.1
8.875% Senior Secured Notes, due September 2031, net of unamortized discount and financing costs of $5.6 million and $5.8 million, respectively	394.4		394.2
Finance lease liabilities	35.6		36.4
Total	3,011.6		3,035.9
Less: current portion of long-term debt	(101.1)		(96.3)
Total Long-term debt, net	$	2,910.5	$	2,939.6

2018 Credit Agreement

On August 21, 2018, the Company entered into an initial $3.5 billion credit agreement (as amended from time to time, the “2018 Credit Agreement”), comprised of an initial $2.7 billion senior secured term loan (the “Initial Term Loan”) and a revolving credit facility (the “Revolver”).

Term Loans

In 2023, the Company amended the 2018 Credit Agreement to extend the maturity date of $2.0 billion of the aggregate principal amount outstanding under the Initial Term Loan to January 31, 2030. In 2023, the Company also used proceeds from the offering of $400.0 million in senior secured notes (discussed below) to repay a portion of principal outstanding under the Initial Term Loan. As of December 31, 2023, the Company had $1.0 billion in aggregate principal outstanding due January 31, 2030, referred to as the “2030 Tranche-1,” $1.0 billion in aggregate principal outstanding due January 31, 2030, referred to as the “2030 Tranche-2,” and $192.9 million in aggregate principal outstanding due August 21, 2025, referred to as the “2025 Tranche” (collectively referred to as the “Term Loans”).

In 2024, the Company amended the 2018 Credit Agreement to reprice the 2030 Tranche-1 and the 2030 Tranche-2, reducing the applicable interest rate. As a result of the reprices, the Company incurred additional debt transaction costs which were capitalized and will be amortized over the remaining term of the loan. In 2024, the Company also elected to prepay the full $192.9 million principal balance of the 2025 Tranche.

On January 22, 2025, the Company amended the 2018 Credit Agreement to reprice the 2030 Tranche-1, reducing the applicable interest rate from 1-month Term Secured Overnight Financing Rate (“SOFR”) plus 3.00% to 1-month Term SOFR plus 2.75%. There were no other material changes to the terms and conditions of the 2018 Credit Agreement. As a result of the reprice, the Company incurred additional debt transaction costs of $1.5 million, of which $0.3 million were capitalized and will be amortized over the remaining term of the loan and $1.2 million were recognized directly in Interest expense, net of interest income.

In March 2025, the Company elected to prepay $25.0 million in principal outstanding under the 2030 Tranche-2.

The 2018 Credit Agreement requires quarterly principal payments equal to 0.25% of the aggregate principal amount of outstanding borrowings under the 2030 Tranche-1 and the 2030 Tranche-2, including any incremental borrowings. The 2018 Credit Agreement amendments entered into in the fourth quarter of 2024 and first quarter of 2025 deferred the mandatory principal payments for the 2030 Tranche-2 and 2030 Tranche-1 with such principal payments re-commencing in June 2025 and September 2025, respectively.

The Term Loans bear interest at a variable rate that the Company may select per the terms of the 2018 Credit Agreement. As of March 31, 2025, the Company elected to use an annual rate equal to (i) 1-month Term SOFR (subject to a minimum floor of 0.50%), plus 2.75% for the 2030 Tranche-1 and (ii) 1-month Term SOFR (subject to a minimum floor of 0.50%), plus 3.25% for the 2030 Tranche-2. As of March 31, 2025, the effective interest rates were 7.28% and 8.00% for the 2030 Tranche-1 and the 2030 Tranche-2, respectively.

Revolver

As of March 31, 2025, borrowing capacity under the Revolver was $1.1 billion. Borrowings under the Revolver, if any, bear interest at our option, at 1-month Term SOFR, plus 0.10%, plus an applicable rate varying from 1.75% to 2.75% based on achievement of certain Net Leverage Ratios (as defined in the 2018 Credit Agreement). The Revolver was undrawn as of March 31, 2025 and December 31, 2024.

Senior Secured Notes due 2028

On May 22, 2020, the Company issued $650.0 million of senior secured notes due May 15, 2028 (the “2028 Notes”). Net proceeds from the 2028 Notes were $638.5 million, consisting of a $650.0 million aggregate principal amount less $11.5 million from issuance costs. The 2028 Notes were offered in a private placement exempt from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The 2028 Notes bear interest at a fixed rate of 6.75% and yielded an effective interest rate of 6.75% as of March 31, 2025.

Senior Secured Notes due 2031

On August 24, 2023, the Company issued $400.0 million of senior secured notes due September 1, 2031 (the “2031 Notes”). Net proceeds from the 2031 Notes were $392.8 million, consisting of a $400.0 million aggregate principal amount less $7.2 million from issuance costs. The 2031 Notes were offered in a private placement exempt from registration under the Securities Act. The 2031 Notes bear interest at a fixed rate of 8.88% and yielded an effective interest rate of 8.80% as of March 31, 2025.

Financial Covenant and Related Terms

The 2018 Credit Agreement has a springing financial covenant, tested on the last day of each fiscal quarter if the outstanding borrowings under the Revolver exceed an applicable threshold. If the financial covenant is triggered, the Net Leverage Ratio (as defined in the 2018 Credit Agreement) may not exceed 5.00 to 1.00. In addition, the 2018 Credit Agreement, the indenture governing the 2028 Notes and the indenture governing the 2031 Notes impose certain operating and financial restrictions on the Company, and in the event of certain defaults, all of the Company’s outstanding borrowings under the 2018 Credit Agreement, the 2028 Notes and the 2031 Notes, together with accrued interest and other fees, could become immediately due and payable.

The Company was in compliance with all of the covenants under the 2018 Credit Agreement, the indenture governing the 2028 Notes and the indenture governing the 2031 Notes as of March 31, 2025 and December 31, 2024.