On April 1, 2021, the Company completed a private offering of our Senior Secured Second Lien Notes (the “Notes”), for the purposes of, among other things, repayment and refinancing of a portion of the Company’s prior existing debt, reducing interest rate exposure and providing liquidity for financing of future growth initiatives.

On April 1, 2021, the Company sold $315 million of our 5.625% Notes which are due in 2026. The Notes are guaranteed (the “Guarantees” and, together with the Notes, the “Securities”) by the guarantors that are party thereto (the “Guarantors”) on a second lien, senior secured basis. The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement among the Company, the Guarantors, and J.P. Morgan Securities LLC, as representative of the initial purchasers.

The Notes are guaranteed by each of our existing and future domestic subsidiaries that becomes a borrower or guarantor under our or the Guarantors’ indebtedness, including the Credit Agreements, as amended and restated concurrently with the closing of the Notes offering. The Notes and the Guarantees are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all of our assets and the assets of the Guarantors that secure on a first-priority basis all of the indebtedness under our ABL Facility and the Floor Plan Facility and certain hedging and cash management obligations, including, but not limited to, equipment, fixtures, inventory, intangibles and capital stock of our restricted subsidiaries now owned or acquired in the future by us or the Guarantors.

The Notes bear interest at the rate of 5.625% per annum and will mature on April 15, 2026. Interest on the Notes is payable in cash on April 15 and October 15 of each year, beginning on October 15, 2021. The October 15, 2021 interest payment was made on or about October 15, 2021.

As of September 30, 2021, outstanding borrowings under the Notes were $309.7 million, which included $5.3 million deferred financing costs and original issue discounts. The effective interest rate on the Notes, taking into account the original issue discount, is 5.93%.

On February 14, 2020, the Company entered into a Note Purchase Agreement which comprised of a second lien term loan (the “Term Loan”) in an aggregate principal amount of $155.0 million with a second priority lien lender through syndication, with an initial maturity date of August 2025. The term loan was payable, at the lender’s option, in quarterly installments of $1.9 million plus interest at LIBOR plus 8%. On April 1, 2021, in connection with the issuance of the new Notes, the Company repaid all of its outstanding obligations under the Term Loan, $147.3 million, completely discharging the Company of any further obligations to the lender.

In the second quarter of 2021, and in connection with the repayment of the Term Loan, the Company recorded a loss on the extinguishment of debt in the amount of $11.9 million in the line item “Loss on Extinguishment of Debt” in its Consolidated Statements of Operations. This was in accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), as the transaction was determined to be an extinguishment of the existing debt and an issuance of new debt.

In the second quarter of 2020, the Company recorded a loss on the extinguishment of debt in the amount of $7.6 million in the line item “Loss on extinguishment of debt” in its Consolidated Statements of Operations. This was in accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), as the transaction was determined to be an extinguishment of the existing debt and an issuance of new debt.

	September 30,			December 31,
	2021			2020
High yield notes	$	315.0		$	—
Term loan		—			149.2
Unamortized debt issuance costs		(1.1	)		(1.8	)
Debt discount		(4.2	)		(4.6	)
Capital leases		0.8			1.5
Total debt and capital leases	$	310.5		$	144.3
Less: current maturities		(0.6	)		(8.7	)
Long-term debt and capital leases, net	$	309.9		$	135.6

As of September 30, 2021, the Company was in compliance with the financial covenants set forth in its debt agreements.

On June 12, 2020, the Company entered into an unsecured promissory note for $1.0 million at an interest rate of 6.0% on the unpaid principal sum in connection with the PeakLogix acquisition which was due one year from the date of the acquisition. During the second quarter of 2021, the Promissory Note of $1.1 million, inclusive of accrued interest, was paid in full.

The Company acquired all the assets of PeakLogix on June 12, 2020. Pursuant to the asset purchase agreement, Sellers are entitled to additional cash payments of a minimum of $2.0 million throughout a 5-year earn-out period. As of September 30, 2021, the Company recorded a $1.8 million liability which included a $1.7 million related to present value of these minimum cash payments using a market participant discount rate and $0.1 million of imputed interest. This additional future liability is recorded as non-contingent liability in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets. See Note 15, Fair Value Instruments and Note 16, Business Combinations for further information.