Short-Term Borrowings and Long-Term Debt

9 Months Ended

Sep. 30, 2021

Short-Term Borrowings and Long-Term Debt

Details of carrying amounts of short-term borrowings were as follows:


(in thousands)				Borrowing Limit		September 30, 2021		December 31, 2020
Maturity Date	Interest rate (%)
January 7, 2022	CD interest rate (91 days) + 3.25			$	126,593	$	126,593	$	137,868
December 6, 2021 – June 25, 2022	3.20	–	4.00	41,649		41,649		19,117
Total principal short-term borrowings				$	168,242	$	168,242	$	156,985
Less: unamortized discounts						(190)		(307)
Total short-term borrowings						$	168,052	$	156,678

The Company’s short-term borrowings generally include lines of credit with financial institutions to be drawn upon for general operating purposes.

In December 2019, the Company entered into a one-year revolving facility agreement, secured by the Company’s inventories. As of September 30, 2021, this $127 million revolving facility was secured by $1.2 billion of the Company’s inventories. Prior to the expiration of the original term of the revolving facility in January 2021, the Company exercised an option that allowed it to extend the maturity of the borrowing facility for an additional 364 days from the expiration date. The revolving facility bears interest at the average of final quotation yield rates for 91-day KRW-denominated bank certificate of deposit (“CD interest rate”) plus 3.25%, and has a commitment fee of 0.75% on the undrawn portion. Under the facility agreement, Coupang Corp., one of the Company’s wholly-owned subsidiaries, is restricted from loaning money to its parent, Coupang, Inc.

Details of carrying amounts of long-term debt were as follows:


(in thousands)						September 30, 2021		December 31, 2020
Maturity Date	Interest rate (%)			Borrowing Limit
February 27, 2024(1)	(5)			$	1,000,000	$	—	$	—
October 21, 2021 – March 26, 2023(2)	3.10	–	5.10	36,595		24,596		50,713
November 28, 2021(3)	5.20			3,205		3,205		19,199
December 23, 2021 – August 12, 2024(4)	2.87	–	8.50	557,852		528,651		354,963
Total principal long-term debt				$	1,597,652	$	556,452	$	424,875
Less: current portion of long-term debt						(385,888)		(67,576)
Less: unamortized discounts						(1,231)		(3,957)
Total long-term debt						$	169,333	$	353,342

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(1)Relates to the Company’s new revolving credit facility as described below.

(2)The Company entered into various loan agreements with fixed interest rates for general operating purposes.

(3)In November 2019, the Company entered into a fixed-rate term loan facility agreement, secured by certain of the Company’s accounts receivable. At September 30, 2021, the Company had $3 million deposited in a trust account for repayment guarantee purposes, which is classified as short-term restricted cash on the condensed consolidated balance sheets. Principal and interest are to be paid on a monthly basis.

(4)In March 2017, the Company entered into a term loan facility agreement. The Company was required to pledge certain land, building, inventories, and short-term financial instruments as collateral. However, as a result of the FC Fire, the building and inventories were extensively damaged, and on August 4, 2021, the term loan facility agreement was amended to replace the original collateral with $194 million in cash secured as collateral and to repay $70 million of the outstanding principal balance. The amendment, which took place within the cure period, subsequently resulted in the Company being in compliance with its term loan facility agreement. Principal is to be paid at maturity and interest is paid on a quarterly basis. Later in August 2021, the Company entered into a new $169 million three-year term loan agreement. The Company pledged $203 million of certain land and buildings as collateral. The loan bears interest at a fixed rate of 3.155%. Principal is to be paid at maturity and interest is paid on a monthly basis.

(5)Borrowings under the new revolving credit facility bear interest, at the Company’s option, at a rate per annum equal to (i) a base rate equal to the highest of (A) the prime rate, (B) the higher of the federal funds rate or a composite overnight bank borrowing rate plus 0.50%, or (C) an adjusted LIBOR for a one-month interest period plus 1.00% or (ii) an adjusted LIBOR plus a margin equal to 1.00%.

In February 2021, the Company entered into a new three-year senior unsecured credit facility (the “new revolving credit facility”) providing for revolving loans in an aggregate principal amount of up to $475 million (which automatically increased to an aggregate principal amount of $950 million based on the Company receiving at least $2.0 billion in net proceeds from its IPO). The new revolving credit facility provides the Company the right to request incremental commitments up to $1.25 billion, subject to customary conditions. During March 2021, the aggregate principal amount of the Company’s new revolving credit facility increased to an aggregate principal amount of $1.0 billion as a result of its IPO. As of September 30, 2021, there was no balance outstanding on the new revolving credit facility.

The new revolving credit facility contains customary affirmative and negative covenants, including certain financial covenants. The new revolving credit facility is guaranteed on a senior unsecured basis by all material restricted subsidiaries of the Company, subject to customary exceptions. Borrowings under the new revolving credit facility are not permitted to the extent any amounts are drawn under our existing revolving credit facility.

The Company was in compliance with the covenants for each of its borrowings and debt agreements as of September 30, 2021.

In October 2021, the Company entered into a new two-year loan agreement to borrow up to $139 million to finance the construction of a fulfillment center. The Company pledged up to $167 million of certain existing land and a building to be constructed as collateral. The loan bears interest at a fixed rate of 3.45%.

The Company’s long-term debt is recorded at amortized cost. The fair value is estimated using Level 2 inputs based on the Company’s current interest rate for similar types of borrowing arrangements. The carrying amount of the long-term debt approximates its fair value as of September 30, 2021 and December 31, 2020 due primarily to the interest rates approximating market interest rates.

Future principal payments for long-term debt as of September 30, 2021 were as follows:


(in thousands)	Long-term debt
Remainder of 2021	$	24,356
2022	363,083
2023	222
2024	168,791
2025	—
Thereafter	—
Total	$	556,452