Short-term Borrowings and Long-term Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Short-term Borrowings and Long-term Debt

Short-term Borrowings and Long-term Debt

Our short-term borrowings generally include lines of credit and term loan facilities with financial institutions to be utilized for general operating purposes.

In April 2023, we entered into a new one-year $59 million credit loan facility for general operating purposes. The loan bears interest at the average of 91-day CD interest rate plus 4.40%.

In September 2023, we modified our existing one-year term syndicated loan agreement and extended the maturity date to September 2024. The remaining $67 million outstanding bears interest at a rate of 5.56%.

Our long-term debt generally includes revolving credit facilities and various loan agreements for general operating purposes, and term loan facilities. As of September 30, 2023 and December 31, 2022, there were $910 million and $667 million, respectively, of loans outstanding under these agreements, net of unamortized discounts.

In April 2023, we entered into a new three-year $171 million term loan facility agreement to finance the purchase of a fulfillment center and land. We pledged up to $205 million of certain land and buildings as collateral. The loan bears interest at a fixed rate of 6.76%.

Our 2021 revolving credit facility was amended in accordance with the agreement to provide for the replacement of the London Inter-bank offered rate (“LIBOR”) with an alternative benchmark rate. Effective July 1, 2023, the facility replaced the LIBOR rate with the Secured Overnight Funding Rate (“SOFR”). Borrowings under the 2021 revolving credit facility will bear interest, at our 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 Term SOFR rate for a one-month interest period plus 1.00% or (ii) an adjusted Term SOFR plus a margin equal to 1.00%. No borrowings have been made under the facility.

Our debt is recorded at amortized cost. The fair value is estimated using Level 2 inputs based on our current interest rate for similar types of borrowing arrangements. The carrying amount of debt approximates its fair value as of September 30, 2023 and December 31, 2022 due primarily to the interest rates approximating market interest rates.

We were in compliance with the covenants for each of our borrowings and debt agreements as of September 30, 2023.