DEBT AND BORROWING ARRANGEMENTS

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

DEBT AND BORROWING ARRANGEMENTS

DEBT AND BORROWING ARRANGEMENTS

On September 30, 2022, and as amended on February 15, 2023, Atmus entered into the Credit Agreement with Cummins and a syndicate of banks, providing for a $600 million term loan facility (the “term loan”) and a $400 million revolving credit facility (the “revolving credit facility”), in anticipation of the Separation. Borrowings under the Credit Agreement did not become available under the Credit Agreement until the IPO occurred. The facilities covered by the Credit Agreement will mature on September 30, 2027.

Upon completion of the IPO, we borrowed approximately $650 million, consisting of proceeds of the term loan and amounts drawn under the revolving credit facility, and paid such amounts to Cummins in partial consideration for the Separation.

Borrowings under the Credit Agreement bear interest at varying rates, depending on the type of loan and, in some cases, the rates of designated benchmarks and the applicable election made. Generally, U.S. dollar-denominated loans bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”) (which includes a 0.10 percent credit spread adjustment to SOFR) for the applicable interest period plus a rate ranging from 1.125 percent to 1.75 percent depending on Atmus’s net leverage ratio. As of June 30, 2023, $600 million has been drawn on the term loan and $50 million has been drawn on the revolving credit facility, which are included within Long-term debt on the Balance Sheet. As of June 30, 2023, Atmus’s fair value of Long-term debt was approximately $650 million.

Our credit lines available as of June 30, 2023 and December 31, 2022 include:

	As of June 30, 2023				As of December 31, 2022
	Facility Amount		Borrowed Amount		Facility Amount	Borrowed Amount
	(in millions)
Credit facilities:
Term loan    September 30, 2027(1)	$	600.0	$	600.0	—	—
Revolving credit facility    September 30, 2027(1)	400.0		50.0		—	—

(1)Atmus maintains a term loan facility and a revolving credit facility as part of the Credit Agreement. The Credit Agreement includes financial covenants that Atmus maintain certain net leverage, secured net leverage and interest coverage ratios. At June 30, 2023, Atmus complied with all financial covenants. The Credit Agreement also contains customary representations, events of default and covenants, including restrictions on the level of borrowing.

Over the next five years, aggregate principal maturities of our long-term debt are (in millions):

2024		2025		2026		2027		2028		Thereafter		Total
$	—	$	—	$	—	$	650.0	$	—	$	—	$	650.0