Credit Agreement

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Credit Agreements

On March 29, 2019, the Company entered into a Second Amended and Restated Credit Agreement (“Restated Credit Agreement”) with Bank of America, N.A., JPMorgan Chase Bank, N.A., U.S. Bank National Association, Citibank, N.A., MUFG Union Bank, N.A., and the other lenders party thereto. The Restated Credit Agreement amended and restated the Company's Original Credit Agreement, dated as of May 31, 2016. The Restated Credit Agreement provides for a $650.0 million unsecured revolving credit facility, a $100.0 million unsecured term loan facility available in U.S. dollars amortizing at 5.000 percent per annum, and a $150.0 million unsecured term loan facility available in Swedish kronor amortizing at 5.000 percent per annum. The Restated Credit Agreement has a term of five years and matures on March 29, 2024. In connection with the closing of the Restated Credit Agreement, the Company made an initial borrowing of $100.0 million in revolving loans, $100.0 million in term loans in U.S. dollars, and the equivalent of $150.0 million in term loans in Swedish kronor. Additionally, the Company repaid in full all outstanding amounts, consisting of revolving loans in an aggregate principal amount of $375.0 million, under the Original Credit Agreement.

The Company has the right, subject to certain conditions, including approval of additional commitments by qualified lenders, to increase the availability under the revolving credit facility by an additional $200.0 million until March 29, 2024. The Restated Credit Agreement allows the Company and certain designated subsidiaries to borrow in United States dollars, European euros, Swedish kronor, British pound sterling, Japanese yen, Canadian dollars, Australian dollars, and other agreed upon currencies. Interest rates under the Restated Credit Agreement are determined from the type and tenor of the borrowing and includes loans based on the published term Eurocurrency rate (e.g. LIBOR) in which the loan is denominated. The Eurocurrency rate loans have a floor of zero percent and an applicable margin that ranges from 1.000 percent to 1.375 percent depending on the Company’s consolidated total leverage ratio. At December 31, 2019, the borrowing rate on the revolving loan was 3.049 percent per annum, the borrowing rate on the U.S. dollar term loan was 3.195 percent per annum and the borrowing rate on the Swedish kronor term loan was 1.348 percent per annum unadjusted for hedging. The Restated Credit Agreement requires the Company to pay a commitment fee on the amount of unused revolving commitments at a rate, based on its consolidated total leverage ratio, which ranges from 0.125 percent to 0.200 percent of unused revolving commitments. At December 31, 2019, the commitment fee on the amount of unused revolving credit was 0.175 percent per annum. The Restated Credit Agreement contains one financial covenant that requires maintenance of a consolidated total leverage ratio with which the Company was in compliance at December 31, 2019. The facilities available under the Restated Credit Agreement are unsecured. The Restated Credit Agreement also contains language providing for the adoption of a LIBOR successor rate consistent with market practice. The Company engaged in regular dialogue with its lenders and derivatives counterparties to keep apprised of the proposed successor rates in each of the jurisdictions in which there might be a need to execute a financial transaction. Although progress has been made by the various working groups, the Company believes it is too early to accurately assess any financial impact of the LIBOR benchmark reform.

At December 31, 2019, the Company had $10.8 million of letters of credit outstanding, which reduces the total available revolving credit under the Restated Credit Agreement.

On January 11, 2019, a standby letter of credit, not to exceed Swedish kronor 2.2 billion, was issued under a new bilateral letter of credit reimbursement agreement ("L/C Agreement") to secure a payment guarantee required by the Swedish Tax Authorities in order to grant a respite from paying the tax reassessment described in Note 16, "Income Taxes." The outstanding amount of the L/C Agreement was equivalent to approximately $237.2 million at December 31, 2019. Outstanding amounts under the L/C Agreement do not reduce the available revolving credit from the Restated Credit Agreement as described above.