Note 4 - Long-term Debt

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Debt Disclosure [Text Block]

4. Long-term Debt

As of September 30, 2025 and December 31, 2024, long-term debt consisted of obligations under our Senior Credit Facility, our 5.875% senior notes due 2026 (the “2026 Notes”), our 7.0% senior notes due 2027 (the “2027 Notes”), our 10.5% senior notes due 2029 (the “2029 Notes (1L)”), our 4.75% senior notes due 2030 (the “2030 Notes”), our 5.375% notes due 2031 (the “2031 Notes”), our 9.625% senior notes due 2032 (the “2032 Notes (2L)”) and our 7.25% senior notes due 2033 (the “2033 Notes (1L)”) as follows (in millions):

	September 30,			December 31,
	2025			2024
Long-term debt:
2019 Senior Credit Facility:
2021 Term Loan (1L) (matures December 1, 2028)	$	739		$	1,395
2024 Term Loan (1L) (matures June 4, 2029)		10			498
Senior secured first lien notes:
2029 Notes (1L) (matures July 15, 2029)		1,250			1,250
2033 Notes (1L) (matures August 15, 2033)		775			-
Senior secured second lien notes:
2032 Notes (2L) (matures July 15, 2032)		900			-
Senior unsecured notes:
2026 Notes (matures July 15, 2026)		2			10
2027 Notes (matures May 15, 2027)		-			528
2030 Notes (matures October 15, 2030)		790			790
2031 Notes (matures November 15, 2031)		1,219			1,219
Total outstanding principal, including current portion		5,685			5,690
Unamortized deferred loan costs - Senior Credit Facility		(15	)		(34	)
Unamortized deferred loan costs - 2027 Notes		-			(3	)
Unamortized deferred loan costs - 2029 Notes (1L)		(10	)		(12	)
Unamortized deferred loan costs - 2030 Notes		(7	)		(8	)
Unamortized deferred loan costs - 2031 Notes		(10	)		(12	)
Unamortized deferred loan costs - 2032 Notes (2L)		(17	)		-
Unamortized deferred loan costs - 2033 Notes (1L)		(16	)		-
Less current portion		(2	)		(20	)
Long-term debt, less current portion and deferred financing costs	$	5,608		$	5,601
Revolving Credit Facility:
Revolving Credit Facility commitment	$	750		$	680
Undrawn outstanding letters of credit		(8	)		(6	)
Borrowing availability under Revolving Credit Facility	$	742		$	674

Interest Rate Caps. On February 23, 2023, we entered into two interest rate caps pursuant to an International Swaps and Derivatives Association Master Agreement (the “ISDA Master Agreement”) with two counterparties, Wells Fargo Bank, NA and Truist Bank, respectively. On May 30, 2025 and July 25, 2025, we amended the notional amount of the interest rate caps in order to better match the outstanding amounts of the related outstanding indebtedness. At September 30, 2025 and December 31, 2024, the caps had a combined notional value of approximately $749 million and $1.9 billion, respectively, and mature on December 31, 2025. The interest rate caps protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows on a portion of our variable-rate debt. The interest rate caps are designated as cash flow hedges of our risk of changes in our cash flows attributable to changes in 1-month SOFR on our outstanding variable-rate debt in accordance with ASC 815. We elected to apply the optional expedient in ASC 848, Reference Rate Reform, that enabled us to consider the amended swaps a continuation of the existing contracts. As a result, the transition did not have an impact on our hedge accounting or a material impact to our financial statements.

The interest rate caps, as amended, effectively limit the annual interest charged on our 2021 Term Loan (1L) and our 2024 Term Loan (1L) to a maximum of 1-month Adjusted Term SOFR of 4.96% and 5.047%. We are required to pay aggregate fees in connection with the interest rate caps of approximately $34 million that is due and payable at maturity on December 31, 2025. On the initial designation date, we recognized an asset and corresponding liability for the deferred premium payable equal to $34 million. The asset is amortized into interest expense straight-line over the term of the hedging relationship. At September 30, 2025 and December 31, 2024, the recorded value of the asset was $3 million and $12 million, net of accumulated amortization, respectively. At September 30, 2025 and December 31, 2024, the fair value of the derivative liability was $33 million and $32 million, respectively. We present the deferred premium, the asset, and the fair value of the derivative, net within other accrued expenses in our condensed consolidated balance sheets.

The ISDA Master Agreement, together with its related schedules, contain customary representations, warranties and covenants. The interest rate caps were not entered into for speculative trading purposes. Changes in the fair value of the interest rate caps are reported as a component of other comprehensive income. Actual gains and losses are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and are presented in the same income statement line item as the earnings effect of the hedged transaction. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in the same line of the income statement for the hedged item. We recognized $9 million of amortization expense for the asset during each of the nine months ended September 30, 2025 and 2024, which is included as a component of cash flows from operating activities in our condensed consolidated statements of cash flows. Cash flows received from the counterparties pursuant to the interest rate caps are included as components of cash flows from financing activities in our condensed consolidated statements of cash flows. During the nine-months ended September 30, 2025, we did not receive a refund of interest under the rate caps. During the nine-months ended September 30, 2024, we received $6 million of cash payments from the counterparties that we reclassified as reductions of interest expense from the interest rate caps in our condensed consolidated statements of operations.

For all of our interest bearing obligations, we made interest payments of approximately $331 million and $257 million during the nine-months ended September 30, 2025 and 2024, respectively. During the nine-months ended September 30, 2025 and 2024, we capitalized $2 million and $1 million of interest payments, respectively, related to the Assembly Atlanta project.

Because of their relationship to the interest rate caps, described above, borrowings under the 2021 Term Loan (1L) and 2024 Term Loan (1L) bear interest at the 1-month SOFR rate, plus applicable margin. As of September 30, 2025, the interest rate on the balance outstanding under the 2021 Term Loan (1L) and the 2024 Term Loan (1L) were 7.4% and 9.5%, respectively.

2025 Refinancing Activities.

Revolving Credit Facility. On March 31, 2025, we entered into a fourth amendment (the “Fourth Amendment”) of our Senior Credit Agreement (as defined below). The Fourth Amendment, among other things, increases the aggregate commitments under the Revolving Credit Facility (the “Revolving Credit Facility”) by $20 million, resulting in aggregate commitments under the Revolving Credit Facility of $700 million. Borrowings under the Revolving Credit Facility bear interest, at our option, at either the SOFR rate or the Base Rate, in each case, plus an applicable margin. The costs associated with the amendment were not material.

On July 18, 2025, we entered into a further amendment to the Senior Credit Agreement (the “Fifth Amendment” and as amended, including by the Fifth Amendment, the “Senior Credit Agreement”). The Fifth Amendment, among other things, provided for an increase in the Revolving Credit Facility by $50 million, resulting in aggregate commitments under the Revolving Credit Facility of $750 million and an extension of the term of the commitments under the Revolving Credit Facility to December 1, 2028. The costs incurred in connection with this amendment were not material.

2032 Notes (2L). On July 18, 2025, we issued $900 million in aggregate principal amount of 2032 Notes (2L) pursuant to an indenture, dated as of July 18, 2025, between us, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “2032 Notes (2L) Indenture”). The 2032 Notes (2L) were issued at par. Interest in the 2032 Notes (2L) accrues from July 18, 2025, and is payable semiannually on January 15 and July 15 of each year, beginning on January 15, 2026. The 2032 Notes (2L) mature on July 15, 2032.

The net proceeds from the 2032 Notes (2L), together with $50 million borrowed under our Revolving Credit Facility, were used to (i) redeem all of our outstanding 2027 Notes at par; (ii) to repay $403 million of our 2024 Term Loan (1L) under the Senior Credit Agreement; and (iii) to pay transaction expenses incurred in connection with the offering.

The 2032 Notes (2L) and related guarantees are our senior secured second lien obligations. The 2032 Notes (2L):

● rank pari passu in right of payment to all of our and the guarantors’ existing and future senior, unsubordinated debt (including our Senior Credit Agreement and our 2031 Notes, 2030 Notes, 2029 Notes (1L) and 2026 Notes);

● are senior in right of payment to all of our and the guarantors’ future subordinated debt;

● are effectively subordinated to all of our or the guarantors’ existing and future debt that is secured by a lien on any assets not constituting Collateral (as defined in the 2032 Notes (2L) Indenture) to the extent of the value of such assets (including the assets sold to the Receivables SPV (as defined in the 2032 Notes (2L) Indenture) pursuant to the Receivables Sale Agreement);

● are effectively junior to all our existing and future debt that is secured by a lien that is senior to the 2032 Notes (2L), including the Senior Credit Agreement, the 2029 Notes (1L), and the 2033 Notes (1L), as defined below, to the extent of the value of the Collateral; and

● are effectively senior to all existing and future debt that is either unsecured, including our 2031 Notes, 2030 Notes and 2026 Notes and the guarantees related thereto or secured by a lien that is junior to the lien securing the 2032 Notes (2L) and the related guarantees, in each case to the extent of the value of the Collateral.

2033 Notes (1L). On July 25, 2025, we issued $775 million in aggregate principal amount of 2033 Notes (1L) pursuant to an indenture, dated as of July 25, 2025, between us, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “2033 Notes (1L) Indenture”). The 2033 Notes (1L) were issued at par. Interest in the 2033 Notes (1L) accrues from July 25, 2025, and is payable semiannually, on February 15 and August 15 of each year, beginning on February 15, 2026. The 2033 Notes (1L) mature on August 15, 2033.

The net proceeds from the 2033 Notes (1L) were used to: (i) repay $630 million of our 2021 Term Loan (1L); (ii) $80 million of our 2024 Term Loan (1L); (iii) repay all $50 million then outstanding under our Revolving Credit Facility; and (iv) pay transaction fees and expenses incurred in connection with the offering.

The 2033 Notes (1L) and related guarantees are our senior secured first lien obligations of the Company. The 2033 Notes (1L):

● rank pari passu in right of payment to all of our and the guarantors’ existing and future senior, unsubordinated debt (including our Senior Credit Agreement and our existing notes);

● are senior in right of payment to all of our and the guarantors’ future subordinated debt;

● are effectively subordinated to any of our or the guarantors’ existing and future debt that is secured by a lien on any assets not constituting Collateral (as defined in the 2033 Notes (1L) Indenture) to the extent of the value of such assets (including the assets sold to the Receivables SPV pursuant to the Receivables Sale Agreement);

● rank pari passu in right of security with all of our existing and future debt that is secured by a first priority lien on the Collateral, including our Senior Credit Agreement and the 2029 Notes (1L); and

● are effectively senior to all existing and future debt that is either unsecured, including our 2031 Notes, 2030 Notes and 2026 Notes, or secured by a lien that is junior to the lien securing the 2033 Notes (1L) and the related guarantees, including the 2032 Notes (2L), in each case to the extent of the value of the Collateral.

As a result of all of these refinancing transactions, we recorded a loss on early extinguishment of debt of $7 million the third quarter of 2025.

As of September 30, 2025, the aggregate minimum principal maturities of our long term debt for the remainder of 2025 and the succeeding 5 years were as follows (in millions):

	Minimum Principal Maturities
Year	Senior Credit Facility		2026 Notes		2029 Notes (1L)		2030 Notes		2031 Notes		2032 Notes (2L)		2033 Notes (1L)		Total
Remainder of 2025	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
2026		-		2		-		-		-		-		-		2
2027		-		-		-		-		-		-		-		-
2028		739		-		-		-		-		-		-		739
2029		10		-		1,250		-		-		-		-		1,260
2030		-		-		-		790		-		-		-		790
Thereafter		-		-		-		-		1,219		900		775		2,894
Total	$	749	$	2	$	1,250	$	790	$	1,219	$	900	$	775	$	5,685

As of September 30, 2025, there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or to the guarantor subsidiaries. The Senior Credit Facility contains affirmative and restrictive covenants with which we must comply. The 2026 Notes, the 2029 Notes (1L), the 2030 Notes, the 2031 Notes, the 2032 Notes (2L) and the 2033 Notes (1L) also include covenants with which we must comply. As of September 30, 2025 and December 31, 2024, we were in compliance with all required covenants under all our debt obligations.