Debt

12 Months Ended

Dec. 31, 2019

The following table presents White Mountains’s debt outstanding as of December 31, 2019 and 2018:



	December 31,			Effective	December 31,			Effective
$ in Millions	2019			Rate ⁽¹⁾	2018			Rate ⁽¹⁾
NSM Bank Facility	$	221.3		7.5%	$	180.4		7.4%
Unamortized issuance cost	(3.9		)		(3.8		)
NSM Bank Facility, carrying value	217.4				176.6
Other NSM debt	1.8			3.0%	1.9			2.2%
Kudu Bank Facility	57.0			8.3%	—
Unamortized issuance cost	(3.4		)		—
Kudu Bank Facility, carrying value	53.6				—
MediaAlpha Bank Facility	—				14.3			7.1%
Unamortized issuance cost	—				(.1		)
MediaAlpha Bank Facility, carrying value	—				14.2
Other Operations debt	11.1			8.3%	—
Unamortized issuance cost	(.4		)		—
Other Operations debt, carrying value	10.7				—
Total debt	$	283.5			$	192.7

⁽¹⁾Effective rate considers the effect of the debt issuance costs.

The following table presents a schedule of contractual repayments of White Mountains’s debt as of December 31, 2019:



Millions	December 31, 2019
Due in one year or less	$	2.8
Due in two to three years	7.0
Due in four to five years	226.2
Due after five years	55.2
Total	$	291.2

WTM Bank Facility

White Mountains had a revolving credit facility with a syndicate of lenders administered by Wells Fargo Bank, N.A., which had a total commitment of $425.0 million (the “WTM Bank Facility”). White Mountains terminated the WTM Bank Facility on May 8, 2018. White Mountains recorded $0.3 million and $0.6 million of interest expense on the WTM Bank Facility for the years ended December 31, 2018 and 2017.

NSM Bank Facility

On May 11, 2018, NSM entered into a secured credit facility (the “NSM Bank Facility”) with Ares Capital Corporation in order to refinance NSM’s existing debt and to fund the acquisitions of subsidiaries. The NSM Bank Facility has a total commitment of $234.0 million, which is comprised of term loans of $224.0 million and a revolving credit loan of $10.0 million. The term loans under the NSM Bank Facility mature on May 11, 2024, and the revolving loan under the NSM Bank Facility matures on May 11, 2023. During 2019, NSM repaid $2.0 million on the term loans and $6.5 million on the revolving credit loan. During 2019, NSM borrowed $42.9 million of incremental term loans, which included $20.4 million and $22.5 million for the funding of the acquisitions of Embrace and the Renewal Rights from AIG, respectively, and repaid $2 million of the term loans. Additionally, during 2019, NSM borrowed $6.5 million on the revolving credit loans under the NSM Bank Facility. During the period from May 11, 2018 through December 31, 2018, NSM repaid $0.8 million on the term loans and $2.0 million on the revolving credit loan. As of December 31, 2019, the term loans had an outstanding balance of $221.3 million and the revolving credit loans were undrawn.

Interest on the NSM Bank Facility accrues at a floating interest rate equal to the three-month LIBOR or the Prime Rate, as published by the Wall Street Journal plus, in each case, an applicable margin. The margin over LIBOR may vary between 4.25% and 4.75%, and the margin over the Prime Rate may vary between 3.25% and 3.75%, in each case, depending on the consolidated total leverage ratio of the borrower.

On June 15, 2018, NSM entered into an interest rate swap agreement to hedge its exposure to interest rate risk on $151.0 million of its variable rate term loans. Under the terms of the swap agreement, NSM pays a fixed rate of 2.97% and receives a variable rate, which is reset monthly, based on then-current LIBOR. As of December 31, 2019, the variable rate received by NSM under the swap agreement was 1.71%. As of December 31, 2019, the interest rate, including the effect of the swap, for the outstanding term loans of $148.7 million that are hedged by the swap was 7.47%. The effective interest on the outstanding term loans of $72.6 million that are unhedged was 6.21%. The effective interest rate on the total outstanding term loans under the NSM Bank Facility of $221.3 million was 7.06%, excluding the effect of debt issuance costs. See Note 7 - “Derivatives”.

The NSM Bank Facility is secured by all property of the loan parties and contains various affirmative, negative and financial covenants that White Mountains considers to be customary for such borrowings, including a maximum consolidated total leverage ratio covenant.

Other NSM Debt

NSM also has a secured term loan related to its U.K.-based operations. As of December 31, 2019, the secured term loan had an outstanding balance of $1.8 million and a maturity date of May 11, 2024.

Kudu Bank Facility

On December 23, 2019, Kudu entered into a secured credit facility (the “Kudu Bank Facility”) with Monroe Capital Management Advisors, LLC to provide funding for distributions to unitholders and fund new investments and related transaction expenses. The Kudu Bank Facility has a maximum borrowing capacity of $125.0 million, which is comprised of a revolving credit loan of $5.0 million, an initial term loan of $57.0 million and a delayed-draw term loan of $63.0 million. The term loans and revolving credit loans, under the Kudu Bank Facility, mature in 2025. During 2019, Kudu borrowed $57.0 million in term loans under the Kudu Bank Facility and made no repayments. As of December 31, 2019, the term loans had an outstanding balance of $57.0 million and the revolving credit loan was undrawn.

Interest on the Kudu Bank Facility accrues at a floating interest rate equal to one-month LIBOR plus 1.0% or the Prime Rate plus, in each case, an applicable margin. The margin over LIBOR may vary between 5.50% and 6.25% and the margin over the Base Rate may vary between 4.50% and 5.25%, depending on the consolidated total leverage ratio of the borrower.

The Kudu Bank Facility is secured by all property of the loan parties and contains various affirmative, negative and financial covenants that White Mountains considers to be customary for such borrowings, including a maximum consolidated total leverage ratio covenant.

MediaAlpha Bank Facility

On May 12, 2017, MediaAlpha entered into a secured credit facility (the “MediaAlpha Bank Facility”) with Western Alliance Bank, which had a total commitment of $20.0 million and had a maturity date of May 12, 2020. The MediaAlpha Bank Facility consists of a $18.4 million term loan facility, which had an outstanding balance of $14.3 million as of December 31, 2018, and a revolving loan facility for $10.0 million, which was undrawn as of December 31, 2018. The MediaAlpha Bank Facility replaced MediaAlpha’s previous credit facility with Opus Bank, which had a total commitment of $20.0 million.

During 2018, under the MediaAlpha Bank Facility, MediaAlpha repaid $3.6 million on the term loan and borrowed $3.0 million and repaid $9.0 million on the revolving loan. In 2017, under the MediaAlpha Bank Facility, MediaAlpha borrowed $20.0 million and repaid $2.1 million on the term loan and borrowed $6.0 million on the revolving loan. During 2017, under the previous MediaAlpha Bank Facility, MediaAlpha repaid $12.9 million.

MediaAlpha recorded $1.2 million and $1.0 million of interest expense on the MediaAlpha Bank Facility for the years ended December 31, 2018 and 2017.

Other Operations Debt

As of December 31, 2019, debt in White Mountains’s Other Operations segment consisted of a secured credit facility that had a term loan of $11.3 million, a delayed-draw term loan of $3.0 million and a revolving credit loan commitment of $2.0 million, all with a maturity date of March 12, 2024.

Compliance

As of December 31, 2019, White Mountains was in compliance with all of the covenants under all of its debt facilities.

Interest

Total interest expense incurred by White Mountains for its indebtedness was $17.6 million, $9.5 million and $2.3 million for the periods ended December 31, 2019, 2018 and 2017. Total interest paid by White Mountains for its indebtedness was $16.3 million, $8.8 million, and $1.4 million for the periods ended December 31, 2019, 2018 and 2017.