Debt

3 Months Ended

Mar. 30, 2024

The following table sets forth the components of long-term debt:


			March 30, 2024								December 31, 2023
	Effective Interest Rate		Principal Outstanding		Unamortized Fair Value Adjustment (1)		Unamortized Discount and Issuance Costs		Carrying Amount		Principal Outstanding		Unamortized Fair Value Adjustment(1)		Unamortized Discount and Issuance Costs		Carrying Amount
Term loan facility, due April 2028	8.57	%	$	2,522,000	$	(277,774)	$	—	$	2,244,226	$	2,528,500	$	(292,442)	$	—	$	2,236,058
Term loan facility, due August 2028	9.69	%	296,250		—		(17,540)		278,710		297,000		—		(18,370)		278,630
6.125% senior notes, due January 2029	13.73	%	318,699		(84,043)		—		234,656		318,699		(87,050)		—		231,649
8.750% senior secured notes, due August 2028	10.61	%	710,000		—		(42,671)		667,329		710,000		—		(44,787)		665,213
Total long-term debt			$	3,846,949	$	(361,817)	$	(60,211)	$	3,424,921	$	3,854,199	$	(379,492)	$	(63,157)	$	3,411,550
Reflected as:
Current liabilities - Current maturities of long-term debt									$	29,000							$	29,000
Non-current liabilities - Long-term debt									3,395,921								3,382,550
Total long-term debt									$	3,424,921							$	3,411,550
Fair value - Senior notes - Level 1									$	1,014,670							$	988,702
Fair value - Term loans - Level 2(2)									2,810,824								2,835,596
Total fair value									$	3,825,494							$	3,824,298

(1) In July 2022, as a result of the pushdown accounting related to the Merger, the carrying values of the term loan facility due April 2028 and the 6.125% senior notes were adjusted to fair value.

(2) Term loans are classified within Level 2 of the fair value hierarchy because they are valued based on quoted market prices.

Repurchase of 6.125% Senior Notes due January 2029

The Company repurchased an aggregate principal amount of $21.7 million of 6.125% Senior Notes for $15.5 million in cash during the three months ended April 1, 2023. The repurchases, which resulted in a write-off of associated unamortized debt discount and deferred financing costs, resulted in a loss of $0.6 million, recognized as a loss on extinguishment in the debt in the Condensed Consolidated Statements of Loss for the three months ended April 1, 2023. There were no repurchases of the Company’s 6.125% Senior Notes during the three months ended March 30, 2024.

Short-Term Borrowings

The following table sets forth the Company’s availability under its revolving credit facilities:


	March 30, 2024						December 31, 2023
	Available		Borrowings		Letters of Credit and Priority Payables		Available		Borrowings		Letters of Credit and Priority Payables
Asset-based lending facility, due July 2027(1)	$	850,000	$	5,000	$	42,000	$	850,000	$	—	$	47,000
Cash flow revolver(2)	92,000		—		—		92,000		—		—
First-in-last-out tranche asset-based lending facility, due July 2027(1)	95,000		95,000		—		95,000		—		—
Total	$	1,037,000	$	100,000	$	42,000	$	1,037,000	$	—	$	47,000

(1) As of March 30, 2024, borrowings on revolving credit facilities are included within short-term borrowings and classified as a current liability on the Condensed Consolidated Balance Sheets.

(2) Cash flow revolver commitment of $92.0 million will mature in April 2026.

Covenant Compliance

The ABL Credit Agreement includes a minimum fixed charge coverage ratio of 1.00:1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the ABL Facility and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. The Cash Flow Credit Agreement includes a financial covenant set at a maximum secured leverage ratio of 7.75:1.00, which will apply if the outstanding amount of loans and drawings under letters of credit which have not then been reimbursed exceeds a specified threshold at the end of any fiscal quarter.

The Company’s debt agreements contain a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. The Company is in compliance with all of its covenants as of March 30, 2024.

Interest Rate Swaps

The Company uses certain interest rate swaps to manage a portion of the interest rate risk on its term loans. The following table sets forth the terms of the Company’s interest rate swap agreements:


	April 2021 Swaps
Notional amount	$	1,500,000
Forecasted term loan interest payments being hedged	1-month SOFR
Fixed rate paid	2.0038%
Origination date	April 17, 2023
Maturity date	April 15, 2026
Fair value at March 30, 2024 - Other assets, net	$	72,540
Fair value at December 31, 2023 - Other assets, net	$	64,704
Level in fair value hierarchy(1)	Level 2

(1)Interest rate swaps are based on cash flow hedge contracts that have fixed rate structures and are measured against market based SOFR yield curves. These interest rate swaps are classified within Level 2 of the fair value hierarchy because they are valued using alternative pricing sources or models that utilized market observable inputs, including current and forward interest rates.