Debt

12 Months Ended

Dec. 28, 2019

Our total debt as of December 28, 2019 and December 29, 2018 was as follows:



	December 28, 2019						December 29, 2018
(in millions of U.S. dollars)	Principal		Unamortized Debt Costs		Net		Principal		Unamortized Debt Costs		Net
5.500% senior notes due in 2024	499.3		5.8		493.5		513.1		7.2		505.9
5.500% senior notes due in 2025	750.0		8.2		741.8		750.0		9.8		740.2
ABL facility	92.0		—		92.0		81.1		—		81.1
Short-term borrowings	0.4		—		0.4		7.9		—		7.9
Finance leases	30.9		—		30.9		5.0		—		5.0
Other debt financing	1.4		—		1.4		2.1		—		2.1
Total debt	1,374.0		14.0		1,360.0		1,359.2		17.0		1,342.2
Less: Short-term borrowings and current debt:
ABL facility	92.0		—		92.0		81.1		—		81.1
Short-term borrowings	0.4		—		0.4		7.9		—		7.9
Finance leases - current maturities	6.3		—		6.3		1.9		—		1.9
Other debt financing	1.1		—		1.1		1.1		—		1.1
Total current debt	99.8		—		99.8		92.0		—		92.0
Total long-term debt	$	1,274.2	$	14.0	$	1,260.2	$	1,267.2	$	17.0	$	1,250.2

The long-term debt payments (which include current maturities of long-term debt) required in each of the next five years and thereafter are as follows:



(in millions of U.S. dollars)	Long-Term Debt (including current)
2020	$	100.0
2021	5.6
2022	5.0
2023	4.8
2024	503.4
Thereafter	755.2
	$	1,374.0

Asset-Based Lending Facility

In March 2008, we entered into a credit agreement with JPMorgan Chase Bank N.A. as Administrative Agent that created an ABL facility to provide financing for our operations. We have amended and refinanced the ABL facility from time to time and incurred related financing fees, $4.3 million of which have been capitalized and deferred and are being amortized using the straight-line method over the duration of the amended ABL facility.

As of December 28, 2019, our total availability under the ABL facility was $216.4 million, which was based on our borrowing base (accounts receivables, inventory, and fixed assets as of the December 2019 month-end under the terms of the credit agreement governing the ABL facility). As of December 28, 2019, we had $92.0 million of outstanding borrowings under the ABL facility and $47.4 million of letters of credit. As a result, our excess availability under the ABL facility was $77.0 million as of December 28, 2019. The commitment fee was 0.250% per annum of the unused commitment, which was $110.6 million as of December 28, 2019. The weighted average effective interest rate at December 28, 2019 on our outstanding borrowings was 3.40%. The effective interest rates are based on our aggregate availability.

In January 2018, we amended and restated the Amended and Restated Credit Agreement. The ABL facility, as amended and restated, provides us with financing in the United States, Canada, the United Kingdom and the Netherlands. Cott and its subsidiaries, Cott Holdings Inc., DSS, S&D, Aimia and Aquaterra, are borrowers under the ABL facility. The ABL facility is a revolving facility of up to $250.0 million with a maturity date of August 3, 2021. JPMorgan Chase Bank, N.A. serves as administrative agent and administrative collateral agent and JPMorgan Chase Bank, N.A., London Branch serves as U.K. security trustee. Availability under the ABL facility is dependent on a borrowing base calculated as a percentage of the value of eligible inventory, accounts receivable and property, plant and equipment in the manner set forth in the credit agreement. Subject to certain conditions, the ABL facility may be increased up to an additional $100.0 million at our option if lenders agree to increase their commitments. The debt under the ABL facility is guaranteed by most of our U.S., Canadian and U.K. subsidiaries, certain of our Dutch subsidiaries and certain other subsidiaries. As disclosed previously on a Current Report on Form 8-K dated February 7, 2020 (the “ABL Amendment 8-K”), on February 7, 2020, the ABL facility was amended to, among other things, modify certain negative covenants of the ABL facility to facilitate the sale of S&D (see Note 24 to the Consolidated Financial Statements) and to limit the conditions to be met for the acquisition of Primo Water Corporation (see Note 24 to the Consolidated Financial Statements) to be permitted under the ABL facility (the “ABL Amendment”). This reference to the ABL Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1 to the ABL Amendment 8-K.

5.500% Senior Notes due in 2025

In March 2017, we issued $750.0 million of our 2025 Notes to qualified purchasers in a private placement offering under Rule 144A under the Securities Act, and outside the United States to non-U.S. purchasers pursuant to Regulation S under the Securities Act and other applicable laws. The 2025 Notes were issued by our wholly-owned subsidiary Cott Holdings Inc., and most of our U.S., Canadian, U.K. and Dutch subsidiaries guarantee the 2025 Notes. The 2025 Notes will mature on April 1, 2025 and interest is payable semi-annually on April 1st and October 1st of each year commencing on October 1, 2017. The proceeds of the 2025 Notes were used to redeem in full the 2020 Notes, redeem $100.0 million aggregate principal amount of our DSS Notes and to pay related fees and expenses.

We incurred $11.7 million of financing fees in connection with the issuance of the 2025 Notes. The financing fees are being amortized using the effective interest method over a period of eight years, which represents the term to maturity of the 2025 Notes.

5.500% Senior Notes due in 2024

In June 2016, we issued €450.0 million (U.S. $499.3 million at the exchange rate in effect on December 28, 2019) of our 2024 Notes to qualified purchasers in a private placement offering under Rule 144A and Regulation S under the Securities Act and other applicable laws. The 2024 Notes were initially issued by our wholly-owned subsidiary Cott Finance Corporation. In connection with the closing of the acquisition of Eden, we assumed all of the obligations of Cott Finance Corporation under the 2024 Notes, and most of our U.S., Canadian, U.K. and Dutch subsidiaries that are currently obligors under the 2022 Notes and the 2020 Notes entered into a supplemental indenture to guarantee the 2024 Notes. The 2024 Notes will mature on July 1, 2024 and interest is payable semi-annually on January 1st and July 1st of each year commencing on January 1, 2017. The proceeds of the 2024 Notes were used to fund a portion of the purchase price of the acquisition of Eden and to pay related fees and expenses.

We incurred approximately $11.3 million of financing fees for the issuance of the 2024 Notes and $11.0 million of bridge financing commitment fees and professional fees in connection with the acquisition of Eden. The financing fees are being amortized using the effective interest method over a period of eight years, which represents the term to maturity of the 2024 Notes. The bridge financing commitment fees and professional fees were expensed as incurred.

Covenant Compliance

Indentures governing our outstanding notes

Under the indentures governing our outstanding notes, we are subject to a number of covenants, including covenants that limit our and certain of our subsidiaries’ ability, subject to certain exceptions and qualifications, to (i) pay dividends or make distributions, repurchase equity securities, prepay subordinated debt or make certain investments, (ii) incur additional debt or issue certain disqualified stock or preferred stock, (iii) create or incur liens on assets securing indebtedness, (iv) merge or consolidate with another company or sell all or substantially all of our assets taken as a whole, (v) enter into transactions with affiliates and (vi) sell assets. The covenants are substantially similar across the series of notes. As of December 28, 2019, we were in compliance with all of the covenants under each series of notes. There have been no amendments to any covenants of our outstanding notes since the date of their issuance or assumption, as applicable.

ABL Facility

Under the credit agreement governing the ABL facility, Cott and its restricted subsidiaries are subject to a number of business and financial covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. The minimum fixed charge coverage ratio of 1.0 to 1.0 is effective if and when there exists an event of default or aggregate availability is less than the greater of 10% of the Line Cap under the ABL facility or $22.5 million (which would be reduced to $13.5 million upon the sale of our S&D business, per the ABL Amendment). Line Cap is defined as an amount equal to the lesser of the lenders’ commitments or the borrowing base at such time. If an event of default exists or the excess availability is less than the greater of 10% of the aggregate availability under the ABL facility or $22.5 million (which would be reduced to $13.5 million upon the sale of our S&D business, per the ABL Amendment), the lenders will take dominion over the cash and will apply excess cash to reduce amounts owing under the facility. We were in compliance with all of the applicable covenants under the ABL facility as of December 28, 2019.