Debt and Interest Costs

12 Months Ended

Dec. 31, 2022

Debt and Interest Costs

Debt and Interest Costs

15. Debt and Interest Costs

Long-term debt and interest rates in effect consisted of the following:

	December 31,
($ in millions)	2022		2021
Senior Notes
4.00% due November 2023	$	1,000	$	1,000
4.375%, euro denominated, due December 2023		—		796
0.875%, euro denominated, due March 2024		803		853
5.25% due July 2025		1,000		1,000
4.875% due March 2026		750		750
1.50%, euro denominated, due March 2027		589		625
6.875% due March 2028		750		—
2.875% due August 2030		1,300		1,300
3.125% due September 2031		850		850
Senior Credit Facility (at variable rates)
Term A loan due March 2024 (1.35% - 2021)		—		593
U.S. dollar revolver due June 2027 (5.64% - 2022)		200		—
Term A loan due June 2027 (5.44% - 2022)		1,350		—
Finance lease obligations		12		14
Other (including debt issuance costs)		(61)		(56)
		8,543		7,725
Less: Current portion		(1,003)		(3)
	$	7,540	$	7,722

In the second quarter of 2022, the company completed the closing of its new revolving and term loan senior secured credit facilities that refinanced its existing senior secured credit facilities entered into in 2019. The company’s senior credit facilities include long-term multi-currency revolving facilities that mature in June 2027, which provide the company with up to the U.S. dollar equivalent of $1.75 billion. At December 31, 2022, $1.49 billion was available under these revolving credit facilities. In addition to these facilities, the company had $293 million of committed short-term loans outstanding. The company also had approximately $990 million of short-term uncommitted credit facilities available at December 31, 2022, of which $112 million was outstanding and due on demand. At December 31, 2021, the company had $12 million outstanding under short-term uncommitted credit facilities. The weighted average interest rate of the outstanding short-term facilities was 6.71 percent at December 31, 2022, and 4.92 percent at December 31, 2021.

In November 2022, Ball issued $750 million of 6.875% senior notes due in 2028, and in December the company redeemed the outstanding euro denominated 4.375% senior notes due in 2023 in the amount of $738 million.

The fair value of Ball’s long-term debt was estimated to be $7.99 billion and $8.03 billion at December 31, 2022 and 2021, respectively, compared to its carrying value of $8.54 billion and $7.73 billion in 2022 and 2021, respectively. The fair value reflects the market rates at each period end for debt with credit ratings similar to the company’s ratings and is classified as Level 2 within the fair value hierarchy. Rates currently available to the company for loans with similar terms and maturities are used to estimate the fair value of long-term debt, based on discounted cash flows.

Long-term debt obligations outstanding at December 31, 2022, have maturities (excluding unamortized debt issuance costs of $66 million) of $1.01 billion, $807 million, $1.00 billion, $752 million and $2.14 billion in the years ending 2023 through 2027, respectively, and $2.90 billion thereafter.

Letters of credit outstanding at December 31, 2022 and 2021, were $59 million and $62 million, respectively.

Total interest expense was $330 million, $283 million and $316 million, which included cash interest payments of $312 million, $276 million and $308 million, net of capitalized interest of $10 million, $17 million and $9 million and noncash financing fees of $16 million, $13 milllion and $15 million in 2022, 2021 and 2020, respectively.

In 2020, new guidance was issued related to global reference rates reform. Ball is continually evaluating the impact transitioning its LIBOR-based interest rate loan agreements to SOFR-based interest rate agreements will have on its consolidated financial statements. Based on the company’s most current understanding, the LIBOR to SOFR transition is not expected to have a material impact on its financial condition, results of operations or cash flows.

The company’s senior notes and senior credit facilities are guaranteed on a full, unconditional and joint and several basis by certain of its material subsidiaries. Each of the guarantor subsidiaries is 100 percent owned by Ball Corporation. These guarantees are required in support of these notes and credit facilities, are coterminous with the terms of the respective note indentures and would require performance upon certain events of default referenced in the respective guarantees. Note 23 provides further details about the company’s debt guarantees of the company’s senior notes and the subsidiaries that guarantee the notes (the obligor group).

The U.S. note agreements and bank credit agreement contain certain restrictions relating to dividend payments, share repurchases, investments, financial ratios, guarantees and the incurrence of additional indebtedness. The company’s most restrictive debt covenant requires it to maintain a leverage ratio (as defined) of no greater than 5.0 times, which will change to 4.5 times as of September 30, 2025. Ball was in compliance with the leverage ratio requirement at December 31, 2022 and 2021.