Debt and Capital Lease Obligations (Notes) | 3 Months Ended |
Mar. 31, 2015 |
Debt Disclosure [Abstract] | |
Debt and Capital Lease Obligations | Debt and Capital Lease Obligations |
Debt and capital lease obligations consist of: (i) an accounts receivable securitization facility due 2016 (the “A/R Facility”); (ii) a senior secured credit facility, consisting of term loans denominated in euros and U.S. dollars and a multi-currency revolving loan facility (collectively, the “Senior Credit Facility”); (iii) 7.25% unsecured senior notes due 2017 (the “7.25% Senior Notes”); (iv) 4.625% unsecured senior notes due 2022 (the “4.625% Senior Notes”); (v) capital lease obligations; and (vi) other debt. |
All of our debt and capital lease obligations are that of our wholly-owned subsidiary, VWR Funding. Certain of those debt instruments limit the ability of VWR Funding to make payments to VWR Corporation. Any disclosures about debt and capital lease obligations that refer to “we,” “us,” and “our” apply only to VWR Funding unless otherwise noted. |
The following table presents the components of debt and capital lease obligations, interest rate terms and weighted-average interest rates (dollars in millions): |
|
| | | | | | | | | | | | |
| March 31, 2015 | | December 31, |
| Interest Terms | | Rate | | Amount | | 2014 |
A/R Facility | LIBOR plus 1.50% | | 1.68 | % | | $ | — | | | $ | 73 | |
|
Senior Credit Facility: | | | | | | | |
Euro-denominated term loans | EURIBOR plus 3.50% | | 3.49 | % | | 607.4 | | | 686.7 | |
|
U.S. dollar-denominated term loans | LIBOR plus 3.25% | | 3.43 | % | | 149.9 | | | 581.4 | |
|
Multi-currency revolving loan facility | Various rates | | 5.25 | % | | 2 | | | — | |
|
7.25% Senior Notes | Fixed rate | | 7.25 | % | | 750 | | | 750 | |
|
4.625% Senior Notes, net of discount of $4.1 | Fixed rate | | 4.63 | % | | 537 | | | — | |
|
Capital lease obligations | 14.2 | | | 15.9 | |
|
Other debt | 2.8 | | | 4.9 | |
|
Debt and capital lease obligations | $ | 2,063.30 | | | $ | 2,111.90 | |
|
| | | |
Current portion of debt and capital lease obligations | $ | 21.1 | | | $ | 95.3 | |
|
Debt and capital lease obligations, net of current portion | 2,042.20 | | | 2,016.60 | |
|
Debt and capital lease obligations | $ | 2,063.30 | | | $ | 2,111.90 | |
|
The following summarizes the priority of our debt instruments. Borrowings under the A/R Facility are collateralized by the trade accounts receivable of certain of our domestic wholly-owned subsidiaries. Those receivables are not available to satisfy the claims of other creditors. Borrowings under the Senior Credit Facility are secured by substantially all of our other assets and rank higher than the remainder of our debt. |
A/R Facility |
At March 31, 2015, we had $145.3 million of available borrowing capacity under the A/R Facility. Available borrowing capacity was calculated as: (i) the lesser of (a) the $175.0 million maximum amount of the facility and (b) a borrowing base of $156.6 million, calculated as a percentage of eligible trade accounts receivable; less (ii) undrawn letters of credit outstanding of $11.3 million, with no borrowings outstanding. |
Using a portion of the net proceeds from the issuance of the 4.625% Senior Notes (see below), we repaid all outstanding borrowings under the A/R Facility during the first quarter of 2015. On April 30, 2015, we used availability under our A/R Facility to borrow $125.0 million, which we used to repay U.S. dollar-denominated term loans. |
Senior Credit Facility |
At March 31, 2015, we had $234.3 million of available borrowing capacity under our multi-currency revolving loan facility. Available borrowing capacity was calculated as: (i) the maximum borrowing capacity of $241.3 million, less (ii) undrawn letters of credit outstanding of $5.0 million and (iii) outstanding borrowings of $2.0 million. |
Using a portion of the net proceeds from the issuance of the 4.625% Senior Notes (see below), we repaid $431.5 million of U.S. dollar-denominated term loans during the first quarter of 2015. As a result, we recognized a loss on extinguishment of debt of $1.8 million, representing the write-off of a portion of the unamortized deferred financing costs related to the term loans that were repaid. |
On April 30, 2015, we used availability under our A/R Facility to repay an additional $125.0 million of U.S. dollar-denominated term loans. |
4.625% Senior Notes |
On March 25, 2015, we completed the private sale of €503.8 million of 4.625% Senior Notes. The notes were offered at an original issue discount of €3.8 million. We also paid debt issuance costs of $4.5 million during the three months ended March 31, 2015 and accrued an additional $1.1 million of debt issuance costs at March 31, 2015. The original issue discount and the debt issuance costs were deferred and are being recognized as interest expense through the maturity of the debt. |
The 4.625% Senior Notes will mature on April 15, 2022. Interest on the notes is payable in arrears on April 15 and October 15 of each year commencing October 15, 2015 at a rate of 4.625% per annum. |
Redemption |
We may, at our option, redeem some or all of the 4.625% Senior Notes prior to April 15, 2018 at a price equal to the present value of: (i) the redemption price on April 15, 2018 plus (ii) all remaining interest payments through April 15, 2018. Beginning on April 15, 2018, 2019 and 2020, the redemption price changes to 102.3125%, 101.1563% and 100%, respectively, of the principal amount of the notes to be redeemed. In addition, at any time prior to April 15, 2018, on one or more occasions, we may redeem up to 35% of the aggregate principal amount of the notes with the net proceeds of one or more equity offerings, as described in the indenture, at a redemption price equal to 104.625% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. If we experience certain change of control events, holders of the notes may require us to repurchase all or part of their notes at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date. |
Guarantees |
The obligations under the 4.625% Senior Notes are guaranteed, jointly and severally and fully and unconditionally, on a senior basis by each of our wholly-owned U.S. subsidiaries other than our U.S. foreign subsidiary holding companies (the “Subsidiary Guarantors”). The Subsidiary Guarantors’ obligations under the guarantees of the Senior Notes are not secured by any of our assets, VWR Funding’s assets or the Subsidiary Guarantors’ assets. |
Covenants |
The indenture governing the 4.625% Senior Notes contains a number of customary affirmative and negative covenants. As of March 31, 2015, we were in compliance with the covenants under the indenture. |
The indenture governing the 4.625% Senior Notes restricts VWR Funding’s ability to make payments to VWR Corporation, including for the purpose of paying dividends on capital stock. Under those restrictions, lifetime payments to VWR Corporation cannot exceed the sum of (i) $100.0 million and (ii) an additional amount equal to 50% of VWR Funding’s consolidated net income since January 1, 2015 and any amounts it has received from sales of equity or capital contributions since March 25, 2015 that are not used for other restricted payments, provided that there is no default under the indenture and that VWR Funding meets a fixed charge coverage ratio after giving effect to any such restricted payment. |