Debt | 3 Months Ended |
Mar. 31, 2014 |
Debt Disclosure [Abstract] | ' |
Debt | ' |
Debt |
Debt outstanding consisted of the following: |
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(in millions) | | 31-Mar-14 | | 31-Dec-13 |
Senior secured term loan, payable in quarterly installments through February 10, 2019, including variable interest (4.25% at March 31, 2014) at LIBOR or alternate base rate, plus applicable margin, including original discount of $0.1 million and $0.2 million at March 31, 2014 and December 31, 2013, respectively | | $ | 1,120.60 | | | $ | 1,123.50 | |
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Senior secured revolving line of credit, due on February 10, 2017, variable interest (4.63% weighted average at March 31, 2014) at LIBOR or alternate base rate, plus applicable margin | | 28.5 | | | — | |
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11.375% notes - Senior notes, principal due June 15, 2018, semi-annual interest payments, 11.375% fixed interest per annum, including unamortized fair value adjustment of $91.4 million and $95.9 million as of March 31, 2014 and December 31, 2013, respectively | | 736.4 | | | 740.9 | |
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9.625% notes - Senior unsecured PIK toggle notes, principal due June 15, 2018, semi-annual interest payments, 9.625% fixed interest per annum | | 600 | | | 600 | |
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8.125% notes - Senior unsecured PIK toggle notes, principal due June 15, 2018, semi-annual interest payments, 8.125% fixed interest per annum, including original issuance discount of $1.6 million and $1.7 million at March 31, 2014 and December 31, 2013, respectively | | 398.4 | | | 398.3 | |
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Capital lease obligations | | 3.3 | | | 4.2 | |
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Other notes payable | | 4.3 | | | — | |
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Total debt | | $ | 2,891.50 | | | $ | 2,866.90 | |
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Less short-term debt and current portion of long-term debt | | (45.7 | ) | | (13.8 | ) |
Total long-term debt | | $ | 2,845.80 | | | $ | 2,853.10 | |
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Interest expense consisted of the following: |
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(in millions) | | Three Months | | Three Months |
Ended | Ended |
March 31, | March 31, |
2014 | 2013 |
Senior secured term loan | | $ | 12.6 | | | $ | 11.7 | |
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Senior secured revolving line of credit | | 0.1 | | | — | |
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11.375% notes | | 13.8 | | | 14.2 | |
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9.625% notes | | 15.7 | | | 15.5 | |
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8.125 % notes | | 8.5 | | | 8.5 | |
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Other | | 0.1 | | | (0.1 | ) |
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Total interest | | $ | 50.8 | | | $ | 49.8 | |
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Senior Secured Credit Facility |
On June 15, 2010, the Company’s subsidiaries, TransUnion Corp and Trans Union LLC, entered into a senior secured credit facility ("credit facility") with various lenders. The credit facility consists of a senior secured term loan ("term loan") and a senior secured revolving line of credit ("revolving line of credit"). The credit facility was amended and restated on April 9, 2014 as discussed in Note 12, "Subsequent Event." |
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During the first quarter of 2014, the Company borrowed $28.5 million on its revolving line of credit to partially fund the purchase of additional equity in CIBIL as discussed in Note 5, "Other Assets," and Note 6, "Investments in Affiliated Companies," and to pay certain administrative costs. |
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On April 30, 2012, we entered into swap agreements that effectively fixed the interest payments on a portion of the term loan at 2.033%, plus the applicable margin, beginning March 28, 2013. Under the swap agreements, which we have designated as cash flow hedges, we pay a fixed rate of interest of 2.033% and receive a variable rate of interest equal to the greater of 1.50% or the three month LIBOR. The net amount to be paid or received is recorded as an adjustment to interest expense. The total fair value of the swap instruments as of March 31, 2014, was a liability of $1.2 million and was included in other liabilities on our consolidated balance sheet. The net of tax unrealized loss on the swap instruments as of March 31, 2014, of $0.7 million was included in accumulated other comprehensive income (loss). For the three months ended March 31, 2014, there was no ineffectiveness recorded in the statement of income. In connection with the April 9, 2014, amendment and restatement of the senior secured credit facility, the Company does not expect the current hedge to be highly effective and therefore it will no longer qualify for hedge accounting. Accordingly, the $0.7 million net of tax unrealized loss on the swap recorded in accumulated other comprehensive income will be amortized straight line from April 9, 2014, through December 29, 2017, the end of the swap period. |
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11.375% Notes |
Trans Union LLC and its wholly-owned subsidiary TransUnion Financing Corporation issued $645.0 million principal amount of 11.375% senior unsecured notes ("11.375% notes") due June 15, 2018, in a private placement to certain investors. Pursuant to an exchange offer completed in April 2011, these notes were subsequently registered with the SEC. As a result of the 2012 Change in Control Transaction as defined in our Annual Report on Form 10-K for the year ended December 31, 2013, a purchase accounting fair value adjustment increase of $124.2 million was allocated to the 11.375% notes. For further discussion related to the 11.375% notes, see Note 12, Subsequent Events. |
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9.625% Notes |
On March 21, 2012, the Company issued $600.0 million principal amount of 9.625%/10.375% senior unsecured PIK toggle notes (“9.625% notes”) due June 15, 2018, in a private placement to certain investors. Pursuant to an exchange offer completed in October 2012, these notes were subsequently registered with the SEC. The Company is required to pay interest on the 9.625% notes in cash unless certain conditions described in the indenture governing the notes are satisfied, in which case the Company will be entitled to pay interest for such period by increasing the principal amount of the notes or by issuing new notes (such increase being referred to as “PIK,” or paid-in-kind interest) to the extent described in the indenture. |
The indenture governing the 9.625% notes contains nonfinancial covenants that include restrictions on our ability to pay dividends or distributions, repurchase equity, prepay junior debt, make certain investments, incur additional debt, issue certain stock, incur liens on property, merge, consolidate or sell certain assets, enter into transactions with affiliates, and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments to TransUnion Holding. We are in compliance with all covenants under the indenture. |
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8.125% Notes |
On November 1, 2012, the Company issued $400.0 million principal amount of 8.125%/8.875% senior unsecured PIK toggle notes (“8.125% notes”) due June 15, 2018, at an offering price of 99.5% in a private placement to certain investors. Pursuant to an exchange offer completed in August 2013, these notes were subsequently registered with the SEC. The Company is required to pay interest on the 8.125% notes in cash unless certain conditions described in the indenture governing the notes are satisfied, in which case the Company will be entitled to pay interest for such period by increasing the principal amount of the notes or by issuing new notes to the extent described in the indenture. |
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The indenture governing the 8.125% notes and the nonfinancial covenants are substantially identical to those governing the 9.625% notes. We are in compliance with all covenants under the indenture. |
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Fair Value of Debt |
The estimated fair values of our 9.625%, 8.125% and 11.375% notes as of March 31, 2014, were $638.3 million, $419.5 million and $695.0 million, respectively, compared to book values of $600.0 million, $398.4 million and $736.4 million, respectively. The fair value of these fixed-rate notes, as determined under Level 2 of the fair-value hierarchy, is measured using quoted market prices of these publicly traded securities. The book value of our variable-rate debt approximates its fair value. The estimated fair value of our debt may not represent the actual settlement value due to redemption premiums and prepayment penalties that we may incur in connection with extinguishing our debt before its stated maturity. |