Debt |
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Sep. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt |
Debt Substantially all of the Company’s debt is carried at outstanding principal balance, less debt issuance costs and any
unamortized discount. The following table is a summary of the Company’s outstanding debt:
Term Loan
The original principal of the Term Loan was $1,650.0 million. As a result of the Seventh Amendment, as defined and
described below, the principal was increased to $1,700.0 million. As of September 30, 2024, $1,700.0 million of the
principal was outstanding, $6.2 million of interest was accrued, and the related unamortized deferred issuance costs were
$28.8 million. As of December 31, 2023, $1,596.4 million of the principal was outstanding, $1.1 million of interest was
accrued, and the related unamortized deferred issuance costs were $32.8 million.
On January 19, 2024, the Company entered into the fifth amendment (the “Fifth Amendment”) to the Credit Agreement. As
a result of the Fifth Amendment, the applicable interest rate of the Term Loan was reduced from Adjusted Term SOFR +
3.00% to Adjusted Term SOFR + 2.75% and no longer contains a credit spread adjustment. All other material provisions
remain unchanged. The portion of the debt related to the lenders that opted out of the repricing was considered
extinguished and their portion of the legacy debt issuance costs of $0.4 million was written off during the nine months
ended September 30, 2024, which was recognized in Interest expense, net on the Consolidated Statements of Income
(Loss). Additionally, the Company incurred third-party fees related to the repricing of $1.9 million for the nine months
ended September 30, 2024, which were recognized in Other non-operating loss on the Consolidated Statements of Income
(Loss).
On September 13, 2024, the Company entered into the seventh amendment (the “Seventh Amendment”) to the Credit
Agreement. As a result of the Seventh Amendment, the principal of the Term Loan was increased to $1,700.0 million, the
applicable interest rate of the Term Loan was reduced from Adjusted Term SOFR + 2.75% to Adjusted Term SOFR +
2.25%, the 0.75% floor on Adjusted Term SOFR was reduced to 0.00%, and the maturity date was extended to
September 13, 2031. Incremental debt issuance costs of $11.1 million were incurred and will be amortized over the
extended term of the loan. The portion of the debt related to the lenders that opted out of the Seventh Amendment was
considered extinguished and their portion of the legacy debt issuance costs of $8.3 million was written off during the three
and nine months ended September 30, 2024, which was recognized in Interest expense, net on the Consolidated Statements
of Income (Loss). Additionally, the Company incurred third-party fees related to the Seventh Amendment of $16.2 million
for the three and nine months ended September 30, 2024, which were recognized in Other non-operating loss on the
Consolidated Statements of Income (Loss).
Revolving Credit Facility
On July 30, 2024, the Company entered into the sixth amendment (the “Sixth Amendment”) to the Credit Agreement,
which provided for an increase in the borrowing capacity of the Revolving Credit Facility from $600.0 million to $1,400.0
million. The Sixth Amendment also extended the maturity date of the Revolving Credit Facility to July 30, 2029, and
reduced the applicable interest rate from Adjusted Term SOFR + up to 3.00% to Adjusted Term SOFR + up to 2.50%.
Incremental debt issuance costs of $7.9 million were incurred and will be amortized over the extended term of the facility.
The portion of the debt related to the lender that opted out of the Sixth Amendment was considered extinguished and its
portion of the legacy debt issuance costs of $0.1 million was written off during the three and nine months ended
September 30, 2024, which was recognized in Interest expense, net on the Consolidated Statements of Income (Loss).
The Revolving Credit Facility had a borrowing capacity of $1,400.0 million and $600.0 million as of September 30, 2024
and December 31, 2023, respectively. Due to the nature of the instrument, the deferred issuance costs related to the facility
of $10.1 million and $4.1 million as of September 30, 2024 and December 31, 2023, respectively, were recognized in Other
non-current assets on the Consolidated Balance Sheets. The commitments available to be borrowed under the Revolving
Credit Facility were $1,399.7 million and $599.7 million as of September 30, 2024 and December 31, 2023, respectively,
as the available amount of the facility was reduced by $0.3 million of undrawn letters of credit.
The Company pays a commitment fee on undrawn amounts under the facility of 0.25% - 0.50%. As of September 30, 2024
and December 31, 2023, the Company accrued $0.7 million and $0.4 million, respectively, of unpaid commitment fees
related to the Revolving Credit Facility in Short-term debt and current portion of long-term debt on the Consolidated
Balance Sheets.
Senior Secured Notes due 2030
In February 2022, the LLC issued $400.0 million of Senior Secured Notes. As of September 30, 2024 and December 31,
2023, accrued interest on the notes was $2.9 million and $7.3 million, respectively, and the related unamortized deferred
issuance costs plus discount were $5.9 million and $6.6 million, respectively.
Senior Secured Notes due 2032
On September 19, 2024, the LLC issued $600.0 million of Senior Secured Notes. As of September 30, 2024, accrued
interest on the notes was $1.2 million and the related unamortized deferred issuance costs were $9.4 million.
Bridge Facility
On July 31, 2024, the Company entered into a 364-day unsecured bridge term loan facility (the “Bridge Facility”), which
provided unsecured bridge financing of up to $500.0 million to finance a portion of the US Assure acquisition price. In lieu
of drawing under the Bridge Facility, the Company borrowed under the Revolving Credit Facility. Concurrent with the
completion of the US Assure acquisition on August 30, 2024, the Bridge Facility was terminated, and the Company
recognized $4.1 million of related deferred financing costs in Interest expense, net on the Consolidated Statements of
Income (Loss) during the three and nine months ended September 30, 2024.
Subsidiary Units Subject to Mandatory Redemption
Ryan Re Underwriting Managers, LLC (“Ryan Re”) has the obligation to settle its outstanding preferred units owned by
Patrick G. Ryan in the amount of the aggregate unreturned capital and unpaid dividends on June 13, 2034, 15 years from
original issuance. As these units are mandatorily redeemable, they are classified as Long-term debt on the Consolidated
Balance Sheets. The historical cost of the units is $3.3 million, which was valued using an implicit rate of 9.8%. Accretion
of the discount using the implicit rate is recognized as Interest expense, net in the Consolidated Statements of Income
(Loss). As of September 30, 2024 and December 31, 2023, interest accrued on these units was $0.1 million and $1.9
million, respectively. $2.0 million of accrued return on the Ryan Re preferred units was paid during the nine months ended
September 30, 2024. See Note 15, Related Parties, for further information on Ryan Re.
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