Debt and Revolving Facility
|3 Months Ended|
Mar. 26, 2022
|Debt Disclosure [Abstract]|
|Debt and Revolving Facility||Debt and Revolving Credit Facility
The Company’s total debt as of March 26, 2022 and December 25, 2021 consisted of the following:
Assumed Xilinx Notes
In connection with the acquisition of Xilinx, the Company assumed $1.5 billion in aggregate principal of Xilinx’s 2.95% and 2.375% Notes (Assumed Xilinx Notes) which were recorded at fair value as of the Acquisition Date. The difference between the fair value at the Acquisition Date and the principal outstanding of the Assumed Xilinx Notes will be amortized through interest expense over the remaining term of the debt. The Assumed Xilinx Notes are general unsecured senior obligations of the Company with semi-annual fixed interest payments due on June 1 and December 1. The indentures governing the Assumed Xilinx Notes contain various covenants which limit the Company’s ability to, among other things, create certain liens on principal property or the capital stock of certain subsidiaries, enter into certain sale and leaseback transactions with respect to principal property, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company’s assets to another person.
During the three months ended March 26, 2022, the activity on the 2.125% Notes was immaterial.
During the three months ended March 27, 2021, holders of the 2.125% Notes converted $25 million principal amount of notes in exchange for approximately 3 million shares of the Company’s common stock at the conversion price of $8.00 per share. The Company recorded a loss of $6 million from these conversions in Other expense, net on its condensed consolidated statements of operations.
Future Debt Payment Obligations
As of March 26, 2022, the Company’s future debt and related interest payment obligations were as follows:
Revolving Credit Facility
The Company is party to a $500 million unsecured revolving credit facility (the Revolving Credit Facility), including a $50 million swingline sub-facility and a $75 million sublimit for letters of credit pursuant to a credit agreement with a syndicate of banks. The Revolving Credit Facility expires in June 2024. Borrowings under the Revolving Credit Facility bear interest at either the LIBOR or the base rate at the Company’s option (in each case, as customarily defined) plus an applicable margin. As of March 26, 2022, there were no borrowings outstanding under the Revolving Credit Facility and the Company was in compliance with all required covenants. As of March 26, 2022, the Company had $14 million of letters of credit outstanding under the Revolving Credit Facility.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef