OneMain Holdings, Inc.OMF
OneMain Holdings, Inc. Debt Disclosure
8. Long-term Debt | ||
Carrying value and fair value of long-term debt by type were as follows:
| December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||
| (dollars in millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||
| Senior debt | $ | 17,578 | $ | 18,574 | $ | 17,628 | $ | 19,278 | ||||||||||||||||||
| Junior subordinated debt | 172 | 207 | 172 | 148 | ||||||||||||||||||||||
| Total | $ | 17,750 | $ | 18,781 | $ | 17,800 | $ | 19,426 | ||||||||||||||||||
Weighted average effective interest rates on long-term debt by type were as follows:
| Years Ended December 31, | At December 31, | |||||||||||||||||||||||||||||||
| 2021 | 2020 | 2019 | 2021 | 2020 | ||||||||||||||||||||||||||||
| Senior debt | 5.38 | % | 5.68 | % | 5.90 | % | 5.05 | % | 5.70 | % | ||||||||||||||||||||||
| Junior subordinated debt | 4.02 | 5.64 | 8.68 | 3.86 | 4.09 | |||||||||||||||||||||||||||
| Total | 5.37 | 5.68 | 5.93 | 5.03 | 5.68 | |||||||||||||||||||||||||||
Principal maturities of long-term debt (excluding projected repayments on securitizations and revolving conduit facilities by period) by type of debt at December 31, 2021 were as follows:
| Senior Debt | ||||||||||||||||||||||||||||||||
| (dollars in millions) | Securitizations | Revolving Conduit Facilities | Unsecured Notes (a) | Junior Subordinated Debt (a) | Total | |||||||||||||||||||||||||||
| Interest rates (b) | 0.81%-6.94% | 0.86%-1.02% | 3.50%-8.88% | 1.87 | % | |||||||||||||||||||||||||||
| 2022 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
| 2023 | — | — | 1,175 | — | 1,175 | |||||||||||||||||||||||||||
| 2024 | — | — | 1,300 | — | 1,300 | |||||||||||||||||||||||||||
| 2025 | — | — | 1,835 | — | 1,835 | |||||||||||||||||||||||||||
| 2026 | — | — | 1,600 | — | 1,600 | |||||||||||||||||||||||||||
| 2027-2067 | — | — | 3,750 | 350 | 4,100 | |||||||||||||||||||||||||||
| Securitizations (c) | 7,432 | — | — | — | 7,432 | |||||||||||||||||||||||||||
| Revolving conduit facilities (c) | — | 600 | — | — | 600 | |||||||||||||||||||||||||||
| Total principal maturities | $ | 7,432 | $ | 600 | $ | 9,660 | $ | 350 | $ | 18,042 | ||||||||||||||||||||||
| Total carrying amount | $ | 7,399 | $ | 600 | $ | 9,579 | $ | 172 | $ | 17,750 | ||||||||||||||||||||||
| Debt issuance costs (d) | (31) | — | (83) | — | (114) | |||||||||||||||||||||||||||
(a) Pursuant to the Base Indenture, the Supplemental Indentures and the Guaranty Agreements, OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis, payments of principal, premium and interest on the Unsecured Notes and Junior Subordinated Debenture. The OMH guarantees of OMFC’s long-term debt are subject to customary release provisions.
(b) The interest rates shown are the range of contractual rates in effect at December 31, 2021.
(c) Securitizations and borrowings under the revolving conduit facilities are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. See Note 9 for further information on our long-term debt associated with securitizations and revolving conduit facilities.
(d) Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities and unsecured corporate revolver, which totaled $29 million at December 31, 2021 and are reported in “Other assets.”
2021 DEBT ISSUANCES AND REDEMPTIONS
Redemption of 7.75% Senior Notes Due 2021
On December 9, 2020, OMFC issued a notice of full redemption of its 7.75% Senior Notes due 2021. On January 8, 2021, OMFC paid a net aggregate amount of $681 million, inclusive of accrued interest and premiums, to complete the redemption. In connection with the redemption, we recognized $47 million of net loss on repurchases and repayments of debt during the year ended December 31, 2021.
Social Bond Offering - Issuance of 3.50% Senior Notes Due 2027
OMFC issued its inaugural social bond offering on June 22, 2021 for a total of $750 million aggregate principal amount of 3.50% Senior Notes due 2027 (the “Social Bond”) under the Base Indenture, as supplemented by the Twelfth Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.
Issuance of 3.875% Senior Notes Due 2028
On August 11, 2021, OMFC issued a total of $600 million aggregate principal amount of 3.875% Senior Notes due 2028 (the “3.875% Senior Notes due 2028”) under the Base Indenture, as supplemented by the Thirteenth Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.
Redemption of 6.125% Senior Notes Due 2022
On November 10, 2021, OMFC issued a notice of full redemption of its 6.125% Senior Notes due 2022. On December 10, 2021, OMFC paid a net aggregate amount of $1.0 billion, inclusive of accrued interest and premiums, to complete the redemption. In connection with the redemption, we recognized $23 million of net loss on repurchases and repayments of debt during the year ended December 31, 2021.
UNSECURED CORPORATE REVOLVER
On October 25, 2021, OMFC entered into an unsecured corporate revolver with a total maximum borrowing capacity of $1.0 billion. The corporate revolver has a five-year term during which draws and repayments may occur. Any outstanding principal balance is due and payable on October 25, 2026. At December 31, 2021, no amounts were drawn under this facility.
DEBT COVENANTS
OMFC Debt Agreements
The debt agreements to which OMFC and its subsidiaries are a party include customary terms and conditions, including covenants and representations and warranties. Some or all of these agreements also contain certain restrictions, including (i) restrictions on the ability to create senior liens on property and assets in connection with any new debt financings and (ii) OMFC’s ability to sell or convey all or substantially all of its assets, unless the transferee assumes OMFC’s obligations under the applicable debt agreement. In addition, the OMH guarantees of OMFC’s long-term debt discussed above are subject to customary release provisions.
With the exception of OMFC’s junior subordinated debenture and unsecured corporate revolver, none of our debt agreements requires OMFC or any of its subsidiaries to meet or maintain any specific financial targets or ratios. However, certain events, including non-payment of principal or interest, bankruptcy or insolvency, or a breach of a covenant or a representation or warranty, may constitute an event of default and trigger an acceleration of payments. In some cases, an event of default or acceleration of payments under one debt agreement may constitute a cross-default under other debt agreements resulting in an acceleration of payments under the other agreements.
As of December 31, 2021, OMFC was in compliance with all of the covenants under its debt agreements.
Junior Subordinated Debenture
In January of 2007, OMFC issued the Junior Subordinated Debenture, consisting of $350 million aggregate principal amount of 60-year junior subordinated debt. The Junior Subordinated Debenture underlies the trust preferred securities sold by a trust sponsored by OMFC. OMFC can redeem the Junior Subordinated Debenture at par beginning in January of 2017. The interest rate on the remaining principal balance of the Junior Subordinated Debenture consists of a variable floating rate (determined quarterly) equal to 3-month LIBOR plus 1.75%, or 1.87% as of December 31, 2021. On December 30, 2013, OMH entered into a guaranty agreement whereby it agreed to fully and unconditionally guarantee, on a junior subordinated basis, the payment of principle of, premium (if any), and interest on the Junior Subordinated Debenture.
Pursuant to the terms of the Junior Subordinated Debenture, OMFC, upon the occurrence of a mandatory trigger event, is required to defer interest payments to the holders of the Junior Subordinated Debenture (and not make dividend payments) unless OMFC obtains non-debt capital funding in an amount equal to all accrued and unpaid interest on the Junior Subordinated Debenture otherwise payable on the next interest payment date and pays such amount to the holders of the Junior Subordinated Debenture. A mandatory trigger event occurs if OMFC’s (i) tangible equity to tangible managed assets is less than 5.5% or (ii) average fixed charge ratio is not more than 1.10x for the trailing four quarters.
Based upon OMFC’s financial results for the 12 months ended December 31, 2021, a mandatory trigger event did not occur with respect to the interest payment due in January of 2022, as OMFC was in compliance with both required ratios discussed above.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Feb 11, 2022 | Showing above |
| 2020 | Feb 9, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 29, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.