Debt Obligations

3 Months Ended

Mar. 31, 2022

Debt Obligations

Debt Obligations

7. Debt Obligations

Debt obligations consist of the following (in thousands):

	March 31,		December 31,
	2022		2021
Revolving credit facility	$	260,000	$	220,000
Term loan		112,500		120,000
Notes to former owners		40,157		47,954
Finance lease liabilities (See Note 8)		—		266
Total principal amount		412,657		388,220
Less—unamortized debt issuance costs		(171)		(190)
Total debt, net of unamortized debt issuance costs		412,486		388,030
Less—current portion		(407)		(2,788)
Total long-term portion of debt, net	$	412,079	$	385,242

Revolving Credit Facility and Term Loan

We have a $600.0 million senior credit facility (the “Facility”) provided by a syndicate of banks. The Facility is composed of a revolving credit line in the amount of $450.0 million and a $150.0 million term loan, and the Facility provides for a $150.0 million accordion or increase option for the revolving portion of the Facility. As of March 31, 2022, the Facility capacity was $562.5 million, as the term loan was paid down by $37.5 million since the inception of the Facility. The amended Facility also includes a sublimit of up to $160.0 million issuable in the form of letters of credit. The Facility expires in January 2025 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds. As of March 31, 2022, we had $260.0 million of outstanding borrowings on the revolving credit facility, $55.6 million in letters of credit outstanding and $134.4 million of credit available.

There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. These rates are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. Additional margins are then added to these two rates.

The following is a summary of the additional margins:

	Consolidated Total Indebtedness to
	Credit Facility Adjusted EBITDA
	Less than 1.00		1.00 to 1.75		1.75 to 2.50		2.50 or greater
Additional Per Annum Interest Margin Added Under:
Base Rate Loan Option	0.25	%	0.50	%	0.75	%	1.00	%
Eurodollar Rate Loan Option	1.25	%	1.50	%	1.75	%	2.00	%

The weighted average interest rate applicable to the borrowings under the revolving credit facility was approximately 1.9% as of March 31, 2022. The weighted average interest rate applicable to the term loan was approximately 2.0% as of March 31, 2022.

Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs. We have also occasionally used letters of credit to guarantee performance under our contracts and to ensure payment to our subcontractors and vendors under those contracts. Our lenders issue such letters of credit through the Facility. We have never had a claim made against a letter of credit that resulted in payments by a lender or by us and believe such a claim is unlikely in the foreseeable future. The letter of credit fees range from 1.25% to 2.00% per annum, based on the ratio of Consolidated Total Indebtedness to “Credit Facility Adjusted EBITDA,” which shall mean Consolidated EBITDA as such term is defined in the credit agreement.

Commitment fees are payable on the portion of the revolving loan capacity not in use for borrowings or letters of credit at any given time. These fees range from 0.20% to 0.35% per annum, based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA.

The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply. Covenant compliance is assessed as of each quarter end. We were in compliance with all of our financial covenants as of March 31, 2022.

Notes to Former Owners

As part of the consideration used to acquire nine companies, we have outstanding notes to the former owners. Together, these notes had an outstanding balance of $40.2 million as of March 31, 2022. At March 31, 2022, future principal payments of notes to former owners by maturity year are as follows (dollars in thousands):

	Balance at		Range of Stated
	March 31, 2022		Interest Rates
2022	$	407	2.5 - 3.5	%
2023		9,400	2.5	%
2024		10,800	2.5 - 3.0	%
2025		19,550	2.3 - 2.5	%
Total	$	40,157