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Long-Term Debt and Notes Payable
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Long-Term Debt and Notes Payable Long-Term Debt and Notes Payable
As of December 31, 2023, the Company’s long-term debt and notes payable are as follows:
 Principal OutstandingUnamortized Premium (Discount)Unamortized Issuance CostsCarrying ValueFair Value
(in thousands)
6.250% senior notes
$1,225,000 $15,533 $(7,937)$1,232,596 $1,228,063 
Credit facilities:
Revolving facility280,000 — — 280,000 278,600 
Term loan2,092,485 (12,040)(3,229)2,077,216 2,092,485 
Other debt, including finance leases68,255 — (63)68,192 68,192 
Total debt$3,665,740 $3,493 $(11,229)$3,658,004 $3,667,340 
Principal maturities of the Company’s long-term debt and notes payable are approximately as follows:
 20242025202620272028ThereafterTotal
(in thousands)
6.250% senior notes
$— $— $1,225,000 $— $— $— $1,225,000 
Credit facilities:
Revolving facility— — — 280,000 — — 280,000 
Term loan21,030 21,030 21,030 2,029,395 — — 2,092,485 
Other debt, including finance leases49,299 2,594 2,461 1,942 1,620 10,339 68,255 
Total debt$70,329 $23,624 $1,248,491 $2,311,337 $1,620 $10,339 $3,665,740 
As of December 31, 2022, the Company’s long-term debt and notes payable are as follows:
 Principal OutstandingUnamortized Premium (Discount)Unamortized Issuance CostsCarrying ValueFair Value
(in thousands)
6.250% senior notes
$1,225,000 $21,555 $(10,948)$1,235,607 $1,163,689 
Credit facilities: 
Revolving facility445,000 — — 445,000 443,331 
Term loan2,103,437 (4,376)(4,771)2,094,290 2,056,110 
Other debt, including finance leases104,800 — (135)104,665 104,665 
Total debt$3,878,237 $17,179 $(15,854)$3,879,562 $3,767,795 
Credit Facilities
On March 6, 2017, Select entered into a senior secured credit agreement (the “credit agreement”). On February 21, 2023, the Company entered into Amendment No. 6 to the credit agreement, which extended the maturity date on $530.0 million of the total borrowing capacity of $650.0 million under the revolving credit facility (the “revolving facility” and, together with the term loan, the “credit facilities”) to March 6, 2025. On May 31, 2023, Select entered into Amendment No. 7 to the credit agreement. Amendment No 7. replaced the interest rate based on LIBOR and LIBOR-based mechanics applicable to borrowings under the credit agreement with an interest rate based on Adjusted Term SOFR (as defined in the credit agreement). The Adjusted Term SOFR Rate includes a credit spread adjustment of 0.10%. On July 31, 2023, the Company entered into Amendment No. 8 to the credit agreement, which provided a new tranche of term loans in an aggregate principal amount of $2,103.0 million to replace the existing term loans and a $710.0 million new revolving facility to replace the existing revolving facility. The term loans and the extended revolving facility will mature on March 6, 2027, with an early springing maturity 90 days prior to the senior notes maturity, triggered if more than $300 million of senior notes remain outstanding on May 15, 2026. The amendment also removed the credit spread adjustment of 0.10% for the term loan such that the term loan has an interest rate based on Term SOFR. The interest rate for the revolving facility continues to be based on Adjusted Term SOFR, which includes the credit spread adjustment of 0.10%. On August 31, 2023, the Company entered into Amendment No. 9 to the credit agreement, which increased the revolving facility commitments from $710.0 million to $770.0 million. During the year-ended December 31, 2023, the Company recognized a $14.7 million loss on early retirement of debt as a result of Amendment No. 8 to the Select credit agreement.
At December 31, 2023, Select had $434.2 million of availability under the revolving facility after giving effect to $280.0 million of outstanding borrowings and $55.8 million of outstanding letters of credit.
The interest rate on the term loan is equal to Term SOFR plus a percentage ranging from 2.75% to 3.00%, or the Alternative Base Rate (as defined in the credit agreement) plus a percentage ranging from 1.75% to 2.00%, in each case subject to a specified leverage ratio. The interest rate on the revolving facility is equal to Adjusted Term SOFR plus a percentage ranging from 2.25% to 2.50%, or the Alternative Base Rate (as defined in the credit agreement) plus a percentage ranging from 1.25% to 1.50%, in each case subject to a specified leverage ratio. As of December 31, 2023, the term loan borrowings bear interest at a rate that is indexed to one-month Term SOFR plus 3.00%. As of December 31, 2023, the revolving facility borrowings bear interest either at a rate indexed to one-month Adjusted Term SOFR plus 2.50% or the Alternative Base Rate plus 1.50%.
The revolving facility requires Select to maintain a leverage ratio, as specified in the credit agreement, not to exceed 7.00 to 1.00. As of December 31, 2023, Select’s leverage ratio was 4.54 to 1.00.
Borrowings under the credit facilities are guaranteed by Holdings and substantially all of Select’s current domestic subsidiaries, other than certain non-guarantor subsidiaries, and will be guaranteed by substantially all of Select’s future domestic subsidiaries. Borrowings under the credit facilities are secured by substantially all of Select’s existing and future property and assets and by a pledge of Select’s capital stock, the capital stock of Select’s domestic subsidiaries, other than certain non-guarantor subsidiaries, and up to 65% of the capital stock of Select’s foreign subsidiaries held directly by Select or a domestic subsidiary.
Prepayment of Borrowings
Select will be required to prepay borrowings under the credit facilities with (i) the net cash proceeds received from non-ordinary course asset sales or other dispositions, or as a result of a casualty or condemnation, subject to reinvestment provisions and other customary carveouts and, to the extent required, the payment of certain indebtedness secured by liens having priority over the debt under the credit facilities or subject to a first lien intercreditor agreement, (ii) the net cash proceeds received from the issuance of debt obligations other than certain permitted debt obligations, and (iii) a percentage of excess cash flow (as defined in the credit agreement) based on Select’s leverage ratio, as specified in the credit agreement.
For the year ended December 31, 2023, the Select credit agreement will require a prepayment of borrowings of 50% of excess cash flow, which will result in a payment of $79.1 million. The Company expects to use borrowings under the revolving facility to make all or a portion of the required prepayment during the quarter ended March 31, 2024; accordingly, the prepayment is reflected in long-term debt, net of the current portion reflected on the consolidated balance sheet as of December 31, 2023. Upon prepayment, Select will not be required to make the quarterly amortization payments on the Select term loan, as specified in the credit agreement, through the maturity of the revolving facility.
6.250% Senior Notes
On August 1, 2019, Select issued and sold $550.0 million aggregate principal amount of 6.250% senior notes due August 15, 2026. On December 10, 2019, Select issued and sold $675.0 million aggregate principal amount of 6.250% senior notes, due August 15, 2026, as additional notes under the indenture pursuant to which it previously issued $550.0 million aggregate principal amount of senior notes. The additional senior notes were issued at 106.00% of the aggregate principal amount. Interest on the senior notes accrues at the rate of 6.250% per annum and is payable semi-annually in arrears on February 15 and August 15 of each year.
The senior notes are Select’s senior unsecured obligations which are subordinated to all of Select’s existing and future secured indebtedness, including its credit facilities. The senior notes rank equally in right of payment with all of Select’s other existing and future senior unsecured indebtedness and senior in right of payment to all of Select’s existing and future subordinated indebtedness. The senior notes are unconditionally guaranteed on a joint and several basis by each of Select’s direct or indirect existing and future domestic restricted subsidiaries, other than certain non-guarantor subsidiaries.
Select is able to redeem some or all of the notes prior to maturity. The prices which would be paid if redeemed during the twelve-month period beginning on August 15 of the years indicated below are as follows:
YearPercentage
2023102.083 %
2024101.042 %
2025100.000 %
Select is obligated to offer to repurchase the senior notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, as a result of certain change of control events. These restrictions and prohibitions are subject to certain qualifications and exceptions.