Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

NOTE 9. DEBT

Long-term Debt consists of the following at December 31:

(in thousands)	2021			2020
Variable rate term loans1	$	403,500		$	403,500
Fixed rate term loans2		290,000			290,000
Revenue bonds3		65,735			65,735
Medium-term notes4		3,000			3,000
Long-term principal		762,235			762,235
Debt issuance costs		(1,598	)		(1,857	)
Unamortized discounts		(2,381	)		(3,031	)
Total long-term debt		758,256			757,347
Less: current portion of long-term debt		(42,977	)		(39,981	)
Long-term debt	$	715,279		$	717,366

1	Variable rate term loans are at rates of one or three-month LIBOR plus a spread between 1.85% and 2.10% and mature between 2026 and 2031. At December 31, 2021, the one and three-month LIBOR rates were 0.10% and 0.13%, respectively. We have entered into interest rate swaps for these variable rate term loans to fix the interest rate. See Note 10: Derivative Instruments for additional information.
2	Fixed rate term loans are at rates between 4.05% and 4.64% and mature between 2022 and 2025.
3	Revenue bonds have a fixed rate of 2.75% and mature in 2024.
4	Medium-term notes have a fixed rate of 8.75% and were paid off upon maturity in January 2022.

TERM LOANS

In December 2020, through a fourth amendment to the Second Amended and Restated Term Loan Agreement (Amended Term Loan Agreement) with our primary lender, we refinanced existing term loans of $46.0 million that matured with a new term loan that matures in 2030. The new term loan carries a variable interest rate of one-month LIBOR plus 2.10%. In conjunction with the new term loan we entered into $46.0 million of interest rate swaps to fix the rate at 3.04% before patronage credits from lenders.

In December 2021, through a fifth amendment to the Amended Term Loan Agreement, we refinanced an existing term loan of $40.0 million that matured with a new term loan that matures in November 2031. The new term loan carries a variable interest rate of one-month LIBOR plus 2.10%. In conjunction with the new term loan we entered into $40.0 million of interest rate swaps to fix the rate at 3.10% before patronage credits from lenders. See Note 10: Derivative Instruments for additional information on our derivative instruments.

At December 31, 2021, $693.5 million was outstanding under our Amended Term Loan Agreement.

DEBT ISSUANCE COSTS AND UNAMORTIZED DISCOUNTS

Debt issuance costs represent the capitalized direct costs incurred related to the issuance of debt. These costs are amortized to interest expense over the terms of the respective borrowings.

Unamortized discounts include a $4.9 million fair value adjustment to the $100.0 million term loan assumed in the Deltic merger. The unamortized balance of the fair value adjustment at December 31, 2021, was $2.4 million and will be amortized through the term loan’s maturity in 2025.

DEBT MATURITIES

Scheduled principal payments due on long-term debt at December 31, 2021 are as follows:

(in thousands)
2022	$	43,000
2023		40,000
2024		175,735
2025		100,000
2026		27,500
Thereafter		376,000
Total	$	762,235

CREDIT AGREEMENT

On December 14, 2021, we entered into the Third Amended and Restated Credit Agreement (Amended Credit Agreement). The Amended Credit Agreement extended the expiration date to February 14, 2027 and reduced our revolving line of credit from $380.0 million to $300.0 million. Under the terms of the Amended Credit Agreement, the amount of available principal may be increased up to an additional $500.0 million. The Amended Credit Agreement also includes a sublimit of $75.0 million for the issuance of standby letters of credit and a sublimit of $25.0 million for swing line loans. Usage under either or both subfacilities reduces availability under the revolving line of credit.

We may also utilize borrowings under the Amended Credit Agreement to, among other things, refinance existing indebtedness and provide funding for working capital requirements, capital projects, acquisitions and other general corporate expenditures.

Pricing on the Amended Credit Agreement is set according to the type of borrowing. LIBOR Loans are issued at a rate equal to the LIBOR Rate plus an applicable rate, while Base Rate Loans are issued at a rate equal to a Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus one half of one percent, (b) LIBOR that would then be applicable to a new LIBOR loan with a one month interest period plus 1%, and (c) the rate of interest in effect for such day as publicly announced from time to time by KeyBank as its "prime rate." The interest rates we pay for borrowings under either type of loan include an additional Applicable Rate, which can range from 0.85% to 1.10% for LIBOR loans and actual rate for Base Rate loans can range from 0% to 0.10% depending on our credit rating. Additionally, the Amended Credit Agreement provides mechanics relating to the transition from the use of LIBOR to a replacement benchmark rate upon the occurrence of certain transition events or elections made by the parties. As of December 31, 2021, we were able to borrow under the bank credit facility with an additional Applicable Rate of 1.025% for LIBOR Loans and 0.025% for Base Rate Loans. We also pay an annual fee of 0.175% on the $300.0 million revolving line of credit. At December 31, 2021, there were no borrowings under the revolving line of credit and approximately $1.0 million of the credit facility was utilized by outstanding letters of credit.

FINANCIAL COVENANTS

The Amended Term Loan Agreement and the Amended Credit Agreement (collectively referred to as the Agreements) contain certain covenants that limit our ability and that of our subsidiaries to create liens, merge or consolidate, dispose of assets, incur indebtedness and guarantees, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, enter into certain transactions with affiliates or change the nature of our business. The Agreements also contain financial maintenance covenants including the maintenance of a minimum interest coverage ratio and a maximum leverage ratio. We are permitted to pay dividends to our stockholders under the terms of the Agreements so long as we expect to remain in compliance with the financial maintenance covenants. We were in compliance with all debt and credit agreement covenants at December 31, 2021.