Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

NOTE 9. DEBT

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

(in thousands)	2022			2021
Variable rate term loans1	$	721,000		$	403,500
Fixed rate term loans2		250,000			290,000
Revenue bonds3		65,735			65,735
Medium-term notes4		—			3,000
Long-term principal		1,036,735			762,235
Debt issuance costs		(2,324	)		(1,598	)
Unamortized discounts		(1,731	)		(2,381	)
Total long-term debt		1,032,680			758,256
Less: current portion of long-term debt		(39,979	)		(42,977	)
Long-term debt	$	992,701		$	715,279

1	Variable rate term loans are at rates of one-month SOFR plus a spread between 1.68% and 2.30% and mature between 2026 and 2032. As of December 31, 2022, the one-month SOFR rate was 4.33%. We have entered into interest rate swaps to fix the interest rate on these variable rate term loans. 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 2023 and 2025.
3	Revenue bonds have a fixed rate of 2.75% and mature in 2024.
4	Medium-term notes had a fixed rate of 8.75% and were repaid upon maturity in January 2022.

TERM LOANS

On September 14, 2022, through a seventh amendment to the Second Amended and Restated Term Loan Agreement (Amended Term Loan Agreement) with our primary lender, we refinanced $277.5 million of long-term debt assumed in our merger with CatchMark. The seventh amendment to the Amended Term Loan Agreement provided for a new 5-year term loan in the principal amount of $138.75 million maturing on September 1, 2027, and a new 8-year term loan in the principal amount of $138.75 million maturing on September 1, 2030 (collectively the New Term Loans). The New Term Loans bear interest at a rate equal to one-month SOFR plus 2.0% per annum. In addition, the 8-year term loan provides for a cost-of-capital reset at year five. In connection with the refinance, we entered into two one-month SOFR-indexed interest rate swaps to fix the interest rates on the New Term Loans at 2.50% and 2.66% respectively, before patronage credits from lenders. See Note 17: Mergers for additional information on the merger.

In December 2022, through an eighth 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 2032. The new term loan carries a variable interest rate of one-month SOFR plus 2.30%. In conjunction with the new term loan we entered into $40.0 million of interest rate swaps to fix the rate at 3.28% before patronage credits from lenders. Additionally, this amendment converted all our outstanding LIBOR-indexed variable term loans to SOFR-indexed variable rates, plus a SOFR adjustment of 0.10%, in the aggregate principal amount of $403.5 million with maturities between 2026 and 2031 under the Amended Term Loan Agreement. We have entered into SOFR-indexed interest rate swaps to fix the interest rate on these SOFR-indexed variable term loans. See Note 10: Derivative Instruments for additional information on our derivative instruments.

At December 31, 2022, $971.0 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, 2022, was $1.7 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, 2022 are as follows:

(in thousands)
2023	$	40,000
2024		175,735
2025		100,000
2026		27,500
2027		138,750
Thereafter		554,750
Total	$	1,036,735

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 borrowings under the Amended Credit Agreement are issued at a rate equal to the LIBOR Rate plus an applicable rate, while Base Rate borrowings 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, 2022, 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, 2022, there were no borrowings under the revolving line of credit and approximately $0.9 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, 2022.