Debt

9 Months Ended

Sep. 30, 2024

The following table provides details of the carrying values of debt as of the dates indicated (in millions):


Description	Maturity Date	September 30, 2024		December 31, 2023
Senior credit facility:	November 1, 2026
Revolving loans		$	145.0	$	773.0
Term loan		334.7		341.3
4.500% Senior Notes	August 15, 2028	600.0		600.0
5.900% Senior Notes	June 15, 2029	550.0		—
6.625% Senior Notes	August 15, 2029	71.5		284.2
Five-Year Term Loan Facility	October 7, 2027	288.8		300.0
Three-Year Term Loan Facility	October 7, 2025	—		400.0
Finance lease and other obligations		349.7		380.3
Total debt obligations		$	2,339.7	$	3,078.8
Less unamortized deferred financing costs		(15.9)		(13.5)
Total debt, net of deferred financing costs		$	2,323.8	$	3,065.3
Current portion of long-term debt		185.1		177.2
Long-term debt		$	2,138.7	$	2,888.1

2024 Debt Transactions

On June 10, 2024, the Company completed an offering of $550 million aggregate principal amount of 5.900% Senior Notes. Interest on the 5.900% Senior Notes is payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. The 5.900% Senior Notes are general senior unsecured obligations of the Company, and rank equal in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior in right of payment to all of the Company’s future subordinated indebtedness. The 5.900% Senior Notes are effectively subordinated to all secured indebtedness of the Company, to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all of the obligations of the subsidiaries of the Company, including trade payables. Financing costs incurred in connection with the issuance of the 5.900% Senior Notes totaled approximately $5.9 million, which will be amortized over the term of the 5.900% Senior Notes using the effective interest method.

The Company has the option to redeem all or a portion of the 5.900% Senior Notes at the redemption prices specified in the indenture that governs the 5.900% Senior Notes (the “5.900% Senior Notes Indenture”), plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If a change of control triggering event, as defined in the 5.900% Senior Notes Indenture, occurs, each holder of the 5.900% Senior Notes will have the right to require the Company to repurchase all or any portion of such holder’s 5.900% Senior Notes then outstanding at a price equal to 101% of the principal amount of the 5.900% Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase, subject to the right of holders of 5.900% Senior Notes on the relevant record date to receive interest due on the relevant interest payment date.

The 5.900% Senior Notes Indenture, among other things, generally limits the ability of the Company and certain of its subsidiaries to create liens, enter into sale and leaseback transactions and effect mergers, subject to certain exceptions. The 5.900% Senior Notes Indenture provides for customary events of default, which include, subject, in certain cases, to customary grace and cure periods, among others, nonpayment of principal or interest; breach of other covenants or agreements in the 5.900% Senior Notes Indenture; failure to pay certain other indebtedness; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is continuing, the trustee or holders of at least 25% of the 5.900% Senior Notes then outstanding may declare the principal amount, premium, if any, and accrued interest on all of the 5.900% Senior Notes to be immediately due and payable.

Concurrently with the Company’s offering of the 5.900% Senior Notes, IEA Energy Services LLC (“IEA LLC”), a wholly-owned subsidiary of the Company, launched a tender offer and consent solicitation (the “IEA Tender”) for IEA LLC’s 6.625% senior notes due 2029 (the “6.625% IEA Senior Notes”). The Company used a portion of the proceeds from the 5.900% Senior Notes offering to purchase $203.7 million in aggregate principal amount of 6.625% IEA Senior Notes tendered at a price equal to 100.0% of the principal amount of the 6.625% IEA Senior Notes, plus accrued and unpaid interest to, but excluding, the payment date. In July 2024, subsequent to the IEA Tender, IEA LLC exercised its right under the indenture that governs the 6.625% IEA Senior Notes to redeem the remaining $21.4 million in aggregate principal amount of the 6.625% IEA Senior Notes at a price equal to 95.0% of the principal amount of the 6.625% IEA Senior Notes redeemed, which amount approximated their carrying value, plus accrued and unpaid interest to, but excluding, the redemption date. As of both September 30, 2024 and December 31, 2023, the fair value of the Company’s remaining 6.625% senior notes due August 15, 2029, as estimated based on an exit price approach using Level 2 inputs, approximated their carrying value.

The remaining net proceeds from the 5.900% Senior Notes offering were used, along with available cash, for the repayment of the Company’s $400.0 million Three-Year Term Loan Facility. The Company recorded a pre-tax debt extinguishment loss of approximately $11.3 million in the second quarter of 2024 in connection with these transactions, which is separately presented within the Company’s consolidated statements of operations.

Senior Credit Facility

The Company maintains a $2.25 billion senior unsecured credit facility (the “Credit Facility”), which is composed of $1.9 billion of revolving commitments and a term loan with an original principal amount of $350.0 million (the “Term Loan”). The Term Loan is subject to amortization in quarterly principal installments of approximately $2.2 million, which quarterly installments increase to approximately $4.4 million in March 2025 until maturity. Quarterly principal installments on the Term Loan are subject to adjustment, if applicable, for certain prepayments. As of both September 30, 2024 and December 31, 2023, the fair values of the Credit Facility and Term Loan, as estimated based on an income approach utilizing significant unobservable Level 3 inputs including discount rate assumptions, approximated their carrying values.

Revolving loans accrued interest at weighted average rates of approximately 6.68% and 7.71% per annum as of September 30, 2024 and December 31, 2023, respectively. The Term Loan accrued interest at rates of 6.22% and 7.08% as of September 30, 2024 and December 31, 2023, respectively. Letters of credit of approximately $65.9 million and $64.9 million were issued as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, letter of credit fees accrued at 0.5625% and 0.6875% per annum, respectively, for performance standby letters of credit, and for financial standby letters of credit, accrued at 1.375% and 1.625% per annum, respectively. Outstanding letters of credit mature at various dates and most have automatic renewal provisions, subject to prior notice of cancellation.

As of September 30, 2024 and December 31, 2023, availability for revolving loans totaled $1,689.1 million and $1,062.1 million, respectively, or up to $584.1 million and $585.1 million, respectively, for new letters of credit. There were no outstanding revolving borrowings denominated in foreign currencies as of either September 30, 2024 or December 31, 2023. Revolving loan borrowing capacity included $300.0 million of availability in either Canadian dollars or Mexican pesos as of both September 30, 2024 and December 31, 2023. The unused facility fee as of September 30, 2024 and December 31, 2023 accrued at rates of 0.200% and 0.225% per annum, respectively.

Other Credit Facilities

The Company has other credit facilities that support the working capital requirements of its foreign operations and certain letter of credit issuances. There were no outstanding borrowings under the Company’s other credit facilities as of either September 30, 2024 or December 31, 2023. Additionally, the Company has a separate credit facility, under which it may issue up to $50.0 million of performance standby letters of credit. As of September 30, 2024 and December 31, 2023, letters of credit issued under this facility totaled $17.4 million and $17.2 million, respectively, which accrued fees at 0.75% and 0.90% per annum, respectively.

Five-Year Term Loan Facility

As of September 30, 2024, the Company had $288.8 million outstanding under an unsecured five-year term loan (the “Five-Year Term Loan”), for which the original principal amount totaled $300.0 million. The Five-Year Term Loan is subject to amortization in quarterly principal installments of approximately $3.75 million, which installments commenced on March 31, 2024 and will increase to $7.5 million on March 31, 2026 until maturity, subject to the application of certain prepayments. As of September 30, 2024 and December 31, 2023, the Five-Year Term Loan accrued interest at rates of 6.25% and 6.96%, respectively. The fair value of the Five-Year Term Loan as of both September 30, 2024 and December 31, 2023, as estimated based on an income approach utilizing significant unobservable Level 3 inputs including discount rate assumptions, approximated its carrying value.

Debt Covenants

MasTec was in compliance with the provisions and covenants of its outstanding debt instruments as of both September 30, 2024 and December 31, 2023.

Additional Information

As of September 30, 2024 and December 31, 2023, accrued interest payable, which is recorded within other accrued expenses in the consolidated balance sheets, totaled $22.2 million and $24.1 million, respectively. For additional information pertaining to the Company’s debt instruments, see Note 7 – Debt in the Company’s 2023 Form 10-K.