Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

We had no debt outstanding as of September 30, 2022 and December 31, 2021.

In August 2018, Cactus LLC entered into a five-year senior secured asset-based revolving credit facility with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for such lenders and as an issuing bank and swingline lender (the “ABL Credit Facility”). The ABL Credit Facility was first amended in September 2020 and provided for up to $75.0 million in revolving commitments.

On July 25, 2022, the ABL Credit Facility was amended and restated (the “Amended ABL Credit Facility”). The Amended ABL Credit Facility provides for up to $80.0 million in revolving commitments, up to $15.0 million of which is available for the issuance of letters of credit. Subject to certain terms and conditions set forth in the Amended ABL Credit Facility, Cactus LLC may request additional revolving commitments in an amount not to exceed $50.0 million, for a total of up to $130.0 million in revolving commitments. The Amended ABL Credit Facility matures on July 25, 2027, or such earlier date that is 91 days prior to the maturity date of any indebtedness that has a principal balance exceeding $30.0 million.

Borrowings under the Amended ABL Credit Facility bear interest at Cactus LLC’s option at either (i) the Alternate Base Rate (as defined therein) (“ABR”), or (ii) the Adjusted Term SOFR Rate (as defined therein) (“Term Benchmark”), plus, in each case, an applicable margin. Letters of credit issued under the Amended ABL Credit Facility accrue fees at a rate equal to the applicable margin for Term Benchmark borrowings. The applicable margin ranges from 0.0% to 0.50% per annum for ABR borrowings and 1.25% to 1.75% per annum for Term Benchmark borrowings and, in each case, is based on the average quarterly availability under the Amended ABL Credit Facility for the immediately preceding fiscal quarter. The unused portion of the Amended ABL Credit Facility is subject to a commitment fee of 0.250% per annum.

The maximum amount that Cactus LLC may borrow under the Amended ABL Credit Facility is subject to a borrowing base, which is based on a percentage of eligible accounts receivable and eligible inventory, subject to reserves and other adjustments. We were in compliance with all covenants under the Amended ABL Credit Facility as of September 30, 2022.