Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

NOTE 13—DEBT

The Company’s debt consists of the following as of December 31, 2021 and December 31, 2020:

	Year ended December 31,
	2021			2020
Term Loans	$	80,000		$	30,000
Revolving credit facility		—			36,697
Less: current principal maturities		(8,000	)		(10,000	)
Less: debt issuance costs (on long-term debt)		(608	)		(429	)
Long-term Debt	$	71,392		$	56,268
Current Portion of Long- term Debt		7,815			9,492
	$	79,207		$	65,760

Amended Credit Agreement

On December 12, 2018, Montauk Energy Holdings LLC (“MEH”) entered into the Second Amended and Restated Revolving Credit and Term Loan Agreement (as amended, “Credit Agreement”), by and among MEH, the financial institutions from time to time party thereto as lenders and Comerica Bank, as the administrative agent, sole lead arranger and sole bookrunner (“Comerica”). The Credit Agreement (i) amended and restated in its entirety MEH’s prior revolving credit and term loan facility, dated as of August 4, 2017, as amended, with Comerica and certain other financial institutions and (ii) replaced in its entirety the prior credit agreement, dated as of August 4, 2017, as amended, between Comerica and Bowerman Power LFG, LLC, a wholly-owned subsidiary of MEH.

On March 21, 2019, MEH entered into the first amendment to the Credit Agreement (the “First Amendment”), which clarified a variety of terms, definitions and calculations in the Credit Agreement. The Credit Agreement requires the Company to maintain customary affirmative and negative covenants, including certain financial covenants, which are measured at the end of each fiscal quarter.

On August 28, 2019 the Company received a temporary waiver for an anticipated Event of Default (as defined in the Credit Agreement) for the consecutive three-month period ended on August 31, 2019 (the “Specified Event of Default”). The Specified Event of Default was waived through October 1, 2019. On September 12, 2019, the Company entered into the Second Amendment. Among other matters, the Second Amendment redefined the Fixed Charge Coverage Ratio (as defined in the Credit Agreement), reduced the commitments under the revolving credit facility to $80,000, redefined the Total Leverage Ratio (as defined in the Credit Agreement) and eliminated the RIN Floor (as defined in the Second Amendment) as an Event of Default. In connection with the Second Amendment, the Company paid down the outstanding term loan by $38,250 and the resulting quarterly principal installments were reduced to $2,500.

In connection with the completion of the Reorganization Transactions and the IPO, the Company entered into the third amendment to the Credit Agreement (the “Third Amendment”). This amendment permitted the Change of Control provisions, as defined in the underlying agreement, to permit the Reorganization Transactions and IPO to be completed.

On December 21, 2021, MEH entered into the Fourth Amendment to the Second Amended and Restated Revolving Credit and Term Loan Agreement. The current credit agreement, which is secured by a lien on substantially all assets of the Company and certain of its subsidiaries, provides for a $80,000 term loan and a $120,000 revolving credit facility. The term loan amortizes in quarterly installments of $2,000 through 2024, then increases to $3,000 from 2025 to 2026 with a final payment of $32,000 in late 2026.

As of December 31, 2021, $80,000 was outstanding under the term loan. In addition, the Company had $3,905 of outstanding letters of credit as of December 31, 2021. Amounts available under the revolving credit facility are reduced by any amounts outstanding under letters of credit. As of December 31, 2021, the Company’s capacity available for borrowing under the revolving credit facility was $116,095. Borrowings of the term loans and revolving credit facility bear interest at the Bloomberg Short-Term Bank Yield Index Rate plus an applicable margin. Interest rates as of December 31, 2021 and 2020 were 2.91% and 2.96%, respectively.

The Company accounted for the Fourth amendment as both a debt modification and debt extinguishment in accordance with ASC 470, Debt (“ASC 470”). In connection with the Credit Agreement, the Company paid $2,027 in fees. Of this amount, $326 was expensed and $1,701 was capitalized and will be amortized over the life of the Credit Agreement. Amortized debt issuance expense in the amount of $483, $695 and $1,118 for the years ended December 31, 2021, 2020 and 2019, respectively, was recorded in the interest expense on the statement of operations.

As of December 31, 2021, the Company was in compliance with all financial covenants related to the Credit Agreement.

Capitalized Interest

Capitalized interest was $0 and $1,056 for the years ended December 31, 2021 and December 31, 2020, respectively. Interest is capitalized using the borrowing rate for the assets being constructed. Interest capitalized during and 2020 was for the construction of two LFG-to-energy projects.

Annual Maturities of Long-Term Debt

The following is a summary of annual principal maturities of long-term debt as of December 31, 2021:

Year Ending	Amount
2022	$	8,000
2023		8,000
2024		8,000
2025		12,000
2026		44,000
Total	$	80,000