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Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
As of December 31,Interest TypeWeighted average interest rate
20232022
Long-term debt
APAF Term Loan$474,609 $487,179 Fixed3.51 %
APAF II Term Loan112,810 125,668 Floating*
SOFR + 1.475%
APAF III Term Loan426,619 — Fixed6.03 %
APAGH Term Loan100,000 — Fixed8.50 %
APAG Revolver65,000 — Floating
SOFR + 1.60%
Other term loans11,000 28,483 Fixed3.04 %
Financing obligations recognized in failed sale leaseback transactions42,767 36,724 Imputed3.97 %
Total principal due for long-term debt1,232,805 678,054 
Unamortized discounts and premiums(13,722)(2,088)
Unamortized deferred financing costs(16,165)(11,404)
Less: Current portion of long-term debt39,611 29,959 
Long-term debt, less current portion$1,163,307 $634,603 
* Interest rate is effectively fixed by interest rate swap, see discussion below.
APAF Term Loan
On August 25, 2021, APA Finance, LLC (“APAF”), a wholly owned subsidiary of the Company, entered into a $503.0 million term loan facility with Blackstone Insurance Solutions ("BIS") through a consortium of lenders, which consists of investment grade-rated Class A and Class B notes (the “APAF Term Loan”). The APAF Term Loan has a weighted average 3.51% annual fixed interest rate and matures on February 29, 2056 (“Final Maturity Date”).
The APAF Term Loan amortizes at an initial rate of 2.5% of initial outstanding principal per annum for a period of 8 years at which point the amortization steps up to 4% per annum until September 30, 2031 (“Anticipated Repayment Date”). After the Anticipated Repayment Date, the loan becomes fully-amortizing, and all available cash is used to pay down principal until the Final Maturity Date. The APAF Term Loan is secured by membership interests in the Company's subsidiaries.
As of December 31, 2023, the outstanding principal balance of the APAF Term Loan was $474.6 million less unamortized debt discount and loan issuance costs totaling $6.7 million. As of December 31, 2022, the outstanding principal balance of the APAF Term Loan was $487.2 million less unamortized debt discount and loan issuance costs totaling $7.6 million.
As of December 31, 2023 and 2022, the Company was in compliance with all covenants.
APAF II Term Loan
On December 23, 2022, APA Finance II, LLC (“APAF II”), a wholly owned subsidiary of the Company, entered into a $125.7 million term loan facility (the “APAF II Term Loan”) with KeyBank National Association ("KeyBank") and The Huntington Bank ("Huntington") as lenders. The proceeds of the APAF II Term Loan were used to repay the outstanding amounts under certain project-level loans. The APAF II Term Loan matures on December 23, 2027, and has a variable interest rate based on SOFR plus a spread of 1.475%. Simultaneously with entering into the Term Loan, the Company entered into interest rate swaps for 100% of the amount of debt outstanding, which effectively fixed the interest rate at 4.885% (see Note 9, "Fair Value Measurements," for further details). The APAF II Term Loan is secured by membership interests in the Company's subsidiaries.
As of December 31, 2023, the outstanding principal balance of the APAF II Term Loan was $112.8 million, less unamortized debt issuance costs of $2.2 million. As of December 31, 2022, the outstanding principal balance of the APAF II Term Loan was $125.7 million, less unamortized debt issuance costs of $2.7 million. As of December 31, 2023 and 2022, the Company was in compliance with all covenants.
APAF III Term Loan
On February 15, 2023, the Company, through its subsidiaries, APA Finance III Borrower, LLC (the “Borrower”) and APA Finance III Borrower Holdings, LLC (“Holdings”), entered into a new long-term funding facility under the terms of a credit agreement among the Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S. Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF III Term Loan”).
This funding facility provides for a term loan of $204.0 million at a fixed rate of 5.62%. The APAF III term Loan amortizes at a rate of 2.5% of outstanding principal per annum until the anticipated repayment date of June 30, 2033. The maturity date of the
term loan is October 31, 2047. Upon lender approval, the Borrower has the right to increase the funding facility to make additional draws for certain solar generating facilities, as set forth in the Credit Agreement. On February 15, 2023, the Company borrowed $193.0 million from this facility to fund the True Green II Acquisition and the associated costs and expenses. The principal balance borrowed under the APAF III Term Loan was offset by $4.0 million of debt issuance costs and $6.3 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033. The APAF III Term Loan is secured by membership interests in the Company's subsidiaries.
On June 15, 2023, and July 21, 2023, the Company amended the APAF III Term Loan to add $47.0 million and $28.0 million of additional borrowings, respectively, the proceeds of which were used to repay outstanding term loans under the Construction to Term Loan Facility (as defined below), and to provide long-term financing for new solar projects. The principal balance borrowed under the amendments was offset by $0.3 million and $0.2 million of issuance costs, respectively, and $1.5 million and $1.1 million of issuance discount, respectively, which have been deferred and will be recognized as interest expense through June 30, 2033. Additionally, in conjunction with the amendments of the facility, the Company expensed $1.0 million of financing costs, which are included in Other expense, net in the consolidated statement of operations for the year ended December 31, 2023.
On December 20, 2023, the Company amended the APAF III Term Loan to add $163.0 million of additional borrowings, the proceeds of which were used to fund the Caldera Acquisition. The amendment increased the weighted average fixed interest rate for all borrowings under the APAF III Term Loan to 6.03%, and increased the rate of amortization for the new borrowings under the amendment to 3.25% per annum until June 30, 2033. The principal balance borrowed under the amendment was offset by $1.3 million of issuance costs and $0.8 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033. Additionally, in conjunction with the amendments of the facility, the Company expensed $0.8 million of financing costs, which are included in Other expense, net in the consolidated statements of operations for the year ended December 31, 2023, and recognized a loss on extinguishment of debt of $0.2 million in the consolidated statements of operations for the year ended December 31, 2023.
As of December 31, 2023, the outstanding principal balance of the APAF III Term Loan was $426.6 million, less unamortized debt issuance costs and discount of $14.3 million. As of December 31, 2023, the Company was in compliance with all covenants.
APAGH Term Loan
On December 27, 2023, APA Generation Holdings, LLC (“APAGH” or the “Borrower”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “APAGH Term Loan”) with an affiliate of Goldman Sachs Asset Management and CPPIB Credit Investments III Inc., a subsidiary of Canada Pension Plan Investment Board, as "Lenders." The total commitment under the credit agreement is $100.0 million. The Company can also allow for the funding of additional incremental loans in an amount not to exceed $100.0 million over the term of the credit agreement at the discretion of the Lenders. Subject to certain exceptions, the Borrower’s obligations to the Lenders are secured by the assets of the Borrower, its parent, Altus Power, LLC (“Holdings”) and the Company and are further guaranteed by Holdings and the Company.
Interest accrues on any outstanding balance at an initial fixed rate equal to 8.50%, subject to adjustments. The maturity date of the term loan is December 27, 2029.
On December 27, 2023, the Company borrowed $100.0 million under the APAGH Term Loan to fund future growth needs, which was partially offset by $3.0 million of issuance discount. The Company incurred $1.0 million of debt issuance costs related to the APAGH Term Loan, which have been deferred and will be recognized as interest expense through December 27, 2029.
As of December 31, 2023, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs and discount of $4.0 million. As of December 31, 2023, the Company was in compliance with all covenants.
APAG Revolver
On December 19, 2022, APA Generation, LLC (“APAG”), a wholly owned subsidiary of the Company, entered into revolving credit facility with Citibank, N.A. with a total committed capacity, including letters of credit, of $200.0 million (the “APAG Revolver”). Outstanding amounts under the APAG Revolver have a variable interest rate based on a base rate and an applicable margin. The APAG Revolver is secured by membership interests in the Company's subsidiaries. The APAG Revolver matures on December 19, 2027. As of December 31, 2023 and 2022, amounts outstanding under the APAG Revolver were $65.0 million and zero, respectively. As of December 31, 2023 and 2022, unamortized loan issuance costs were $2.7 million and $3.4 million, respectively, which are recorded in Other current assets on the consolidated balance sheets. As of December 31, 2023 and 2022, the Company was in compliance with all covenants.
Other Term Loans - Construction to Term Loan Facility
On January 10, 2020, APA Construction Finance, LLC (“APACF”) a wholly-owned subsidiary of the Company, entered into a credit agreement with Fifth Third Bank, National Association and Deutsche Bank AG New York Branch to fund the development and construction of future solar facilities (“Construction Loan to Term Loan Facility”). The Construction Loan to Term Loan Facility included a construction loan commitment of $187.5 million, which expired on January 10, 2023.
The construction loan commitment can convert to a term loan upon commercial operation of a particular solar energy facility. In addition, the Construction Loan to Term Loan Facility accrued a commitment fee at a rate equal to .50% per year of the daily unused amount of the commitment. On June 15, 2023, the Company repaid all outstanding term loans of $15.8 million and terminated the facility. In conjunction with the repayment, the Company incurred a loss on extinguishment of debt of $0.1 million.
As of December 31, 2022, the outstanding principal balances of the construction loan and term loan were zero and $15.9 million, respectively, and the Company had an unused borrowing capacity of $171.6 million. Outstanding amounts under the Construction to Term Loan Facility were secured by a first priority security interest in all of the property owned by APACF and each of its project companies. The Construction Loan to Term Loan Facility included various financial and other covenants for APACF and the Company, as guarantor. As of December 31, 2022, the Company was in compliance with all covenants under the Construction to Term Loan Facility.
Other Term Loans - Project-Level Term Loan
In conjunction with an acquisition of assets on August 29, 2022, the Company assumed a project-level term loan with an outstanding principal balance of $14.1 million and a fair value discount of $2.2 million. The term loan is subject to scheduled semi-annual amortization and interest payments, and matures on September 1, 2029.
As of December 31, 2023, the outstanding principal balance of the term loan was $11.0 million, less unamortized debt discount of $1.8 million. As of December 31, 2022, the outstanding principal balance of the term loan was $12.6 million, less unamortized debt discount of $2.1 million.
The term loan is secured by an interest in the underlying solar project assets and the revenues generated by those assets. As of December 31, 2023 and 2022, the Company was in compliance with all covenants.
APACF II Facility
On November 10, 2023, APACF II, LLC (“APACF II” or the “Borrower”) a wholly-owned subsidiary of the Company, entered into a credit agreement among the Borrower, APACF II Holdings, LLC, Pass Equipment Co., LLC, each of the project companies from time to time party thereto, each of the tax equity holdcos from time to time party thereto, U.S. Bank Trust Company, National Association, U.S. Bank National Association, each lender from time to time party thereto (collectively, the “Lenders”) and Blackstone Asset Based Finance Advisors LP, as Blackstone representative (“APACF II Facility”).
The aggregate amount of the commitments under the credit agreement is $200.0 million. The APACF II Facility matures on November 10, 2027, and bears interest at an annual rate of SOFR plus 3.25%. Borrowings under the credit agreement may be used by the Borrower to fund construction costs including equipment, labor, interconnection, as well as other development costs. The Company incurred $0.3 million of debt issuance costs related to the APACF II Facility, which have been deferred and will be recognized as interest expense through November 10, 2027.
As of December 31, 2023, no amounts were outstanding under the APACF II Facility.
Letter of Credit Facilities and Surety Bond Arrangements
The Company enters into letters of credit and surety bond arrangements with lenders, local municipalities, government agencies, and land lessors. These arrangements relate to certain performance-related obligations and serve as security under the applicable agreements. As of December 31, 2023, the Company had $54.7 million of letters of credit outstanding and $54.4 million of unused capacity. As of December 31, 2022, the Company had $13.4 million of letters of credit outstanding and $102.4 million of unused capacity. Additionally, as of December 31, 2023 and 2022, the Company had outstanding surety bonds of $5.4 million and $2.0 million, respectively.
To the extent liabilities are incurred as a result of the activities covered by the letters of credit or surety bonds, such liabilities are included on the accompanying consolidated balance sheets. From time to time, the Company is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies’ statutes and regulations. The Company sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company’s borrowing facility capacity.
Principal Maturities of Long-Term Debt
As of December 31, 2023, the principal maturities of the Company’s long-term debt, excluding financing obligations recognized in failed sale leaseback transactions discussed below, were as follows:
2024$36,484 
202536,588 
202637,176 
2027172,859 
202826,523 
Thereafter880,408 
Total principal payments$1,190,038 
Financing Obligations Recognized in Failed Sale Leaseback Transactions
From time to time, the Company sells equipment to third parties and enters into master lease agreements to lease the equipment back for an agreed-upon term. The Company has assessed these arrangements and determined that the transfer of assets should not be accounted for as a sale in accordance with ASC 842. Therefore, the Company accounts for these transactions using the financing method by recognizing the consideration received as a financing obligation, with the assets subject to the transaction remaining on the balance sheet of the Company and depreciated based on the Company's normal depreciation policy. The aggregate proceeds have been recorded as long-term debt within the consolidated balance sheets.
As of December 31, 2023 and 2022, the Company's recorded financing obligations were $41.8 million, net of $0.9 million of deferred transaction costs, and $35.6 million, net of $1.1 million of deferred transactions costs, respectively. Payments of $5.5 million and $2.2 million were made under the financing obligation for the years ended December 31, 2023 and 2022, respectively. Interest expense, inclusive of the amortization of deferred transaction costs for the years ended December 31, 2023 and 2022, was $1.7 million and $1.5 million, respectively.
During the year ended December 31, 2023, the Company paid $2.6 million to extinguish financing obligations of $2.7 million, resulting in a gain on extinguishment of debt of $0.1 million.
The table below shows the payments required under the failed sale-leaseback financing obligations for the years ended:

2024$3,128 
20253,023 
20262,995 
20272,986 
20282,967 
Thereafter14,143 
Total
$29,242 

The difference between the outstanding financing obligation of $42.8 million and $29.2 million of contractual payments due, including the residual value guarantee, is due to $13.2 million of investment tax credits claimed by the respective counterparties, less $2.6 million of the implied interest on financing obligation included in the contractual payments. The remaining difference is due to $3.4 million of interest accrued and a $0.4 million difference between the required contractual payments and the fair value of financing obligations acquired.