DEBT | 7. DEBT Debt for the Partnership at March 31, 2021 and December 31, 2020, follows: March 31, 2021 December 31, 2020 (In thousands) Revolving Credit Facility : Summit Holdings' variable rate senior secured Revolving Credit Facility due May 13, 2022 $ 802,000 $ 857,000 Permian Transmission Credit Facility : Permian Transmissions' variable rate senior secured Credit Facility due March 8, 2028 17,500 — Less: unamortized debt issuance costs (1) (5,105 ) — 2022 Senior Notes : Summit Holdings' 5.5% senior unsecured notes due August 15, 2022 234,047 234,047 Less: unamortized debt issuance costs (1) (725 ) (859 ) 2025 Senior Notes : Summit Holdings' 5.75% senior unsecured notes due April 15, 2025 259,463 259,463 Less: unamortized debt issuance costs (1) (2,262 ) (2,325 ) Total debt 1,304,918 1,347,326 Less: current portion — — Total long-term debt $ 1,304,918 $ 1,347,326 ( 1) Revolving Credit Facility. The Partnership’s wholly owned subsidiary, Summit Holdings, has a senior secured revolving credit facility (the “Revolving Credit Facility”) which allows for revolving loans, letters of credit and swingline loans. The Revolving Credit Facility has a $1.1 billion borrowing capacity and matures on May 13, 2022. At March 31, 2021, the applicable margin under LIBOR borrowings was 2.75%, the interest rate was 2.86% and the unused portion of the Revolving Credit Facility totaled $275.9 million, subject to a commitment fee of 0.50%, after giving effect to the issuance of $22.1 million in outstanding but undrawn irrevocable standby letters of credit. Based on covenant limits, the Partnership’s available borrowing capacity under the Revolving Credit Facility as of March 31, 2021 was approximately $115.0 million. The Revolving Credit Facility includes three financial performance covenants which require Summit Holdings to maintain (i) a ratio of consolidated trailing 12-month earnings before interest, income taxes, depreciation and amortization (“EBITDA”) to net interest expense of not less than 2.50 to 1.00, as defined in the credit agreement, (ii) a ratio of total net indebtedness to consolidated trailing 12-month EBITDA of not more than 5.75 to 1.00 and (iii) a ratio of first lien net indebtedness to consolidated trailing 12-month EBITDA of not more than 3.50 to 1.00. As of and during the three months ended March 31, 2021, the Partnership was in compliance with the Revolving Credit Facility's financial covenants and there were no defaults or events of default. Permian Transmission Credit Facility. On March 8, 2021 (the “Closing Date”), the Partnership’s unrestricted subsidiary, Permian Transmission, entered into a Credit Agreement which allows for $175.0 million of senior secured credit facilities (the “Permian Transmission Credit Facilities”), including a $160.0 million Term Loan Facility (the “Term Loan Facility”) and a $15.0 million Working Capital Facility (the “Working Capital Facility”). The Permian Transmission Credit Facilities can be used to finance Permian Transmission’s capital calls associated with its investment in Double E, debt service and other general corporate purposes. Unexpended proceeds from draws on the Permian Transmission Credit Facilities are classified as restricted cash on the accompanying condensed consolidated balance sheets. The Permian Transmission Credit Facilities mature on the earlier of (i) the sixth anniversary of the term conversion date and (ii) seven years after the initial funding date, which occurred on the March 8, 2021. Loans under the Permian Transmission Credit Facilities are subject to varying rates of interest based on whether the loan is an Adjusted LIBOR borrowing (as defined in the credit agreement) or Alternate Base Rate (“ABR”) borrowing (as defined in the credit agreement). Adjusted LIBOR borrowings bear interest at (i) from the Closing Date to the fifth anniversary of the Closing Date, Adjusted LIBOR (as defined in the credit agreement) plus 2.375% and (ii) thereafter, Adjusted LIBOR plus 2.625%. ABR borrowings bear interest at (i) from the Closing Date to the fifth anniversary of the Closing Date, ABR (as defined in the credit agreement) plus 1.375% and (ii) thereafter, ABR plus 1.625%. The term conversion date will occur upon satisfaction of customary conditions, including bringing the Double E project into service pursuant to its transportation agreements. The Permian Transmission Credit Facilities include customary representations and warranties, affirmative covenants, negative covenants, and events of default with customary cure periods, knowledge qualifiers and materiality qualifiers. Events of default include non-payment of principal and interest, noncompliance with affirmative and negative covenants, inaccuracy of representations and warranties, not achieving term conversion by a specified date, termination of material contracts, revocation of material permits and other customary events of default. Permian Transmission is required to take all actions, within its control, to comply with any such covenants that apply to Double E. Secured interests in the equity and assets of Permian Transmission, including its 70% direct membership interest in Double E, have been pledged as collateral under the Credit Facilities. Upon term conversion, the Permian Transmission Credit Facilities will amortize based on a 10-year sculpted amortization schedule. Permian Transmission will also be required to maintain a 6-month debt service reserve, which can be supported by letters of credit issued under the Working Capital Facility. In addition, the Credit Facilities allow for restricted payments so long as there are no defaults or events of default, Permian Transmission maintains a 1.20x debt service coverage ratio and complies with the debt service reserve requirements and there is no breach of a material contract that would have a material adverse effect on distributions to Permian Transmission. As of March 31, 2021, the applicable margin under Adjusted LIBOR borrowings was 2.375%, the interest rate was 2.5% and the unused portion of the Permian Transmission Credit Facilities totaled $157.5 million, subject to a commitment fee of 0.70% as of March 31, 2021. Based on covenant limits, the Partnership’s available borrowing capacity under the Permian Transmission Credit Facilities, as of March 31, 2021, was approximately $155.5 million. As of and during the period from the Closing Date to March 31, 2021, the Partnership was in compliance with the Permian Transmission Credit Facilities financial covenants. There were no defaults or events of default during the period from the Closing Date to March 31, 2021. 2022 Senior Notes. The 2022 Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of our existing and future senior obligations. The 2022 Senior Notes are effectively subordinated in right of payment to all secured indebtedness, to the extent of the collateral securing such indebtedness. Summit Holdings and Finance Corp., the co-issuers of the 2022 Senior Notes (the “Co-Issuers”) may redeem all or part of the 2022 Senior Notes at a redemption price of 100.000%, plus accrued and unpaid interest, if any. Debt issuance costs of $5.1 million are being amortized over the life of the 2022 Senior Notes. As of and during the three month period ended March 31, 2021, that Partnership was in compliance with the financial covenants governing its 2022 Senior Notes. 2025 Senior Notes. The 2025 Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of the Partnership’s existing and future senior obligations. The 2025 Senior Notes are effectively subordinated in right of payment to all of the Partnership’s secured indebtedness, to the extent of the collateral securing such indebtedness. As of March 31, 2021, the Co-Issuers have the right to redeem all or part of the 2025 Senior Notes at a redemption price of 104.313%. On and after April 15, 2021, the Co-Issuers may redeem all or part of the 2025 Senior Notes at a redemption price of 102.875% (with the redemption price declining ratably each year to 100.000% on April 15, 2023), plus accrued and unpaid interest, if any, to, but not including the redemption date. Debt issuance costs of $7.7 million are being amortized over the life of the 2025 Senior Notes. As of and during the three month period ended March 31, 2021, that Partnership was in compliance with the financial covenants governing its 2025 Senior Notes. |