QUANTA SERVICES INC

8. DEBT OBLIGATIONS:

Quanta’s long-term debt obligations consisted of the following (in thousands):

Senior Notes

The interest amounts due on Quanta’s senior notes on each payment date are set forth below (dollars in thousands):

The fair value of Quanta’s senior notes was $2.13 billion as of June 30, 2024, compared to a carrying value of $2.48 billion net of unamortized bond discount, underwriting discounts and deferred financing costs of $18.9 million. The fair value of the senior notes is based on the quoted market prices for the same issue, and the senior notes are categorized as Level 1 liabilities.

Senior Credit Facility

Recent Amendments

On July 31, 2024, Quanta entered into an amendment to the credit agreement for its senior credit facility (the Amended Credit Agreement) that, among other things, (i) increased the aggregate commitments for revolving loans under the senior credit facility from $2.64 billion to $2.80 billion and (ii) extended the maturity date for revolving loans under the senior credit facility from October 8, 2026 to July 31, 2029. The amendment also (i) increased the limit on surety-backed letters of credit issued separate from the senior credit facility to $500.0 million at any one time outstanding and (ii) increased the cross-default provisions with other debt instruments to those exceeding $400.0 million in borrowings or availability. Additionally, on June 10, 2024, the senior credit facility was amended to establish Term CORRA (as defined in the Amended Credit Agreement) as the benchmark rate, in replacement of the CDOR Rate (as defined therein prior to giving effect to the amendment).

As of and for the three and six months ended June 30, 2024

As of June 30, 2024, the credit agreement for Quanta’s senior credit facility provided for a $750.0 million term loan facility and aggregate revolving commitments of $2.64 billion, with a maturity date of October 8, 2026. Borrowings under the senior credit facility and the applicable interest rates were as follows (dollars in thousands):

As of June 30, 2024, Quanta was in compliance with all of the financial covenants under the credit agreement.

Term Loan. As of June 30, 2024, Quanta had $721.9 million outstanding under its term loan facility. The carrying amount of the term loan under Quanta’s senior credit facility approximates fair value due to its variable interest rate.

Revolving Loans. As of June 30, 2024, Quanta had $136.7 million of outstanding revolving loans under the senior credit facility, all of which were denominated in Canadian dollars. The carrying amounts of the revolving borrowings under Quanta’s senior credit facility approximate fair value, as all revolving borrowings have a variable interest rate.

As of June 30, 2024, Quanta also had $249.2 million of letters of credit issued under the senior credit facility, of which $94.8 million were denominated in U.S. dollars and $154.4 million were denominated in currencies other than the U.S. dollar, primarily Australian and Canadian dollars. Additionally, available commitments for revolving loans under the senior credit facility must be maintained in order to provide credit support for notes issued under Quanta’s commercial paper program, and therefore such notes effectively reduce the available borrowing capacity under the senior credit facility.

As of June 30, 2024, $2.25 billion remained available under the senior credit facility for new revolving loans, letters of credit and support of the commercial paper program.

Commercial Paper Program

As of June 30, 2024, Quanta hadno outstanding unsecured notes under its commercial paper program, although it did have borrowings during the three and six months ended June 30, 2024 and 2023. Borrowings under the commercial paper program and the applicable interest rates were as follows (dollars in thousands):

On July 17, 2024, Quanta utilized approximately $1.20 billion of borrowings under our commercial paper program, $400.0 million of borrowings under an additional term loan described below, and cash on hand, primarily to finance the cash portion of the acquisition of Cupertino and pay certain related costs and expenses and working capital requirements. Approximately $215.0 million of the commercial paper borrowings were repaid with cash held by Cupertino and acquired in the acquisition.

Additional Term Loan

In July 2024, Quanta entered into, and borrowed the full amount available under, a $400.0 million 90-day term loan facility outside of the senior credit facility for the purpose of financing a portion of the acquisition of Cupertino.

Quanta may voluntarily prepay the term loan borrowings from time to time, in whole or in part, without premium or penalty. The aggregate principal amount outstanding for the new term loan facility must be paid on or before the effective maturity date (October 11, 2024) and bears interest at a rate equal to the Term SOFR (as defined in the credit agreement) plus 1.375%.

Additional Letters of Credit

As of June 30, 2024, Quanta had $543.2 million of letters of credit issued outside of its senior credit facility, which were denominated in U.S. dollars.