Kinetik Holdings Inc
For the period ended Mar 31, 2024. Filed May 9, 2024.
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Mar 31, 2024 · Filed May 9, 2024
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DEBT AND FINANCING COSTS
- DEBT AND FINANCING COSTS
The following table summarizes the Company’s debt obligations as of March 31, 2024 and December 31, 2023:
| March 31, | December 31, | |
|---|---|---|
| 2024 | 2023 | |
| (In thousands) | ||
| Unsecured term loan | $1,200,000 | $1,200,000 |
| $1.00 billion 2030 senior unsecured notes | 1,000,000 | 1,000,000 |
| $0.80 billion 2028 senior unsecured notes | 800,000 | 800,000 |
| $1.25 billion revolving line of credit | 547,000 | 594,000 |
| Total long-term debt | 3,547,000 | 3,594,000 |
| Debt issuance costs, net(1) | (30,241) | (31,510) |
| Unamortized debt premiums and discounts, net | 356 | 319 |
| Total long-term debt, net | $3,517,115 | $3,562,809 |
(1)Excludes unamortized debt issuance cost related to the revolving line of credit. Unamortized debt issuance cost associated with the revolving line of credit was $5.0 million and $5.4 million as of March 31, 2024 and December 31, 2023, respectively. The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.
The table below presents the components of the Company’s financing costs, net of capitalized interest:
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2024 | 2023 | |
| (In thousands) | ||
| Capitalized interest | $(944) | $(2,233) |
| Debt issuance costs | 1,699 | 1,521 |
| Interest expense | 46,712 | 70,020 |
| Total financing costs, net of capitalized interest | $47,467 | $69,308 |
As of March 31, 2024 and December 31, 2023, unamortized debt issuance costs associated with the 5.875% Sustainability-Linked Senior Notes due 2030 (the “2030 Notes”), the 6.625% Sustainability-Linked Senior Notes due 2028 (the “2028 Notes”) and the unsecured term loan were $30.2 million and $31.5 million, respectively, and unamortized debt premiums and discount, net, associated with the 2028 Notes and the unsecured term loan were $0.4 million and $0.3 million, respectively.
Compliance with our Covenants
Both the revolving credit agreement with Bank of America, N.A. as administrative agent, and the term loan credit agreement with PNC Bank as administrative agent (the “Term Loan Credit Facility”), contain customary covenants and restrictive provisions which may, among other things, limit the Partnership’s ability to create liens, incur additional indebtedness and make restricted payments and the Partnership’s ability to liquidate, dissolve, consolidate with or merge into or with any other person. The 2030 Notes and the 2028 Notes also contain covenants and restrictive provisions, which may, among other things, limit the Partnership’s and its subsidiaries’ ability to create liens to secure indebtedness.
As of March 31, 2024, the Partnership was in compliance with all customary and financial covenants.
Letters of Credit
Our $1.25 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) scheduled to mature on or before June 8, 2027 can be used for letters of credit. Our obligations with respect to related letters of credit totaled $12.6 million as of March 31, 2024 and December 31, 2023, respectively.
Fair Value of Financial Instruments
The fair value of the Company and its subsidiaries’ consolidated debt as of March 31, 2024 and December 31, 2023 was $3.53 billion and $3.57 billion, respectively. On March 31, 2024, the senior unsecured notes’ fair value was based on Level 1 inputs and the Term Loan and Revolving Credit Facility and revolving line of credit’s fair value was based on Level 3 inputs.
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