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Debt | 6 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
Debt | Debt HF Sinclair Credit Agreement We have a $1.65 billion senior unsecured revolving credit facility m aturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. At June 30, 2024, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $0.3 million under the HF Sinclair Credit Agreement. Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option, based on the currency of such indebtedness at either (a) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus 0.5%, Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1% and the prime rate (as publicly announced from time to time by the administrative agent), as applicable, plus an applicable margin (ranging from 0.25% to 1.125%), (b) the CDOR Rate (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%), (c) the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) or (d) the Daily Simple RFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%). In each case, the applicable margin is based on HF Sinclair’s debt rating assigned by Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc. HEP Credit Agreement Our wholly owned subsidiary, HEP, has a $1.2 billion seni or secured revolving credit facility maturing in July 2025 (the “HEP Credit Agreement”). In connection with the consummation of the HEP Merger Transaction, we amended the HEP Credit Agreement to, among other things, (a) provide a guaranty from us and terminate all guaranties from subsidiaries of HEP, (b) amend the definition of “Investment Grade Rating” (as defined in the HEP Credit Agreement) to reference the credit rating of our senior unsecured indebtedness, (c) eliminate the requirement to deliver separate audited and unaudited financial statements for HEP and its subsidiaries and only provide certain segment-level reporting for HEP with any compliance certificate delivered in accordance with the HEP Credit Agreement and (d) amend certain covenants to eliminate certain restrictions on (i) amendments to intercompany contracts, (ii) transactions with us and our subsidiaries and (iii) investments in and contributions, dividends, transfers and distributions to us and our subsidiaries. The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general corporate purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has an accordion feature that allows us to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. At June 30, 2024, we were in compliance with all of its covenants, had outstanding borrowings of $350.0 million an d no outstanding letters of credit under the HEP Credit Agreement. Prior to the Investment Grade Date (as defined in the HEP Credit Agreement), indebtedness under the HEP Credit Agreement bears interest, at our option, at either (a) the Alternate Base Rate (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 0.75% to 1.75%) or (b) Adjusted Term SOFR (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 1.75% to 2.75%). In each case, the applicable margin is based upon the Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on our borrowings was 7.07% as of June 30, 2024. Senior Notes Our unsecured senior notes and unsubordinated obligations (as set forth in the table below under “HF Sinclair Financing Arrangements”) rank equally with all future unsecured and unsubordinated indebtedness. Further, we may from time to time seek to retire some or all of our outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors. HF Sinclair Financing Arrangements Certain of our wholly owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution and then leased back the precious metals catalyst in exchange for cash. The volume of the precious metals catalyst and the lease rate are fixed over the term of each lease, and the lease payments are recorded as interest expense. The current leases mature in one year or less. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity. These financing arrangements are recorded at a Level 2 fair value totaling $35.6 million and $37.0 million at June 30, 2024 and December 31, 2023, respectively, and are included in “Accrued liabilities” on our consolidated balance sheets. See Note 4 for additional information on Level 2 inputs. HF Sinclair may, from time to time, issue letters of credit pursuant to uncommitted letters of credit facilities with its lenders. At June 30, 2024, there were no letters of credit outstanding under such credit facilities. The principal and carrying amounts of long-term debt are as follows:
|  |  |  | Carrying Amount (1)
|  | Maturity Date |  | June 30, 2024 |  | December 31, 2023
HollyFrontier Corporation Senior Notes: |  |  |  |
5.875% Senior Notes |  | April 2026 |  | $ | 202,900 |  |  | $ | 202,900 |
4.500% Senior Notes |  | October 2030 |  | 74,966 |  |  | 74,966 |
|  |  |  | 277,866 |  |  | 277,866 |
HF Sinclair Senior Notes: |  |  |  |  |  |
5.875% Senior Notes |  | April 2026 |  | 797,100 |  |  | 797,100 |
4.500% Senior Notes |  | October 2030 |  | 325,034 |  |  | 325,034 |
5.000% Senior Notes |  | February 2028 |  | 498,879 |  |  | 498,879 |
6.375% Senior Notes |  | April 2027 |  | 399,875 |  |  | 399,875 |
|  |  |  | 2,020,888 |  |  | 2,020,888 |
HEP Senior Notes: |  |  |  |  |  |
5.000% Senior Notes |  | February 2028 |  | 1,121 |  |  | 1,121 |
6.375% Senior Notes |  | April 2027 |  | 125 |  |  | 125 |
|  |  |  | 1,246 |  |  | 1,246 |
Total Senior Notes |  |  |  | 2,300,000 |  |  | 2,300,000 |
HEP Credit Agreement |  | July 2025 |  | 350,000 |  |  | 455,500 |
HF Sinclair Credit Agreement |  | April 2026 |  | — |  |  | — |
Total Credit Agreements |  |  |  | 350,000 |  |  | 455,500 |
Unamortized discount and debt issuance costs |  | (14,281) |  |  | (16,417) |
Total long-term debt, net |  |  |  | $ | 2,635,719 |  |  | $ | 2,739,083 |
(1)As of June 30, 2024 and December 31, 2023, the carrying amounts of our Senior Notes equaled the principal amounts. The fair values of the senior notes are as follows:
|  | June 30, 2024 |  | December 31, 2023
|  | (In thousands)
HollyFrontier Corporation, HF Sinclair and HEP Senior Notes |  | $ | 2,261,980 |  |  | $ | 2,271,856 |
These fair values are based on a Level 2 input. See Note 4 for additional information on Level 2 inputs. We capitalized $0.8 million and $1.2 million for the three months ended June 30, 2024 and 2023, respectively, and $1.5 million and $2.5 million for the six months ended June 30, 2024 and 2023, respectively, of interest attributable to construction projects.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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