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Long-Term Debt | 9 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
Long-Term Debt | 8. Long-Term Debt Long-term debt consisted of the following (in thousands):
| September 30, 2018 |  | December 31, 2017
Credit Facility | $ | — |  |  | $ | 56,000 |
Partnership Credit Facility | 826,500 |  |  | 674,306 |
Partnership’s 6% senior notes due April 2021 | 350,000 |  |  | 350,000 |
Less: Debt discount, net of amortization | (1,977 | ) |  | (2,523 | )
Less: Deferred financing costs, net of amortization | (2,568 | ) |  | (3,338 | )
| 345,455 |  |  | 344,139 |
Partnership’s 6% senior notes due October 2022 | 350,000 |  |  | 350,000 |
Less: Debt discount, net of amortization | (2,938 | ) |  | (3,441 | )
Less: Deferred financing costs, net of amortization | (3,338 | ) |  | (3,951 | )
| 343,724 |  |  | 342,608 |
Long-term debt | $ | 1,515,679 |  |  | $ | 1,417,053 |
Credit Facility On April 26, 2018, in connection with the Merger and Amendment No. 1, the Archrock Credit Facility was terminated. Upon termination, we repaid $63.2 million in borrowings and accrued and unpaid interest and fees outstanding. All commitments under the Archrock Credit Facility were terminated and the $15.4 million of letters of credit outstanding under the Archrock Credit Facility as of the Merger were converted to letters of credit under the Partnership Credit Facility. As a result of the termination, we recorded a debt extinguishment loss of $2.5 million. At December 31, 2017, the weighted average annual interest rate, excluding the effect of interest rate swaps, on the outstanding balance under the Archrock Credit Facility was 3.3%. During the three and nine months ended September 30, 2017, we incurred $0.2 million and $0.5 million, respectively, in commitment fees on the daily unused amount of the Archrock Credit Facility. We incurred $0.2 million in commitment fees in 2018 prior to the facility’s termination and were in compliance with all covenants under the Archrock Credit Facility through its closing. Partnership Credit Facility The Partnership Credit Facility is a five-year, $1.25 billion asset-based revolving credit facility that will mature on March 30, 2022 except that if any portion of the Partnership’s 6% senior notes due April 2021 are outstanding as of December 2, 2020, then maturity will instead be on December 2, 2020. In March 2017, the Partnership incurred $14.9 million in transaction costs related to the formation of the Partnership Credit Facility. Concurrent with entering into the Partnership Credit Facility, the Partnership expensed $0.6 million of unamortized deferred financing costs and recorded a debt extinguishment loss of $0.3 million related to the termination of its Former Credit Facility. On February 23, 2018, the Partnership amended the Partnership Credit Facility to, among other things:
• | increase the maximum Total Debt to EBITDA ratios, as defined in the Partnership Credit Facility agreement (see below for the revised ratios), effective as of the execution of Amendment No. 1 on February 23, 2018; and
• | effective upon completion of the Merger on April 26, 2018:
– | increase the aggregate revolving commitment from $1.1 billion to $1.25 billion;
– | increase the amount available for the issuance of letters of credit from $25.0 million to $50.0 million;
– | increase the basket sizes under certain covenants including covenants limiting our ability to make investments, incur debt, make restricted payments, incur liens and make asset dispositions;
– | name Archrock Services, L.P., one of our subsidiaries, as a borrower under the Partnership Credit Facility and certain of our other subsidiaries as loan guarantors; and
– | amend the definition of “Borrowing Base” to include certain assets of ours and our subsidiaries.
The Partnership incurred $3.3 million in transaction costs related to Amendment No. 1 which were included in other long-term assets in our condensed consolidated balance sheet and are being amortized over the term of the Partnership Credit Facility. As of September 30, 2018, the Partnership had $15.4 million outstanding letters of credit under the Partnership Credit Facility and the applicable margin on amounts outstanding under the Credit Facility was 3.2%. The weighted average annual interest rate on the outstanding balance under the Partnership Credit Facility, excluding the effect of interest rate swaps, was 5.5% and 4.8% at September 30, 2018 and December 31, 2017, respectively. The Partnership incurred $0.6 million in commitment fees on the daily unused amount of the Partnership Credit Facility and the Former Credit Facility during each of the three months ended September 30, 2018 and 2017, and $1.7 million and $1.5 million during the nine months ended September 30, 2018 and 2017, respectively. The Partnership must maintain the following consolidated financial ratios, as defined in the Partnership Credit Facility agreement:
EBITDA to Interest Expense | 2.5 to 1.0
Senior Secured Debt to EBITDA | 3.5 to 1.0
Total Debt to EBITDA |
Through fiscal year 2018 | 5.95 to 1.0
Through fiscal year 2019 | 5.75 to 1.0
Through second quarter of 2020 | 5.50 to 1.0
Thereafter (1) | 5.25 to 1.0
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(1) | Subject to a temporary increase to 5.5 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter.
As of September 30, 2018, the Partnership had undrawn capacity of $408.1 million under the Partnership Credit Facility. As a result of the ratio requirements above, $324.0 million of the $408.1 million of undrawn capacity was available for additional borrowings as of September 30, 2018. As of September 30, 2018, the Partnership was in compliance with all covenants under the Partnership Credit Facility agreement.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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