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Long-Term Debt | 12 Months Ended
--- | ---
Dec. 31, 2021
Long-Term Debt |
Long-Term Debt | 14. Long-Term Debt ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31,
(in thousands) |  | 2021 | ​ | 2020
Credit Facility | ​ | $ | 234,500 | ​ | $ | 393,000
​ | ​ | ​ | ​ | ​ | ​ | ​
2028 Notes | ​ | ​ | ​ | ​ | ​ | ​
Principal | ​ |  | 800,000 | ​ |  | 800,000
Debt premium, net of amortization | ​ | ​ | 12,536 | ​ |  | 14,541
Deferred financing costs, net of amortization | ​ |  | (10,406) | ​ |  | (11,766)
​ | ​ |  | 802,130 | ​ |  | 802,775
​ | ​ | ​ | ​ | ​ | ​ | ​
2027 Notes | ​ | ​ | ​ | ​ | ​ | ​
Principal | ​ | ​ | 500,000 | ​ |  | 500,000
Deferred financing costs, net of amortization | ​ | ​ | (5,805) | ​ |  | (6,908)
​ | ​ | ​ | 494,195 | ​ |  | 493,092
​ | ​ | ​ | ​ | ​ | ​ | ​
Long-term debt | ​ | $ | 1,530,825 | ​ | $ | 1,688,867
​ Credit Facility As of December 31, 2021, there were $8.9 million letters of credit outstanding under the Credit Facility and the applicable margin on borrowings outstanding was 2.4%. The weighted average annual interest rate on the outstanding balance under the Credit Facility, excluding the effect of interest rate swaps, was 2.6% and 2.7% at December 31, 2021 and 2020, respectively. As a result of the facility’s ratio requirements (see below), $502.5 million of the $506.6 million of undrawn capacity was available for additional borrowings as of December 31, 2021. We were in compliance with all other covenants under our Credit Facility agreement. Amendments to the Credit Facility Amendment No. 3 In February 2021, we amended our Credit Facility to, among other things, reduce the aggregate revolving commitment from $1.25 billion to $750.0 million and adjust the maximum Senior Secured Debt to EBITDA and Total Debt to EBITDA ratios, as defined in the Credit Facility agreement, to those listed in the table below. We incurred $1.8 million in transaction costs related to Amendment No. 3, which were included in other assets in our consolidated balance sheets and are being amortized over the remaining term of the Credit Facility. In addition, we wrote off $4.9 million of unamortized deferred financing costs as a result of the amendment, which was recorded to interest expense in our consolidated statements of operations during the year ended December 31, 2021. Amendment No. 2 In November 2019, we amended the Credit Facility to, among other things, extend the maturity date of the Credit Facility from March 30, 2022 to November 8, 2024 and change the applicable margin for borrowings to those discussed in “Other Facility Terms” below. We incurred $6.4 million in transaction costs related to Amendment No. 2, which were included in other assets in our consolidated balance sheets and are being amortized over the remaining term of the Credit Facility. Other Facility Terms Subject to certain conditions, including approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional $250.0 million. Portions of the Credit Facility up to $50.0 million are available for the issuance of swing line loans and $50.0 million is available for the issuance of letters of credit. The Credit Facility bears interest at a base rate or LIBOR, at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin varies (i) in the case of LIBOR loans, from 2.00% to 2.75% and (ii) in the case of base rate loans, from 1.00% to 1.75%. The base rate is the highest of (i) the prime rate announced by JPMorgan Chase Bank, (ii) the Federal Funds Effective Rate plus 0.50% and (iii) one-month LIBOR plus 1.00%. Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.375%. We incurred $2.0 million, $2.0 million and $1.9 million in commitment fees during the years ended December 31, 2021, 2020 and 2019, respectively. The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors, the largest of which is compressors. Borrowings under the Credit Facility are secured by substantially all of our personal property assets and our Significant Domestic Subsidiaries (as defined in the Credit Facility agreement), including all of the membership interests of our Domestic Subsidiaries (as defined in the Credit Facility agreement). The Credit Facility agreement contains various covenants including, but not limited to, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens, repurchase equity and pay distributions. The Credit Facility agreement also contains various covenants requiring mandatory prepayments from the net cash proceeds of certain asset transfers. As of December 31, 2021, the following consolidated financial ratios, as defined in our Credit Facility agreement, were required: ​
​ | ​ | ​
EBITDA to Interest Expense |  | 2.5 to 1.0
Senior Secured Debt to EBITDA |  | 3.0 to 1.0
Total Debt to EBITDA |  |
Through fiscal year 2022 | ​ | 5.75 to 1.0
January 1, 2023 through September 30, 2023 |  | 5.50 to 1.0
Thereafter (1) |  | 5.25 to 1.0
(1) | Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter.
2028 Notes and 2027 Notes In December 2020, we completed a private offering of $300.0 million aggregate principal amount of 6.25% senior notes due April 2028, which were issued pursuant to the indenture under which we completed a private offering of $500.0 million aggregate principal amount of 6.25% senior notes in December 2019. The notes of the two offerings have identical terms and are treated as a single class of securities. The $300.0 million of notes were issued at 104.875% of their face value and have an effective interest rate of 5.6%. The $500.0 million of notes were issued at 100% of their face value and have an effective interest rate of 6.8%. We received net proceeds of $309.9 million, after deducting issuance costs of $4.7 million, from our December 2020 offering and net proceeds of $491.8 million, after deducting issuance costs of $8.2 million, from our December 2019 offering. In March 2019, we completed a private offering of $500.0 million aggregate principal amount of 6.875% senior notes due April 2027 and received net proceeds of $491.2 million after deducting issuance costs of $8.8 million. The $500.0 million of notes were issued at 100% of their face value and have an effective interest rate of 7.9%. The net proceeds from the 2027 Notes and 2028 Notes were used to repay borrowings outstanding under our Credit Facility. Issuance costs related to the 2027 Notes and 2028 Notes are considered deferred financing costs, and together with the issue premium of the December 2020 offering of 2028 Notes, are recorded within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statements of operations over the terms of the notes. The 2027 Notes and 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us and all of our existing subsidiaries, other than Archrock Partners, L.P. and Archrock Partners Finance Corp., which are co-issuers of both offerings, and certain of our future subsidiaries. The 2027 Notes and 2028 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior indebtedness. The 2027 Notes and 2028 Notes may be redeemed at any time, in whole or in part, at specified redemption prices and make-whole premiums, plus any accrued and unpaid interest. 2022 Notes In April 2020, the 2022 Notes were redeemed at 100% of their $350.0 million aggregate principal amount plus accrued and unpaid interest of $10.5 million with borrowings under the Credit Facility. A debt extinguishment loss of $4.0 million related to the redemption was recognized during the year ended December 31, 2020. 2021 Notes In April 2019, the 2021 Notes were redeemed at 100% of their $350.0 million aggregate principal amount plus accrued and unpaid interest of $0.2 million with borrowings under the Credit Facility. We recorded a debt extinguishment loss of $3.7 million related to the redemption during the year ended December 31, 2019. Long-Term Debt Maturity Contractual maturities of long-term debt over the next five years, excluding interest to be accrued, as of December 31, 2021, were as follows: ​
​ | ​ | ​ | ​
(in thousands) |  | ​ | ​
2022 | ​ | $ | —
2023 | ​ |  | —
2024 | ​ |  | 234,500
2025 | ​ |  | —
2026 | ​ |  | —
Long-term debt maturities through 2026 | ​ | $ | 234,500
​

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