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Long-Term Debt | 12 Months Ended
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Dec. 31, 2024
Long-Term Debt |
Long-Term Debt | 16. Long–Term Debt Long–term debt is comprised of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31,
(in thousands) |  | 2024 | ​ | 2023
Credit Facility | ​ | $ | 408,325 | ​ | $ | 287,025
​ | ​ | ​ | ​ | ​ | ​ | ​
6.625% senior notes due September 2032: | ​ | ​ | ​ | ​ | ​ | ​
Principal outstanding | ​ | ​ | 700,000 | ​ |  | —
Unamortized debt issuance costs | ​ | ​ | (9,609) | ​ |  | —
​ | ​ | ​ | 690,391 | ​ |  | —
6.25% senior notes due April 2028: | ​ | ​ | ​ | ​ | ​ | ​
Principal outstanding | ​ |  | 800,000 | ​ |  | 800,000
Unamortized debt premium | ​ | ​ | 6,519 | ​ |  | 8,524
Unamortized debt issuance costs | ​ |  | (5,401) | ​ |  | (7,081)
​ | ​ |  | 801,118 | ​ |  | 801,443
6.875% senior notes due April 2027: | ​ | ​ | ​ | ​ | ​ | ​
Principal outstanding | ​ | ​ | 300,000 | ​ |  | 500,000
Unamortized debt issuance costs | ​ | ​ | (1,458) | ​ |  | (3,599)
​ | ​ | ​ | 298,542 | ​ |  | 496,401
​ | ​ | ​ | ​ | ​ | ​ | ​
Long-term debt | ​ | $ | 2,198,376 | ​ | $ | 1,584,869
​ Credit Facility First Amendment to the Amended and Restated Credit Agreement On August 28, 2024, we amended our Amended and Restated Credit Agreement to, among other things:
| ● | increase the borrowing capacity of the Credit Facility from $750.0 million to $1.1 billion;
| ● | increase the portion of the Credit Facility available for the issuance of swing line loans from $75.0 million to $110.0 million;
| ● | increase the cash dominion trigger threshold amount from $75.0 million to $110.0 million;
| ● | add certain financial institutions as lenders under the Credit Facility;
| ● | join a newly formed wholly owned subsidiary of Archrock Services, L.P. as a guarantor and grantor under the Credit Facility; and
| ● | modify certain other covenants to which we are subject.
We incurred $2.6 million in transaction costs related to the First Amendment to the Amended and Restated Credit Agreement, which were included in other assets in our consolidated balance sheets and are being amortized over the remaining term of the Credit Facility. ​ Amended and Restated Credit Agreement ​ On May 16, 2023, we amended and restated our Credit Facility to, among other things:
| ● | extend the maturity date of the Credit Facility from November 8, 2024 to May 16, 2028 (or December 2, 2026 or December 3, 2027 if any portion of the 2027 Notes and 2028 Notes, respectively, remain outstanding at such date);
| ● | change the referenced rate from LIBOR to SOFR so that borrowings under the Credit Facility bear interest at, based on our election, either a base rate or SOFR, plus an applicable margin; and
| ● | increase the portion of the Credit Facility available for the issuance of swing line loans from $50.0 million to $75.0 million.
We incurred $6.0 million in transaction costs related to the Amended and Restated Credit Agreement, 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 $1.0 million of unamortized deferred financing costs as a result of the Amended and Restated Credit Agreement, which was recorded to interest expense in our consolidated statements of operations during the year ended December 31, 2023. As of December 31, 2024, there were $4.0 million letters of credit outstanding under the Credit Facility and the applicable margin on borrowings was 2.2%. The weighted average annual interest rate on the outstanding balance under our Credit Facility was 6.8% and 7.7% at December 31, 2024 and 2023, respectively. As of December 31, 2024, we were in compliance with all covenants under our Amended and Restated Credit Agreement. Additionally, all undrawn capacity on our Credit Facility was available for borrowings as of December 31, 2024. ​ Other Facility Terms ​ As of December 31, 2024, our Credit Facility had an aggregate borrowing commitment of $1.1 billion. 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 $750.0 million. Portions of the Credit Facility, up to $110.0 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 either a base rate or SOFR, at our option, plus an applicable margin. The base rate is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.50% and (iii) one-month SOFR plus 1.00%. Depending on our leverage ratio, the applicable margin varies (i) in the case of base rate loans, from 1.00% to 1.75% and (ii) in the case of SOFR loans, from 2.00% to 2.75%. Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.25% to 0.375% depending on the ratio of the outstanding balance to the aggregate borrowing commitment. We incurred $2.1 million, $1.7 million and $1.9 million in commitment fees during the years ended December 31, 2024, 2023 and 2022, 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 certain of our subsidiaries. The Amended and Restated Credit 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 Amended and Restated Credit Agreement also contains various covenants requiring mandatory prepayments from the net cash proceeds of certain asset transfers. As of December 31, 2024, the following consolidated financial ratios, as defined in our Amended and Restated Credit 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 (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. 2032 Notes ​ On August 26, 2024, we completed a private offering of $700.0 million aggregate principal amount of 6.625% senior notes due September 2032 and received net proceeds of $690.0 million after deducting issuance costs. The $10.0 million of issuance costs were recorded as deferred financing costs within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statement of operations over the term of the notes. A portion of the net proceeds were used to fund a portion of the cash consideration for the TOPS Acquisition, the 2027 Notes Tender Offer and to repay borrowings outstanding under our Credit Facility. The 2032 Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the U.S. except pursuant to a registration exemption under the Securities Act and applicable state securities laws. We offered and issued the 2032 Notes only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to certain non-U.S. persons outside the U.S. in accordance with Regulation S under the Securities Act. The 2032 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us, and by all of our existing subsidiaries, other than Archrock Partners Finance Corp., which is the issuer of the 2032 Notes. The 2032 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness. We may, at our option, redeem all of part of the 2032 Notes at any time on or after September 1, 2027, at specified redemption prices, plus any accrued and unpaid interest. In addition, prior to September 1, 2027, we may redeem up to 40% of the 2032 Notes, in an amount equal to the net cash proceeds of one or more equity offerings, at a specified redemption price, plus any accrued and unpaid interest. We may also redeem all or part of the 2032 Notes at any time prior to September 1, 2027 at a redemption price equal to the principal amount and a make whole premium, plus any accrued and unpaid interest. ​ 2027 Notes Tender Offer In connection with the offering of the 2032 Notes, we completed a concurrent cash tender offer of $202.0 million, which reflects approximately 101% of the aggregate principal amount of the tendered 2027 Notes and $0.2 million of agent and legal fees. On the date of tender, the net carrying value of the tendered 2027 Notes was $198.8 million and we recorded a debt extinguishment loss of $3.2 million in our consolidated statements of operations during the year ended December 31, 2024. 2027 Notes and 2028 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%. In August 2024, we completed a cash tender offer to purchase $200 million aggregate principal amount of the 2027 Notes, after which $300 million aggregate principal amount of the 2027 Notes remained outstanding. 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 unsecured 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. Maturities of Long–Term Debt As of December 31, 2024, the maturities of our long–term debt, excluding interest to be accrued, are as follows: ​
​ | ​ | ​ | ​
​ |  | ​ | ​
(in thousands) | ​ | ​ | ​
2025 | ​ | $ | —
2026 | ​ |  | —
2027 | ​ |  | 298,542
2028 | ​ | ​ | 1,209,443
2029 | ​ |  | —
Thereafter | ​ |  | 690,391
​

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