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Debt | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt |
Debt | 9.Debt At December 31, 2024 and 2023, our debt consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | December 31, | December 31,
​ |  | 2024 | 2023
7.625% Senior Sustainability-Linked Notes | ​ | $ | 400,000 | ​ | $ | 400,000
Credit Facility | ​ | ​ | 44,000 | ​ | ​ | 26,000
Total Long-Term Debt | ​ | ​ | 444,000 | ​ | ​ | 426,000
Less: Unamortized Debt Issuance Costs | ​ | ​ | (2,338) | ​ | ​ | (4,208)
Total Long-Term Debt, Net of Debt Issuance Costs | ​ | ​ | 441,662 | ​ | ​ | 421,792
Insurance Premium Financing Liability | ​ | ​ | 6,725 | ​ | ​ | 5,463
Total Debt | ​ | $ | 448,387 | ​ | $ | 427,255
​ Senior Sustainability-Linked Notes In April 2021, we issued $400.0 million aggregate principal amount of 7.625% Senior Sustainability-Linked Notes (the “Notes”) due April 1, 2026. The Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The Notes are guaranteed on a senior unsecured basis by our wholly-owned subsidiaries. Interest on the Notes is payable on April 1 and October 1 of each year. We may redeem all or part of the Notes at any time at a redemption price of 101.9063% through March 31, 2025 and a redemption price of 100% on or after April 1, 2025. If we undergo a change of control, we may be required to repurchase all or a portion of the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued interest. During 2023, we notified the trustee for the Notes that, for the year ended December 31, 2022, we had satisfied the Sustainability Performance Target (as defined in the indenture governing the Notes) in accordance with the requirements and procedures of the indenture. As a result, the interest rate on the Notes will remain 7.625% for the remainder of the term of the Notes. Credit Facility Concurrent with the Notes offering in April 2021, we entered into an amended and restated credit agreement (as it may be amended and/or restated from time to time, the “Credit Agreement”) to, among other things, (i) decrease the commitments under the Credit Facility to $200.0 million, (ii) extend the maturity date to April 1, 2025, (iii) reprice the loans made under the Credit Facility and unused commitment fees to be determined based on a leverage ratio ranging from 3.00:1.00 to 4.50:1.00, (iv) include an accordion feature permitting the Company to seek an increase of the Credit Facility of up to $75.0 million, subject to certain conditions, (v) amend the leverage ratio covenant to comprise of a maximum total funded debt to EBITDA ratio, net of $40.0 million of unrestricted cash and cash equivalents if the facility is drawn, and net of all unrestricted cash and cash equivalents if the facility is undrawn, (vii) increase the leverage ratio covenant test level for the first two fiscal quarters of 2021 to 5.00 to 1.00, for the third quarter of 2021 to 4.75 to 1.00, and thereafter to 4.50 to 1.00 and (viii) add a secured leverage ratio covenant of 2.50 to 1.00. The Credit Facility provided for, at our option:
| (i) | Base rate borrowings that bear interest at the highest of (a) the prime rate, (b) the federal funds effective rate plus 0.50% and (c) LIBOR plus 1%; plus a margin that ranges from 175 basis points to 275 basis points, depending upon our leverage ratio; or
​
| (ii) | Eurodollar borrowings that bear interest at the lesser of (i) LIBOR plus a margin that ranges from 275 basis points to 375 basis points, depending upon our leverage ratio;
​
| (iii) | Plus commitment fee rates that range from 37.5 basis points to 50.0 basis points, depending upon our leverage ratio.
In May 2023, the Credit Agreement was amended to, among other things, transition the loans under the Credit Facility to be made at SOFR instead of LIBOR and to allow financial reporting to be satisfied based on delivery of the consolidated financial statements of Aris Water Solutions, Inc., so long as it remains a passive holding company, instead of Solaris Midstream Holdings, LLC. In October 2023, the Credit Agreement was amended and restated to provide for, among other things, (i) commitments of $350.0 million, (ii) a maturity date of October 12, 2027, with a springing maturity of 91 days ahead of the Notes’ due date of April 1, 2026 in the event the Notes are not voluntarily redeemed, repurchased, refinanced or otherwise retired in full prior to such springing maturity date, (iii) loans made under the Credit Facility and unused commitment fees to be determined based on a leverage ratio ranging from 3.00:1.00 to 4.50:1.00, (iv) an accordion feature permitting the Company to seek an increase of the Credit Facility of up to $150.0 million, subject to certain conditions, (v) a leverage ratio covenant which comprises a maximum total funded debt to EBITDA ratio, net of $40.0 million of unrestricted cash and cash equivalents if the facility is drawn, and net of all unrestricted cash and cash equivalents if the facility is undrawn, (vi) a leverage ratio covenant test level which is currently 4.50 to 1.00 and (vii) a secured leverage ratio covenant of 2.50 to 1.00. The Credit Facility provides for, at our option:
i. |  | Base rate borrowings that bear interest at the highest of (a) the prime rate, (b) the federal funds effective rate plus 0.50% and (c) Term SOFR for an interest period of one month plus 1.00%; plus a margin that ranges from 175 basis points to 275 basis points, depending upon our leverage ratio; or
ii. |  | SOFR borrowings that bear interest at Term SOFR plus SOFR Adjustment of 0.10% plus a margin that ranges from 275 basis points to 375 basis points, depending upon our leverage ratio.
We incurred $3.9 million of expenses in 2023 to refinance the Credit Facility that are included in “Other Assets” on the consolidated balance sheet and “Payment of Debt Issuance Costs Related to Credit Facility” on the consolidated statements of cash flows and will be amortized over the remaining loan term. This was accounted for as a debt modification, and we recognized a loss of $0.1 million in the fourth quarter of 2023 which is included in “Other” expense on the consolidated statements of operations and consolidated statements of cash flows. Our weighted average interest rate on outstanding borrowings under the Credit Facility was 7.408% and 8.276% as of December 31, 2024 and 2023, respectively. As of December 31, 2024, we had $44.0 million of outstanding borrowings under the Credit Facility, $3.3 million in letters of credit outstanding and $302.7 million in revolving commitments available. The Credit Facility is secured by all of the real and material personal property owned by Solaris LLC or any of its subsidiaries, other than certain excluded assets. As of December 31, 2024, we were in compliance with all covenants contained in the Credit Facility. Insurance Premium Financing In the fourth quarter of 2024, we entered into a short-term agreement with a third-party to finance certain insurance premiums for an aggregate amount of $8.8 million, which is secured by all sums payable to the Company with reference to the insurance policies financed pursuant to this agreement, including any gross return premiums and any payment on account of loss which results in reduction of unearned premium in accordance with the term of the agreement. Under the terms and provisions of the agreement, the insurance premium financing is repayable in 11 monthly installments of principal and interest through September 2025, at a weighted-average annual percentage rate of 6.99%. As of December 31, 2024, the remaining balance was $6.7 million and is included in “Insurance Premium Financing Liability” on the consolidated balance sheet. In the fourth quarter of 2023, we entered into a short-term agreement with a third-party to finance certain insurance premiums for an aggregate amount of $6.6 million, at a weighted-average annual percentage rate of 7.49%. The insurance premium financing had similar terms to the policy described above and was fully repaid as of September 30, 2024. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Year Ended December 31,
​ |  | 2024 | ​ | 2023
Insurance Premium Financing Liability, Beginning Balance | ​ | $ | 5,463 | ​ | $ | —
Obligations Added During the Year | ​ | ​ | 8,779 | ​ | ​ | 6,636
Obligations Paid During the Year | ​ | ​ | (7,517) | ​ | ​ | (1,173)
Insurance Premium Financing Liability, Ending Balance | ​ | $ | 6,725 | ​ | $ | 5,463
​ Debt Maturities The following table provides the scheduled maturities of debt outstanding at December 31, 2024, for each of the next five years and thereafter. The amounts presented exclude unamortized discounts and debt issuance costs: ​
​ | ​ | ​ | ​
(in thousands) |  | ​ | ​
2025 | ​ | $ | 6,725
2026 | ​ | ​ | 400,000
2027 | ​ | ​ | 44,000
Total Debt Payments | ​ | $ | 450,725
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