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Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt

Note 11. DEBT

Our balances for long-term debt and finance lease obligations are as follows (in thousands):

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

CAPL Credit Facility

 

$

767,500

 

 

$

756,000

 

Finance lease obligations

 

 

7,936

 

 

 

11,064

 

Total debt and finance lease obligations

 

 

775,436

 

 

 

767,064

 

Current portion

 

 

3,266

 

 

 

3,083

 

Noncurrent portion

 

 

772,170

 

 

 

763,981

 

Deferred financing costs, net

 

 

8,238

 

 

 

10,101

 

Noncurrent portion, net of deferred financing costs

 

$

763,932

 

 

$

753,880

 

 

As of December 31, 2024, future principal payments on debt and future minimum rental payments on finance lease obligations were as follows (in thousands):

 

 

Debt

 

 

Finance Lease Obligations

 

 

Total

 

2025

 

$

—

 

 

$

3,476

 

 

$

3,476

 

2026

 

 

—

 

 

 

3,576

 

 

 

3,576

 

2027

 

 

—

 

 

 

1,204

 

 

 

1,204

 

2028

 

 

767,500

 

 

 

—

 

 

 

767,500

 

Total future payments

 

 

767,500

 

 

 

8,256

 

 

 

775,756

 

Less impact of discounting

 

 

—

 

 

 

320

 

 

 

320

 

Total future principal payments

 

 

767,500

 

 

 

7,936

 

 

 

775,436

 

Current portion

 

 

—

 

 

 

3,266

 

 

 

3,266

 

Long-term portion

 

$

767,500

 

 

$

4,670

 

 

$

772,170

 

 

On March 31, 2023, the Partnership and its subsidiary, LGWS (together with the Partnership, the “Borrowers”), amended and restated the CAPL Credit Facility. As amended, the CAPL Credit Facility provides for an increase of the senior secured revolving credit facility from $750 million to $925 million and extends the maturity date from April 1, 2024 to March 31, 2028. The credit facility can be increased from time to time upon the Partnership’s written request, subject to certain conditions, up to an additional $350 million. The aggregate amount of the outstanding loans and letters of credit under the CAPL Credit Facility cannot exceed the combined revolving commitments then in effect. Certain subsidiaries of the Borrowers are guarantors ("Guarantors") of all of the obligations under the CAPL Credit Facility. All obligations under the CAPL Credit Facility are secured by substantially all of the Partnership’s assets and substantially all of the assets of the Guarantors.

Borrowings under the credit facility bear interest, at the Partnership’s option, at (1) a rate equal to the secured overnight financing rate (“SOFR”), for interest periods of one, three or six months, plus a margin ranging from 1.75% to 2.75% per annum depending on the Partnership’s Consolidated Leverage Ratio (as defined in the CAPL Credit Facility) plus a customary credit spread adjustment or (2) (a) an alternative base rate equal to the greatest of (i) the federal funds rate plus 0.5% per annum, (ii) SOFR for one month interest periods plus 1.00% per annum or (iii) the rate of interest established by the Agent (as defined in the CAPL Credit Facility), from time to time, as its prime rate, plus (b) a margin ranging from 0.75% to 1.75% per annum depending on the Partnership’s Consolidated Leverage Ratio. In addition, the Partnership incurs a commitment fee based on the unused portion of the credit facility at a rate ranging from 0.25% to 0.45% per annum depending on the Partnership’s Consolidated Leverage Ratio.

The Partnership also has the right to borrow swingline loans under the CAPL Credit Facility in an amount up to $35.0 million. Swingline loans bear interest at the base rate plus the applicable alternative base rate margin.

Letters of credit may be issued under the CAPL Credit Facility up to an aggregate amount of $65.0 million. Letters of credit are subject to a 0.125% fronting fee and other customary administrative charges. Letters of credit accrue a fee at a rate based on the applicable margin of SOFR loans.

The CAPL Credit Facility contains certain financial covenants. The Partnership is required to maintain a Consolidated Leverage Ratio (as defined in the CAPL Credit Facility) of (i) for each fiscal quarter ending March 31, 2024, June 30, 2024 and September 30, 2024, not greater than 5.00 to 1.00, and (ii) for each fiscal quarter ending December 31, 2024 and thereafter, not greater than 4.75 to 1.00. For the quarter during a Specified Acquisition Period (as defined in the CAPL Credit Facility), such threshold will be increased by increasing the numerator thereof by 0.5, but such numerator may not exceed 5.25 to 1.00. Upon the occurrence of a Qualified Note Offering (as defined in the CAPL Credit Facility), the Consolidated Leverage Ratio threshold when not in a Specified Acquisition Period is increased to 5.25 to 1.00, while the Specified Acquisition Period threshold is 5.50 to 1.00. Upon the occurrence of a Qualified Note Offering, the Partnership is also required to maintain a Consolidated Senior Secured Leverage Ratio (as defined in the CAPL Credit Facility) for the most recently completed four fiscal quarter period of not greater than 3.75 to 1.00. Such threshold is increased to 4.00 to 1.00 for the quarter during a Specified Acquisition Period. The Partnership is also required to maintain a Consolidated Interest Coverage Ratio (as defined in the CAPL Credit Facility) of at least 2.50 to 1.00.

The CAPL Credit Facility prohibits the Partnership from making cash distributions to its unitholders if any event of default occurs or would result from the distribution. In addition, the CAPL Credit Facility contains various covenants that may limit, among other things, the Partnership’s ability to:

•
grant liens;
•
incur or assume other indebtedness;
•
materially alter the character of the Partnership’s business in any material respect;
•
enter into certain mergers, liquidations and dissolutions; and
•
make certain investments, acquisitions or dispositions.

If an event of default exists under the CAPL Credit Facility, the lenders will be able to accelerate the maturity of the CAPL Credit Facility and exercise other rights and remedies. Events of default include, among others, the following:

•
failure to pay any principal under the CAPL Credit Facility when due or any interest, fees or other amounts under the CAPL Credit Facility when due after a grace period;
•
failure of any representation or warranty to be true and correct in any material respect;
•
failure to perform or otherwise comply with the covenants in the CAPL Credit Facility or in other loan documents without a waiver or amendment;
•
any default in the performance of any obligation or condition beyond the applicable grace period relating to any other indebtedness of more than $45.0 million;
•
certain judgment default for monetary judgments exceeding $45.0 million;
•
bankruptcy or insolvency event involving the Partnership or any of its subsidiaries;
•
certain Employee Retirement Income Security Act of 1974 (ERISA) violations;
•
a Change of Control (as defined in the CAPL Credit Facility) without a waiver or amendment; and
•
failure of the lenders for any reason to have a perfected first priority security interest in a material portion of the collateral granted by the Partnership or any of its subsidiaries.

 

The incremental borrowings at the March 2023 closing of the amended and restated CAPL Credit Facility were used to repay outstanding borrowings under the JKM Credit Facility, which was terminated on March 31, 2023, and to pay fees and expenses in connection with the CAPL Credit Facility and the termination of the JKM Credit Facility.

In connection with amending the CAPL Credit Facility and terminating the JKM Credit Facility in March 2023, the Partnership wrote off $1.1 million of deferred financing costs in the first quarter of 2023.

On February 20, 2024, in connection with our Applegreen Acquisition, we entered into an amendment (the “Amendment”) to the CAPL Credit Facility. The Amendment, among other things, modified the definition of Consolidated EBITDA contained in the Credit Agreement to permit the full addback of certain lease termination expenses incurred in connection with the Applegreen Acquisition and the addback of other lease termination expenses incurred in connection with other transactions, subject to certain terms and conditions.

Taking the interest rate swap contracts described in Note 12 into account, our effective interest rate on our CAPL Credit Facility at December 31, 2024 was 6.2% (our applicable margin was 2.25% as of December 31, 2024).

Letters of credit outstanding at December 31, 2024 and December 31, 2023 totaled $5.3 million and $4.5 million, respectively.

As of December 31, 2024, we were in compliance with our financial covenants under the CAPL Credit Facility. The amount of availability under the CAPL Credit Facility at December 31, 2024, after taking into consideration debt covenant restrictions, was $68.9 million.

Finance Lease Obligations

In May 2012, the Predecessor Entity entered into a 15-year master lease agreement with renewal options of up to an additional 20 years with Getty Realty Corporation. Since then, the agreement has been amended from time to time to add or remove sites. As of December 31, 2024, we lease 107 sites under this lease with a weighted-average remaining lease term of 2.3 years. We pay fixed rent, which increases 1.5% per year. In addition, the lease requires variable lease payments based on gallons of motor fuel sold.

Because the fair value of the land at lease inception was estimated to represent more than 25% of the total fair value of the real property subject to the lease, the land element of the lease was analyzed for operating or capital treatment separately from the rest of the property subject to the lease. The land element of the lease was classified as an operating lease and all of the other property was classified as a capital lease. This assessment was not required to be reassessed upon adoption of ASC 842–Leases. As such, future minimum rental payments are included in both the finance lease obligations table above as well as the operating lease table in Note 13.

The weighted-average discount rate for this finance lease obligation at December 31, 2024 and 2023 was 3.5%. Interest on this finance lease obligation amounted to $0.3 million, $0.4 million and $0.5 million for 2024, 2023 and 2022, respectively.