XML 27 R16.htm IDEA: XBRL DOCUMENT v3.24.3
Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt Debt
Shentel Broadband Operations LLC, an indirect wholly owned subsidiary of Shentel, has a credit agreement, dated as of July 1, 2021 (as amended by (i) Amendment No. 1 to Credit Agreement, dated as of May 17, 2023, (ii) Consent and Amendment No. 2 to Credit Agreement, dated as of October 24, 2023, and (iii) Amendment No. 3, dated as of April 1, 2024, the “Credit Agreement”), with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders, which contains (i) a $150 million available revolving credit facility due June 2026 (the “Revolver”), (ii) a $150 million delayed draw amortizing term loan due June 2026 (“Term Loan A-1”), (iii) a $150 million delayed draw amortizing term loan due June 2028 (“Term Loan A-2”), and (iv) a $225 million delayed draw amortizing term loan due July 2028 (“Term Loan A-3” and collectively with Term Loan A-1 and Term Loan A-2, the “Term Loans”). The following loans were outstanding under the Credit Agreement:

(in thousands)September 30,
2024		December 31,
2023
Term loan A-1$146,279 $150,000 
Term loan A-2148,878 150,000 
Term loan A-350,000 — 
Total debt345,157 300,000 
Less: unamortized loan fees(598)(101)
Total debt, net of unamortized loan fees$344,559 $299,899 

Both Term Loan A-1 and Term Loan A-2 bore interest at one-month LIBOR plus a margin until May 2023 and now bear interest at one-month term Secured Overnight Financing Rate (“SOFR”) plus a margin. Term Loan A-3 also bears interest at one-month term SOFR plus a margin. The margin is variable and determined by the Company’s net leverage ratio. Interest is paid monthly. The interest rate for Term Loan A-1, A-2, and A-3 at September 30, 2024 was 6.45%, 6.70%, and 6.95%, respectively. The interest rate was 6.95% for both Term Loan A-1 and Term Loan A-2 at December 31, 2023.

Interest expense recorded in Shentel’s unaudited condensed consolidated statements of operations consisted of the following:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Interest expense
$6,158 $2,719 $17,755 $6,286 
Less: capitalized interest
(2,490)(1,521)(6,015)(3,791)
Interest expense, net of capitalized interest
$3,668 $1,198 $11,740 $2,495 
The Credit Agreement includes various covenants, including total net leverage ratio and debt service coverage ratio financial covenants.

Shentel’s Term Loans require quarterly payments based on a percentage of the outstanding balance. Based on the outstanding balance as of September 30, 2024, Term Loan A-1 required quarterly principal repayments of 1.25% quarterly from September 30, 2024 through March 31, 2026, with the remaining balance due July 1, 2026. Based on the outstanding balance as of September 30, 2024, Term Loan A-2 requires quarterly principal repayments of 0.25% through March 31, 2028, with the remaining balance due July 1, 2028. Based on the outstanding balance as of September 30, 2024, Term Loan A-3 requires quarterly principal repayments of 0.25% from June 30, 2025 through March 31, 2027; then increasing to 1.25% quarterly from June 30, 2027 through March 31, 2028, with the remaining balance due July 1, 2028.

Shentel has not made any borrowings under its Revolver as of September 30, 2024. In the event borrowings are made in the future, the entire outstanding principal amount borrowed against the Revolver is due June 30, 2026.

The following table summarizes the expected payments of Shentel’s outstanding borrowings as of September 30, 2024:

(in thousands)Amount
2024 (remainder of the year)$2,201 
20258,755 
2026139,074 
20272,419 
2028192,708 
Total$345,157 

Although no borrowings have been executed under the Revolver, Shentel has executed letter of credit arrangements totaling $7.1 million that reduce the available balance of the Revolver. The letter of credit arrangements were executed primarily pursuant to the requirements of the National Telecommunications and Information (“NTIA”) government grant program, discussed further in Note 14, Government Grants. These amounts are not considered borrowed, as no cash has been disbursed to Shentel or other parties.

The Credit Agreement is fully secured by a pledge and unconditional guarantee from the Company and all of its subsidiaries, except Shenandoah Telephone Company. This provides the lenders a security interest in substantially all of the assets of the Company.