Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt

v3.22.1
Long-Term Debt
3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt
Note 7 – Long-Term Debt
The following table summarizes our debt obligations as of the dates presented:
March 31, 2022 December 31, 2021
Credit Facility $ 128,000  $ 208,000 
9.25% Senior Notes due 2026
400,000  400,000 
Mortgage debt 1
8,391  8,438 
Other 2
322  2,516 
Total 536,713  618,954 
Less: Unamortized discount 3
(3,560) (3,720)
Less: Unamortized deferred issuance costs 3, 4
(9,448) (9,853)
Total, net $ 523,705  $ 605,381 
Less: Current portion (1,925) (4,129)
Long-term debt $ 521,780  $ 601,252 
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1     The mortgage debt relates to the corporate office building and related assets acquired in connection with the Lonestar Acquisition for which assets are held as collateral for such debt. As of March 31, 2022 and December 31, 2021, these assets met the held for sale criteria and were classified as Assets held for sale on the condensed consolidated balance sheets.
2     Other debt of $2.2 million was extinguished during the three months ended March 31, 2022 and recorded as a gain on extinguishment of debt.
3     The discount and issuance costs of the 9.25% Senior Notes due 2026 are being amortized over its respective term using the effective-interest method.
4     Excludes issuance costs associated with the Credit Facility, which represents costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 9) and are being amortized over the term of the Credit Facility using the straight-line method.
Credit Facility
As of March 31, 2022, the Credit Facility had a $1.0 billion revolving commitment and a $725 million borrowing base with aggregate elected commitments of $400 million, and a $25 million sublimit for the issuance of letters of credit. Availability under the Credit Facility may not exceed the lesser of the aggregate elected commitments or the borrowing base less outstanding advances and letters of credit. The borrowing base under the Credit Facility is redetermined semi-annually, generally in the Spring and Fall of each year. Our next borrowing base redetermination is scheduled in May 2022. Additionally, we and the Credit Facility lenders may, upon request, initiate a redetermination at any time during the six-month period between scheduled redeterminations. The Credit Facility is available to us for general corporate purposes, including working capital.
The outstanding borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) a customary reference rate plus an applicable margin ranging from 1.50% to 2.50%, determined based on the utilization level under the Credit Facility or (b) a Eurodollar rate, including LIBOR through 2023, plus an applicable margin ranging from 2.50% to 3.50%, determined based on the utilization level under the Credit Facility. Interest on reference rate borrowings is payable quarterly in arrears and is computed on the basis of a year of 365/366 days, and interest on Eurodollar borrowings is payable every one, three or six months, at the election of the borrower, and is computed on the basis of a year of 360 days. As of March 31, 2022, the actual weighted-average interest rate on the outstanding borrowings under the Credit Facility was 3.02%. Unused commitment fees are charged at a rate of 0.50%.
The Credit Facility requires us to maintain (1) a minimum current ratio (as defined in the Credit Facility, which considers the unused portion of the total commitment as a current asset), measured as of the last day of each fiscal quarter of 1.00 to 1.00 and (2) a maximum leverage ratio (consolidated indebtedness to adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses, both as defined in the Credit Facility), measured as of the last day of each fiscal quarter of 3.50 to 1.00.
The Credit Facility also contains other customary affirmative and negative covenants as well as events of default and remedies. If we do not comply with the financial and other covenants in the Credit Facility, the lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Credit Facility.
As of March 31, 2022, we had $128.0 million in outstanding borrowings and $0.7 million in outstanding letters of credit under the Credit Facility. Factoring in the outstanding letters of credit, we had $271.3 million of availability under the Credit Facility as of March 31, 2022. During the three months ended March 31, 2021, we incurred and capitalized approximately $0.4 million of issue costs associated with amendments to the Credit Facility.
9.25% Senior Notes due 2026
On August 10, 2021, our indirect, wholly-owned subsidiary Penn Virginia Escrow LLC (the “Escrow Issuer”) completed an offering of $400 million aggregate principal amount of senior unsecured notes due 2026 (the “9.25% Senior Notes due 2026”) that bear interest at 9.25% and were sold at 99.018% of par. Obligations under the 9.25% Senior Notes due 2026 were assumed by Penn Virginia Holdings, LLC (“Holdings”), as borrower, and are guaranteed by the subsidiaries of Holdings that guarantee the Credit Facility.
Interest on the 9.25% Senior Notes due 2026 is payable semi-annually in arrears on February 15 and August 15 of each year. We may redeem the 9.25% Senior Notes due 2026 at any time in whole or in part from time to time in part at specified redemption prices.
The indenture governing the 9.25% Senior Notes due 2026 also contains other customary affirmative and negative covenants as well as events of default and remedies.
As of March 31, 2022, we were in compliance with all debt covenants.