Annual report pursuant to Section 13 and 15(d)

NOTES PAYABLE

v3.22.4
NOTES PAYABLE
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
NOTES PAYABLE NOTES PAYABLE
On July 22, 2020, the Operating Company entered into a $150.0 million Note Purchase Agreement, pursuant to which the Operating Company issued two tranches of notes (the “2020 Private Placement Notes”). The 2020 Private Placement Notes have two tranches: a 5-year 3.9% fixed rate tranche that matures on July 22, 2025 and a 7-year 4.15% fixed rate tranche that matures on July 22, 2027.
On June 3, 2022, the Operating Company entered into a $150.0 million note purchase agreement pursuant to which the Operating Company issued two tranches of senior notes in a private placement. The transaction consisted of $75.0 million of 5.00% notes with a ten-year term maturing on July 12, 2032, and $75.0 million of 5.10% notes with a twelve-year term maturing on July 12, 2034 (the “2022 Private Placement Notes,” and together with the 2020 Private Placement Notes, the “Private Placement Notes”).
Under the terms of the Private Placement Notes, certain of the Operating Company’s assets are pledged as collateral. The Private Placement Notes contain covenants that, among other things, limit the Operating Company’s ability to: incur indebtedness; create, incur or allow liens; merge with other companies; engage in new or different lines of business; and engage in transactions with affiliates. The Private Placement Notes also contain financial covenants requiring the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.75x, (2) minimum liquidity of $15.0 million and (3) minimum quarterly EBITDA of $15.0 million and minimum EBITDA for the trailing four fiscal quarters of $80.0 million.
As of December 31, 2022 and 2021, unamortized deferred financing costs were $2.7 million and $1.9 million, respectively, and the net carrying value of the Private Placement Notes was $297.3 million and $148.1 million, respectively. As of December 31, 2022, the Company was in full compliance with all debt covenants.
The following table presents scheduled principal payments of the Private Placement Notes as of December 31, 2022 (in thousands):
2025 $ 75,000 
2026 — 
2027 75,000 
Thereafter 150,000 
Total $ 300,000 
The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the Private Placement Notes are recorded as a reduction of the corresponding debt obligation. All debt issuance costs are amortized over the remaining term of the related obligation.
The following table presents the activity of the Company’s debt issuance costs for the years ended December 31, 2022 and 2021, respectively (in thousands):
Unamortized debt issuance costs as of December 31, 2020 $ 2,287 
Amortization of debt issuance costs (429)
Unamortized debt issuance costs as of December 31, 2021 $ 1,858 
Debt issuance costs incurred 1,324 
Amortization of debt issuance costs (476)
Unamortized debt issuance costs as of December 31, 2022 $ 2,706 
During the years ended December 31, 2022, 2021, and 2020, interest expense was $9.6 million, $6.1 million, and $3.1 million, respectively.