Notes Payable |
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| Notes Payable |
13.
NOTES PAYABLE
On July 22, 2020, the Operating Company entered into a $150.0 million Note Purchase Agreement, pursuant to which it issued two tranches of notes (the “Private Notes”). As of March 31, 2022 and December 31, 2021, unamortized deferred financing costs were $1.8 million and $1.9 million, respectively, and the net carrying value of the Private Notes was $148.2 million and $148.1 million, respectively. The Private 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. The Private Notes contain various financial covenants applicable to the Operating Company. The covenants require the Operating Company to maintain (1) a Consolidated Total Debt to Consolidated EBITDA ratio of no more than 3.0x, (2) minimum liquidity of $2.5 million, and (3) minimum quarterly EBITDA of $10.0 million. As of March 31, 2022, the Operating Company was in full compliance with all debt covenants. The Private Notes are collateralized by the assets held by the Operating Company. The following table presents scheduled principal payments of the Operating Company’s debt as of March 31, 2022 (in thousands):
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 Company’s Private 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 three months ended March 31, 2022 (in thousands):
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