Kinetik Holdings Inc.KNTK
Kinetik Holdings Inc. Debt Disclosure
DEBT AND FINANCING COSTS
Term Loan Credit Agreement
On May 30, 2025, the Partnership entered into a term loan credit agreement (the “Term Loan Credit Agreement”) among Toronto Dominion (Texas) LLC, as administrative agent and the banks and other financial institutions party thereto, as lenders. The Term Loan Credit Agreement provides for a $1.15 billion senior unsecured credit facility and matures on May 30, 2028. The obligations under the Term Loan Credit Agreement are guaranteed by the Company.
In connection with entry into the Term Loan Credit Agreement, the Partnership paid fees and expenses to third parties totaling $1.2 million, which was capitalized as debt issuance cost, and paid fees directly to lenders totaling $1.8 million, which was capitalized as original debt discount. Capitalized debt issuance cost and original debt discount were included in the Consolidated Balance Sheets as direct deductions to the term loan and is amortized over the life of the term loan using the effective interest method.
The Term Loan Credit Agreement provides for borrowings of either at the Partnership’s option, base rate loans or term SOFR loans. Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as quoted by The Wall Street Journal from time to time, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.0% and (c) the adjusted term SOFR rate for an interest period of one month plus 1%, plus a margin that ranges between 0.25% and 1.0%, depending on the credit rating of the Partnership. SOFR loans bear interest at a rate per annum equal to the term SOFR rate for one, three or six month interest periods plus 0.10%, plus a margin that ranges between 1.25% and 2.0%, depending on the credit rating of the Partnership.
Revolving Credit Agreement
On May 30, 2025, the Partnership entered into a new revolving credit agreement (the “Revolving Credit Agreement”) among PNC Bank, National Association, as administrative agent (“PNC Bank”), and the banks and other financial institutions party thereto, as lenders. The Revolving Credit Agreement provides for a $1.60 billion senior unsecured revolving credit facility, which includes a $200.0 million sublimit for the issuance of letters of credit, and a $300.0 million sublimit for swingline loans. All borrowings under the Revolving Credit Agreement will mature on May 30, 2030, unless such maturity date is adjusted in accordance with the Revolving Credit Agreement. The obligations under the Revolving Credit Agreement are guaranteed by the Company.
The aggregate fees and expenses paid directly to lenders and third parties in connection with the Revolving Credit Agreement, totaled $6.9 million, which were capitalized as debt issuance costs, were included in “Deferred charges and other assets” on the Consolidated Balance Sheets and amortized over the term of the revolving credit facility to interest expense using straight-line method.
The Revolving Credit Agreement provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans or, with respect to swingline loans, simple SOFR loans. Base rate loans bear interest at a rate per annum equal to
the greatest of (a) the prime rate as announced from time to time by PNC Bank, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1% and (c) the adjusted term SOFR rate for an interest period of one month plus 1%, plus a margin that ranges between 0.25% and 1.0%, depending on the credit rating of the Partnership. SOFR loans bear interest at a rate per annum equal to the term SOFR rate for one, three or six month interest periods plus 0.10%, plus a margin that ranges between 1.25% and 2.0%, depending on the credit rating of the Partnership.
In addition, the Partnership is required to pay to each lender a commitment fee on the daily unfunded amount of such lender’s revolving commitment, which accrues at a rate that ranges between 0.15% and 0.35% depending on the credit rating of the Partnership.
Repayment of Existing Credit Facilities
On May 30, 2025, in connection with entry into the Term Loan Credit Agreement and the Revolving Credit Agreement, the Company repaid all outstanding borrowings under and extinguished (1) the 2022 term loan credit agreement, dated June 8, 2022 and (2) the 2022 revolving credit agreement, dated June 8, 2022. The Company recorded a loss on debt extinguishment of $0.6 million for the extinguishment of these existing credit facilities.
Accounts Receivable Securitization Facility
On April 1, 2025, the Partnership entered into an amendment to its accounts receivable securitization facility dated April 2, 2024 (the “A/R Facility” and as amended, the “Amended A/R Facility”) to increase the facility limit to $250.0 million and extend the Scheduled Termination Date to March 31, 2026, with a Final Maturity Date of the earlier of (a) 60 days following the Scheduled Termination Date, and (b) the Termination Date unless such Termination Date occurs solely as a result of the Scheduled Termination Date’s occurrence. In addition, the amendment eliminated certain Sustainability Performance Targets applicable to the Partnership and the Company under the Receivables Purchase Agreement.
Pursuant to the Amended A/R Facility, the Company and certain of its subsidiaries continuously transfer receivables to Kinetik Receivables LLC (“Kinetik Receivables”), who then transfers receivables that meet certain qualifying conditions to third-party purchasers in exchange for cash. These receivables are held by Kinetik Receivables and pledged to secure the collectability of the sold receivables and are accounted for as secured borrowings. The amount available for borrowing at any one time under the Amended A/R Facility is limited to an amount calculated based on the outstanding balance of eligible receivables sold to the purchasers, subject to certain reserves, concentration limits, and other limitations. As of December 31, 2025, eligible accounts receivable of $165.2 million were pledged to the Amended A/R Facility as collateral.
The aggregate fees and expenses paid directly to third parties for the amendment totaled $0.3 million, which were capitalized as debt issuance costs and included in the Consolidated Balance Sheets as a current asset within “Prepaid and other current assets”, and are amortized over the term of the Amended A/R Facility to interest expense using the straight-line method. The unamortized debt issuance costs related to the Amended A/R Facility were immaterial as of December 31, 2025.
December 2028 Sustainability-Linked Senior Notes
On March 14, 2025, the Company completed an additional private placement of $250.0 million aggregate principal amount of 6.625% Sustainability-Linked Senior Notes due 2028 (the “New 2028 Notes”) at 101.25% of par. The aggregate fees and expenses totaling $3.7 million paid to third parties to issue the New 2028 Notes and the initial purchasers’ discount of $2.5 million were capitalized as debt issuance cost and original debt discount, respectively. These capitalized costs were included in the Consolidated Balance Sheets as a direct deduction to the New 2028 Notes. In addition, original debt premium of $3.1 million was added to the New 2028 Notes. The debt issuance cost and original debt discount are amortized, and the debt premium is accreted to interest expense over the term of the New 2028 Notes using the effective interest method.
The New 2028 Notes were issued as additional notes under the indenture dated as of December 6, 2023, as may be supplemented from time to time (the “Indenture”), pursuant to which the Partnership has previously issued $800.0 million aggregate principal amount of 6.625% Sustainability-Linked Senior Notes due 2028 (the “Existing Notes” and together with the New 2028 Notes, the “2028 Notes”).
The New 2028 Notes and the Existing Notes are treated as a single series of securities under the Indenture and vote together as a single class, and the New 2028 Notes have substantially identical terms, other than the issue date, issue price and the first interest payment date, and the Existing Notes. Interest on the 2028 Notes is payable semi-annually in arrears on June 15 and December 15 of each year.
June 2030 Sustainability-Linked Senior Notes
On June 8, 2022, the Partnership completed a private placement of $1.00 billion aggregate principal amount of its 5.875% Senior Notes due 2030 (the “2030 Notes”), which are fully and unconditionally guaranteed by the Company. The 2030 Notes were issued at 99.59% of their face amount and will mature on June 15, 2030. Interest is payable semi-annually in arrears on June 15 and December 15 of each year. The aggregate fees and expenses paid to obtain the 2030 Notes totaled $21.5 million and were capitalized as debt issuance costs and included in the Consolidated Balance Sheets.
Compliance with our Covenants
The Term Loan Credit Agreement and the Revolving Credit Agreement contain customary covenants and restrictive provisions which may, among other things, limit the Partnership’s ability to create liens, incur additional indebtedness and make restricted payments and the Partnership’s ability to liquidate, dissolve, consolidate with or merge into or with any other person. The 2030 Notes and the 2028 Notes also contain covenants and restrictive provisions, which may, among other things, limit the Partnership’s and its subsidiaries’ ability to create liens to secure indebtedness.
The Amended A/R Facility contains covenants and restrictive provisions with respect to the Partnership and Kinetik Receivables that are customary for accounts receivable securitization facilities.
As of December 31, 2025, the Partnership is in compliance with all customary and financial covenants.
Letters of Credit
Our Revolving Credit Facility maturing on May 30, 2030, includes a $200.0 million sublimit for the issuance of letters of credit. Our obligations with respect to related letters of credit totaled $12.6 million as of December 31, 2025 and 2024.
Fair Value of Financial Instruments
The fair value of the Company and its subsidiaries’ consolidated debt as of December 31, 2025 and 2024 was $3.88 billion and $3.52 billion, respectively. At December 31, 2025, the 2030 Notes and the 2028 Notes’ fair value was based on quoted market price, which was classified as Level 1 inputs, the Term Loan and Revolving Credit Facility’s fair value was estimated based on applicable interest rate and SOFR Spread, which were classified as Level 3 inputs and the Amended A/R Facility’s fair value approximated its carrying value due to its short term nature.
The following table summarizes the Company’s debt obligations:
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (In thousands) | ||||||||||||||
A/R Facility(1) | $ | 165,200 | $ | 140,200 | ||||||||||
Total current debt obligations | $ | 165,200 | $ | 140,200 | ||||||||||
Unsecured term loan(2) | $ | 1,150,000 | $ | 1,000,000 | ||||||||||
5.875% 2030 senior unsecured notes | 1,000,000 | 1,000,000 | ||||||||||||
6.625% 2028 senior unsecured notes | 1,050,000 | 800,000 | ||||||||||||
Revolving line of credit(3) | 453,000 | 590,000 | ||||||||||||
Total Long term debt | 3,653,000 | 3,390,000 | ||||||||||||
Unamortized debt issuance costs, net(4) | (24,374) | (26,174) | ||||||||||||
Unamortized debt premium and discount, net | (906) | 170 | ||||||||||||
Total Long term debt, net | $ | 3,627,720 | $ | 3,363,996 | ||||||||||
(1)The effective interest rate was 4.65% and 5.55% as of December 31, 2025 and 2024, respectively.
(2)The effective interest rate of the Term Loan Credit Agreement was 5.44% as of December 31, 2025. The effective interest rate of the 2022 Term Loan Credit Agreement was 6.25% as of December 31, 2024.
(3)The weighted average effective interest rate of the Revolving Credit Agreement was 5.44% as of December 31, 2025. The weighted average effective interest rate of the 2022 Revolving Credit Agreement was 6.43% as of December 31, 2024.
(4)Excludes unamortized debt issuance cost related to the Revolving Credit Facility. Unamortized debt issuance cost associated with the Revolving Credit Facility was $8.5 million and $3.8 million as of December 31, 2025 and 2024, respectively. The unamortized debt issuance costs related to the revolving credit facilities were included in the “Deferred charges and other assets” of the Consolidated Balance Sheets.
The table below presents the components of the Company’s financing costs, net of capitalized interest:
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Capitalized interest | $ | (14,514) | $ | (8,321) | $ | (18,270) | ||||||||||||||
| Debt issuance costs | 7,869 | 7,438 | 6,194 | |||||||||||||||||
| Interest expense | 240,016 | 218,118 | 217,930 | |||||||||||||||||
| Total financing costs, net of capitalized interest | $ | 233,371 | $ | 217,235 | $ | 205,854 | ||||||||||||||
The following table reflects future maturities of our outstanding debt for each of the next five years and thereafter. These amounts exclude approximately $25.3 million in unamortized deferred financing costs, debt premium and discount, net:
| Fiscal Year | Amount | ||||
| (In thousands) | |||||
| 2026 | $ | 165,200 | |||
| 2027 | — | ||||
| 2028 | 2,200,000 | ||||
| 2029 | — | ||||
| 2030 | 1,453,000 | ||||
| Total | $ | 3,818,200 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Mar 7, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 1, 2019 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.