v3.26.1
Long-Term Obligations
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Long-Term Obligations Long-Term Obligations
Outstanding borrowings under the Partnership’s debt instruments are as follows (in thousands):
June 30, 2026
December 31, 2025
DKL Revolving Facility
$
248,100 
$
211,850 
2034 Notes
800,000 
— 
2033 Notes
700,000 
700,000 
2029 Notes
650,000 
1,050,000 
2028 Notes
— 
400,000 
Principal amount of long-term debt
2,398,100 
2,361,850 
Less: Unamortized discount and premium and deferred financing costs
25,383 
17,430 
Total debt, net of unamortized discount and premium and deferred financing costs
$
2,372,717 
$
2,344,420 
DKL Credit Facility
On March 26, 2026, the Partnership entered into a credit agreement (the “New Credit Agreement”) that provides for revolving commitments up to $1,300.0 million in the aggregate with a sublimit up to $150.0 million for letters of credit and up to $50.0 million for swing line loans (the “DKL Revolving Facility”). The DKL Revolving Facility replaced the Partnership's previous revolving credit facility and term loan facility under the Fourth Amended and Restated Credit Agreement (the "Prior Credit Agreement") and proceeds were used to pay all outstanding balances of the Prior Credit Agreement. In connection with the New Credit Agreement, the Partnership recorded $10.2 million of debt issuance costs, which are being amortized over the term of the DKL Revolving Facility. In addition, the Partnership recognized a loss on extinguishment of debt of $1.6 million related to the write-off of unamortized deferred issuance costs associated with the Prior Credit Agreement, which is recorded in interest expense in the accompanying condensed consolidated statements of income. The maturity date for the DKL Revolving Facility is the earliest of (i) March 26, 2031, (ii) the date that is 180 days prior to the earliest maturity date of the Partnership’s 8.625% Senior Notes due 2029 to the extent that on such date, no less than $500.0 million of aggregate principal amount of the 2029 Notes remains outstanding, and (iii) such date on which the Revolving Credit Commitments (as defined in the New Credit Agreement) are terminated in whole due to voluntary termination or certain events of default.
Borrowings under the DKL Revolving Facility bear interest at either (i) a base rate (equal to the highest of the Prime Rate, the Federal Funds Rate plus 0.50%, Term SOFR for a one-month interest period plus 1.00%, and 1.00%) plus an applicable margin ranging from 0.50% to 1.50% per annum, or (ii) a term SOFR-based tranche rate (subject to a 0.00% floor) plus an applicable margin ranging from 1.50% to 2.50% per annum, in each case depending on the Partnership's Total Leverage Ratio (as defined in the New Credit Agreement). Swing loans bear interest at the base rate plus the applicable margin for base rate loans. As of June 30, 2026, the weighted average interest rate was 6.05%. There were no letters of credit outstanding as of June 30, 2026.
The New Credit Agreement contains affirmative and negative covenants and events of default which the Partnership considers customary and are similar to, but allow additional flexibility to the Partnership and its restricted subsidiaries as compared with those in our Prior Credit Agreement.
The DKL Revolving Facility contains affirmative and negative covenants and events of default, which the Partnership considers customary and are similar to those in our predecessor DKL Revolving Facility. We believe we were in compliance with all covenant requirements as of June 30, 2026. Under the financial covenants in the DKL Revolving Facility, the Partnership cannot:
•permit, as of the last day of each fiscal quarter, the Total Leverage Ratio (as defined in the New Credit Agreement) to be greater than 5.25 to 1.00;
•permit, as of the last day of each fiscal quarter, the Senior Leverage Ratio (as defined in the New Credit Agreement) to be greater than 3.75 to 1.00; and
•permit, as of the last day of each fiscal quarter, the interest coverage ratio to be equal to or less than 2.00 to 1.00.
The obligations under the DKL Revolving Facility are secured by first priority liens on substantially all of the Partnership’s and its subsidiaries’ tangible and intangible assets. The carrying value of outstanding borrowings under the DKL Revolving Facility as of June 30, 2026, approximates their fair values. Our debt facilities contain affirmative and negative covenants and events of default the Partnership considers usual and customary. As of June 30, 2026, we were in compliance with covenants on all of our debt instruments.
2034 Notes
On May 14, 2026, the Partnership and our wholly owned subsidiary Delek Logistics Finance Corp. (“Finance Corp.” and together with the Partnership, the “Issuers”), sold $800.0 million in aggregate principal amount of 6.875% senior notes due 2034 (the “2034 Notes”). Net proceeds were used to redeem the 2028 Notes including accrued interest and a portion of the 2029 Notes including accrued interest.
The 2034 Notes are general unsecured senior obligations of the Issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's subsidiaries other than Finance Corp. and will be unconditionally guaranteed on the same basis by certain of the Partnership's future subsidiaries. The 2034 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. The 2034 Notes will mature on June 1, 2034, and interest is payable semi-annually in arrears on each June 1 and December 1.
At any time prior to June 1, 2029, the Issuers may redeem up to 35% of the aggregate principal amount of the 2034 Notes at a redemption price of 106.875% of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations. Prior to June 1, 2029, the Issuers may also redeem all or part of the 2034 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations. In addition, beginning on June 1, 2029, the Issuers may, subject to certain conditions and limitations, redeem all or part of the 2034 Notes, at a redemption price of 103.438% of the redeemed principal for the twelve-month period beginning on June 1, 2029, 101.719% for the twelve-month period beginning on June 1, 2030, and 100.00% beginning on June 1, 2031 and thereafter, plus accrued and unpaid interest, if any. The Issuers may also redeem all (but not a portion of) the 2034 Notes under certain circumstances if 90.00% or more of the aggregate principal amount of the outstanding 2034 Notes are purchased in connection with a change of control or alternate offer. In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2034 Notes from holders at a price equal to 101.00% of the principal amount thereof, plus accrued and unpaid interest.
We recorded $13.5 million of debt issuance costs which are being amortized over the term of the 2034 Notes and included in interest expense in the condensed consolidated statements of income. As of June 30, 2026, the effective interest rate was 7.15%. The estimated fair value of 2034 Notes was $797.3 million as of June 30, 2026, measured based upon quoted market prices in an active market, defined as Level 2 in the fair value hierarchy.
2033 Notes
Our 2033 Notes are general unsecured senior obligations comprised of $700.0 million in aggregate principal 7.375% senior notes maturing on June 30, 2033. The 2033 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the existing Partnership's subsidiaries (other than Delek Logistics Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. As of June 30, 2026, the effective interest rate was 7.63%. The estimated fair value of the 2033 Notes was $714.4 million and $716.4 million as of June 30, 2026 and December 31, 2025, respectively, measured based upon quoted market prices in an active market, defined as Level 2 in the fair value hierarchy.
2029 Notes
Our 2029 Notes are general unsecured senior obligations comprised of $650.0 million in aggregate principal 8.625% senior notes maturing on March 15, 2029. The 2029 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Delek Logistics Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of the Partnership's future subsidiaries. As of June 30, 2026, the effective interest rate was 8.80%. The estimated fair value of the 2029 Notes was $676.6 million and $1,100.4 million as of June 30, 2026 and December 31, 2025, respectively, measured based upon quoted market prices in an active market, defined as Level 2 in the fair value hierarchy.
Concurrent with the issuance of the 2034 Notes, the Partnership issued a conditional notice of partial redemption of the 2029 Notes at a redemption price of 104.313% for $400.0 million of the principal amount plus accrued interest. As a result, the Partnership recognized a loss on extinguishment of debt of $19.0 million, which is recorded in interest expense in the accompanying condensed consolidated statements of income.
2028 Notes
Our 2028 Notes were general unsecured senior obligations comprised of $400.0 million in aggregate principal of 7.125% senior notes with an original maturity date of June 1, 2028. The 2028 Notes were unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Delek Logistics Finance Corp.).
On May 11, 2026, the Partnership made a cash tender offer to purchase all outstanding 2028 Notes, receiving tenders from holders of approximately $270.7 million in aggregate principal amount. The remaining 2028 Notes were subsequently redeemed by June 8, 2026, pursuant to the notice of conditional redemption, resulting in the full extinguishment of the $400.0 million aggregate principal. The Partnership recognized a loss on extinguishment of debt of $2.4 million, which is recorded in interest expense in the accompanying condensed consolidated statements of income.