NOTE 8 – LONG-TERM DEBT

Long-term debt consisted of the following at June 30, 2013 and December 31, 2012 (in thousands):

	2013			2012

Line of credit	$	124,489		$	104,526
Term loan		119,688			130,000
Unsecured subordinated notes payable in quarterly installments at 5% through November 2015		3,154			3,870
		247,331			238,396
Less: Current portion		(22,057	)		(22,057	)
Total Long-term Debt	$	225,274		$	216,339

On July 11, 2012 DXP entered into a new credit facility with Wells Fargo Bank National Association, as Issuing Lender, Swingline Lender and Administrative Agent for the lenders. On December 31, 2012 the Company amended the agreement which increased the Credit Facility by $75 million (the “Facility”). The Facility consists of a revolving credit facility that provides a $262.5 million line of credit to the Company and a term loan. The term loan component of the facility was $119.7 million at June 30, 2013.

The line of credit portion of the Facility provides the option of interest at LIBOR plus an applicable margin ranging from 1.25% to 2.25% or prime plus an applicable margin from 0.25% to 1.25% where the applicable margin is determined by the Company’s leverage ratio as defined by the Facility at the date of borrowing. Rates for the term loan component ($119.7 million at June 30, 2013) are 25 basis points higher than the line of credit borrowings. Commitment fees of 0.20% to 0.40% per annum are payable on the portion of the Facility capacity not in use at any given time on the line of credit. Commitment fees are included as interest in the consolidated statements of income.

Primarily because the leverage ratio was higher after the acquisition of HSE that occurred on July 11, 2012, interest rates in effect on July 11, 2012 were approximately 70 points higher than they were immediately prior to the acquisition.

On June 30, 2013, the LIBOR based rate on the line of credit portion of the Facility was LIBOR plus 1.50%, the prime based rate of the Facility was prime plus 0.50%, the LIBOR based rate on the term loan portion of the Facility was LIBOR plus 1.75% and the commitment fee was 0.25%. At June 30, 2013, $241.1 million was borrowed under the Facility at a weighted average interest rate of approximately 1.8% under the LIBOR options and $3.1 million was borrowed at 3.5% under the Canadian prime option. At June 30, 2013, the Company had approximately $105.7 million available for borrowing under the Facility.

The Facility expires on July 11, 2017. The Facility contains financial covenants defining various financial measures and levels of these measures with which the Company must comply. Covenant compliance is assessed as of each quarter end. Substantially all of the Company’s assets are pledged as collateral to secure the credit facility.