Debt

3 Months Ended

Mar. 31, 2020

DEBT

The Company’s borrowings consist of the following:



	As of
	March 31, 2020			December 31, 2019
(in thousands)	March 31, 2020			December 31, 2019
5.75% unsecured notes due June 1, 2026 ⁽¹⁾	$	395,572		$	395,393
U.K. credit facility ⁽²⁾	74,358			78,650
Commercial note	26,750			27,500
Pinnacle Bank term loan	11,109			11,203
Pinnacle Bank line of credit	500			—
Other indebtedness	603			83
Total Debt	$	508,892		$	512,829
Less: current portion	(78,575		)	(82,179		)
Total Long-Term Debt	$	430,317		$	430,650

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(1)	The carrying value is net of $4.4 million and $4.6 million of unamortized debt issuance costs as of March 31, 2020 and December 31, 2019, respectively.


(2)	The carrying value is net of $0.1 million of unamortized debt issuance costs as of December 31, 2019.

The Company’s GHG subsidiary had $0.5 million outstanding under its line of credit as of March 31, 2020 at an interest rate of 4.27%. The Company’s other indebtedness at March 31, 2020 is at interest rates of 0% to 2% and matures between 2021 and 2026. The Company’s other indebtedness at December 31, 2019 is at an interest rate of 2% and matures in 2026.

On December 2, 2019, a subsidiary of GHG entered into a Loan & Security Agreement with Pinnacle Bank for a Term Loan of $11.25 million and a two-year Line of Credit for $2.25 million. The Term Loan is payable over a five-year period in monthly installments, plus accrued and unpaid interest, due on the second day of each month, with the remaining balance due on December 2, 2024. The Term Loan bears interest at 4.35% per annum. The Term Loan can be redeemed at any time, in whole or in part, without any premium or penalty. Borrowings on the Line of Credit bear interest at a rate per annum of LIBOR plus an applicable interest rate of 2.75%, determined on a monthly basis. Under the credit agreement, the borrower is required to pay a commitment fee on a quarterly basis, at the rate per annum equal to 0.25% on the average daily unused portion of the credit facility. The borrower may use the proceeds of the facility for working capital and general corporate purposes. Any outstanding borrowings must be repaid on or prior to the final termination date. The agreement contains terms and conditions, including remedies in the event of a default. The Company is in compliance with all financial covenants as of March 31, 2020.

On January 31, 2019, the Company’s automotive subsidiary entered into a Commercial Note with SunTrust Bank in an aggregate principal amount of $30 million. The Commercial Note is payable over a 10 year period in monthly installments of $0.25 million, plus accrued and unpaid interest, due on the first of each month, with a final payment on January 31, 2029. The Commercial Note bears interest at LIBOR plus an applicable interest rate of 1.75% or 2%

per annum, in each case determined on a quarterly basis based upon the automotive subsidiary’s Adjusted Leverage Ratio. The Commercial Note contains terms and conditions, including remedies in the event of a default by the automotive subsidiary. On the same date, the Company’s automotive subsidiary entered into an interest rate swap agreement with a total notional value of $30 million and a maturity date of January 31, 2029. The interest rate swap agreement will pay the automotive subsidiary variable interest on the $30 million notional amount at the one-month LIBOR, and the automotive subsidiary will pay counterparties a fixed rate of 2.7%, effectively resulting in a total fixed interest rate of 4.7% on the outstanding borrowings at the current applicable margin of 2.0%. The interest rate swap agreement was entered into to convert the variable rate borrowing under the Commercial Note into a fixed rate borrowing. Based on the terms of the interest rate swap agreement and the underlying borrowing, the interest rate swap was determined to be effective and thus qualifies as a cash flow hedge. As such, changes in the fair value of the interest rate swap are recorded in other comprehensive income on the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of cash flows.

During the three months ended March 31, 2020 and 2019, the Company had average borrowings outstanding of approximately $511.4 million and $494.4 million, respectively, at an average annual interest rate of approximately 5.1%. During the three months ended March 31, 2020 and 2019, the Company incurred net interest expense of $6.5 million and $5.7 million, respectively.

At March 31, 2020, the fair value of the Company’s 5.75% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $384.5 million, compared with the carrying amount of $395.6 million. At December 31, 2019, the fair value of the Company’s 5.75% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $427.7 million, compared with the carrying amount of $395.4 million. The carrying value of the Company’s other unsecured debt at March 31, 2020 and December 31, 2019 approximates fair value.