Debt

3 Months Ended

Mar. 31, 2020

Note 6: Debt

The Company’s debt consisted of the following as of the periods indicated in the table below (in thousands):


	March 31, 2020														December 31, 2019
	Principal amount		Discount		Debt issuance costs		Net carrying value		Principal amount		Discount		Debt issuance costs		Net carrying value
Senior secured credit facility	$	444,375	$	(1,297)	$	(5,328)	$	437,750	$	399,687	$	(1,366)	$	(5,608)	$	392,713
Less: Current portion of long-term debt, net							(56,229)								(11,228)
Long-term debt, net							$	381,521							$	381,485

In May 2017, we entered into a credit agreement (as the same has been amended, the “Credit Agreement”) with a syndicate of lenders that provides for a term loan facility (the “Term Loan”) and a revolving line of credit (including a letter of credit sub-facility) (the “Revolver”) for working capital, capital expenditures, and general business purposes (as amended, the “Senior Secured Credit Facility”). We increased the outstanding principal amount of the Term Loan by $125.0 million to finance the 1st Global Acquisition, and after giving effect to such increase, the Senior Secured Credit Facility provides for up to $565.0 million, consisting of a committed $65.0 million under the Revolver and a $500.0 million Term Loan that mature on May 22, 2022 and May 22, 2024, respectively. Obligations under the Senior Secured Credit Facility are guaranteed by certain of the Company’s subsidiaries and secured by substantially all the assets of the Company and certain of its subsidiaries.

As of March 31, 2020, we had $389.4 million and $55.0 million in principal amount outstanding under the Term Loan and the Revolver, respectively. For the three months ended March 31, 2020, our total borrowings under the Revolver increased from $10.0 million to $55.0 million, which consisted of $55.0 million of additional borrowings, partially offset by $10.0 million of payments on the Revolver. Based on aggregate loan commitments as of March 31, 2020, approximately $10.0 million was available for future borrowing under the Senior Secured Credit Facility applicable to the Company. On April 23, 2020, we made a $37.0 million payment to reduce the outstanding principal balance on the Revolver to $18.0 million.

The interest rate on the Term Loan is variable at the London Interbank Offered Rate, plus the applicable interest rate margin of 3.00% for Eurodollar Rate loans and 2.00% for ABR loans.

Commencing December 31, 2019, principal payments of the Term Loan are due on a quarterly basis in an amount equal to $0.3 million (subject to reduction for prepayments), with the remaining principal amount due on the maturity date of May 22, 2024. We have the right to prepay the Term Loan and outstanding amounts under the Revolver without any premium or penalty (other than customary Eurodollar breakage costs). Prepayments on the Term Loan are subject to certain prepayment minimums. We may be required to make annual prepayments on the Term Loan in an amount equal to a percentage of excess cash flow of the Company during the applicable fiscal year from 0% to 50%, depending on the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement) for such fiscal year. For the three months ended March 31, 2020, we made prepayments of $0.3 million towards the Term Loan.

Depending on the Consolidated First Lien Net Leverage Ratio, the applicable interest rate margin on the Revolver is from 2.75% to 3.25% for Eurodollar Rate loans and 1.75% to 2.25% for ABR loans. Interest is payable at the end of each interest period.

The Senior Secured Credit Facility includes financial and operating covenants, including a Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) that governs the Revolver. On May 1, 2020, we entered into Amendment No. 3 to the Credit Agreement (the “Credit Agreement Amendment”). Pursuant to the Credit Agreement Amendment, the Credit Agreement was amended to, among other things: (i) provide that, during the period commencing on the effective date of the Credit Agreement Amendment and ending on December 31, 2020

(the “Third Amendment Relief Period”), if an advance under the Revolver is requested, then the Company must be in pro forma compliance with certain covenants, (ii) provide that, for purposes of determining compliance with the Consolidated Total Net Leverage Ratio for the Revolver, during the Third Amendment Relief Period certain limitations to add-backs do not apply when calculating Consolidated EBITDA (as defined in the Credit Agreement), (iii) solely with respect to the Revolver, add restrictions on certain restricted payments during the Third Amendment Relief Period, and (iv) solely with respect to the Revolver, if the Revolver usage is over $0 on the last day of any calendar quarter during the Third Amendment Relief Period, impose a minimum liquidity financial covenant that requires the Company and its Restricted Subsidiaries (as defined in the Credit Agreement) to maintain liquidity of at least $115.0 million on the last day of such quarter. Solely with respect to the Revolver and solely if the Revolver usage exceeds $0 on the last day of any calendar quarter during the Third Amendment Relief Period, the Credit Agreement Amendment increases the maximum Consolidated Total Net Leverage Ratio to (i) 5.75 to 1.00 for the fiscal quarter ending June 30, 2020 and (ii) 3.75 to 1.00 for the fiscal quarters ending September 30, 2020 and December 31, 2020.