Debt

9 Months Ended

Sep. 30, 2012

Debt [Abstract]

Debt

7. Debt

ICG’s debt of $26.5 million and $15.5 million as of September 30, 2012 and December 31, 2011, respectively, related to its consolidated core companies and consisted primarily of a term loan at Procurian.

		September 30,			December 31,
	Interest Rates	2012			2011
		(in thousands)
Procurian term loan	1.99-3.09%	$	24,583		$	14,667
Other long-term debt	4.21-10.27%		2,795			224
Capital leases	2.25-4.0%		633			629
			28,011			15,520
Current maturities of long-term debt			(8,027	)		(4,759	)
Long-term debt, net of current maturities		$	19,984		$	10,761

Loan and Credit Agreements

On August 9, 2012, Procurian, a number of its wholly-owned subsidiaries and PNC Bank entered into an amended and restated term note that amended certain terms of the loan agreement between Procurian and PNC Bank dated August 3, 2010 that provides for a revolving line of credit and a term loan. Under the line of credit, which matures on August 2, 2015, Procurian may borrow up to $15.0 million and obtain up to $5.0 million of letters of credit, subject to specified fees and other terms. The line of credit is subject to a 0.25% per annum unused commitment fee that is payable to the bank quarterly. Under the term loan, Procurian borrowed $25.0 million (a $13.0 million increase from the August 9, 2012 original term loan balance of $12.0 million) in order to fund the ongoing operations of the company, as well as potential future acquisitions. Both the line of credit and the term loan have been secured by a first priority lien on the assets of the borrowing companies.

The term loan and the line of credit both bear interest, at Procurian’s option, at either (1) a base rate equal to the highest of PNC Bank’s prime rate, the sum of the Federal Funds Open Rates plus 0.5% and the sum of the daily LIBOR rate plus 1.0%, or (2) a daily to six month LIBOR rate plus a margin ranging from 1.5% to 2.0%, depending on the then-current debt-to-EBITDA ratio of the borrowing companies. Under the loan agreement, any outstanding principal and interest under the line of credit would become due and payable periodically through August 2, 2015, the principal under the term loan was payable in $0.4 million monthly installments through August 1, 2017, and any outstanding interest under the term loan would become due and payable periodically through August 1, 2017. There are no amounts outstanding under the line of credit; the amounts outstanding under the term loan as of December 31, 2011 and September 30, 2012 are set forth in the table above. The effective interest rate being paid by Procurian under the term loan, including the applicable margin, was 1.99% as of September 30, 2012.

On August 6, 2010, Procurian entered into an interest rate swap hedge agreement whereby 50% of the original term loan was effectively converted to a fixed interest rate of 1.34% by the hedge agreement. Procurian terminated the hedge agreement without penalty on August 1, 2012. On August 9, 2012, Procurian entered into a new interest rate swap hedge agreement, effectively converting $10.0 million of the balance of the term loan into a fixed interest rate loan. The interest rate swap hedge agreement becomes effective beginning on August 9, 2013.

On October 28, 2010, Channel Intelligence entered into a loan and security agreement with PNC Bank that provides for a $2.0 million revolving promissory note and a $0.5 million non-revolving promissory note. The borrowings under those facilities are to be used for the general operations of the company, including working capital and capital expenditures. Interest on the revolving promissory note and non-revolving promissory note are based on the one month LIBOR rate plus 4.0% and 4.5%, respectively; interest on those instruments are payable monthly. Principal payments related to the revolving promissory note are payable at maturity, which is December 31, 2012. Principal payments related to the non-revolving promissory note are payable in equal monthly installments through the October 31, 2014 maturity date. There was $2.0 million and $0.2 million outstanding under the revolving promissory note and the non-revolving promissory note, respectively, as of September 30, 2012. The effective interest rates of the revolving promissory note and the non-revolving promissory note as of September 30, 2012 were 4.21% and 4.71%, respectively.

On October 26, 2011, GovDelivery entered into a loan agreement with Venture Bank under which the company may borrow up to $1.0 million under a revolving line of credit that is secured by GovDelivery’s assets. The term of the line of credit expires on March 2, 2013. The line of credit bears interest at a base rate equal to the prime rate plus 2.0%, but in no case less than 7.0% (the interest rate at September 30, 2012 was 7.0%). No amounts were outstanding under the line of credit at September 30, 2012. There was $0.4 million outstanding on the line of credit at December 31, 2011.

On December 18, 2009, ICG entered into an amended and restated letter of credit agreement with Comerica Bank (the “LC Agreement”) that provides for the issuance of letters of credit of up to $10.0 million, subject to a cash-secured borrowing base, as defined by the LC Agreement. On December 16, 2011, ICG entered into an amendment to the LC Agreement to extend the term through December 14, 2012. Issuance fees of 0.50% per annum of the face amount of each letter of credit will be paid to Comerica Bank upon issuance. The LC Agreement is also subject to a 0.25% per annum unused commitment fee payable to the bank on a quarterly basis. No amounts were outstanding under those agreements at September 30, 2012 or December 31, 2011.