Revolving Credit Facility, Term Loan, and the Notes

3 Months Ended

Mar. 31, 2015

Revolving Credit Facility, Term Loan, and the Notes

Revolving Credit Facility, Term Loan, and the Notes

4. Revolving Credit Facility, Term Loan, and the Notes

Credit Facility and Term Loan

The Company has an amended credit facility with a lender syndicate that provides for a $210.0 million Term Loan and a $30.0 million revolving credit facility.  The amended revolving credit facility matures on January 14, 2018. At December 31, 2014, and March 31, 2015, the Company had no outstanding borrowings under the revolving credit facility.

The amended credit agreement contains a number of affirmative and negative covenants.  The Company was in compliance with these covenants as of March 31, 2015.

At December 31, 2014, and March 31, 2015, the outstanding balance under the Term Loan, net of unamortized discount, was $118.2 million and $98.3 million, respectively. The Company made principal payments of $25.0 million and $20.0 million under the Term Loan during the three months ended March 31, 2014 and 2015, respectively.

Interest expense under the Term Loan was $1.8 million and $1.5 million for the three months ended March 31, 2014 and 2015, respectively. The effective interest rate was approximately 4.97% and 5.25% during the three months ended March 31, 2014 and March 31, 2015, respectively. The weighted average nominal interest rate was approximately 4.05% during each of the three-month periods ended March 31, 2014 and March 31, 2015.

Interest expense under the revolving credit facility for both the three months ended March 31, 2014 and 2015, was $0. One letter of credit was outstanding in the amount of $202,000 at both December 31, 2014, and March 31, 2015. Commitment fees on the revolving credit facility are payable on the unused revolving credit commitment at the rate of 0.50% per annum, payable quarterly. Commitment fee expense for each of the three-month periods ended March 31, 2014 and 2015, was $37,000.

The Notes

The Company was in compliance with its covenants related to the Notes as of March 31, 2015.

Interest expense under the Notes was $8.1 million and $7.3 million for the three months ended March 31, 2014 and 2015, respectively. After giving effect to the amortization of associated debt issuance costs, the effective interest rate of the Notes was approximately 11.0% during both the three months ended March 31, 2014 and 2015.

Debt Service Requirements

Debt service requirements, including estimated future interest, for each of the five years subsequent to March 31, 2015 and the period thereafter, are as follows:

	Payments Due by Period
	Total		Year 1		Year 2		Year 3		Year 4		Year 5
Notes, due July 15, 2019	$	399,789	$	28,508	$	28,508	$	28,508	$	28,508	$	285,757
Term Loan, due July 14, 2018	112,933		4,052		4,041		4,041		100,799		—
	$	512,722	$	32,560	$	32,549	$	32,549	$	129,307	$	285,757

Guarantees

Because Crown Media Holdings has no independent assets or operations, the guarantees by the subsidiary guarantors are full and unconditional, as well as joint and several. There are no subsidiaries of Crown Media Holdings that are not subsidiary guarantors.  With certain exceptions described in the Form 10-K for the year ended December 31, 2014, the Indenture and the amended credit agreement impose restrictions on the payment of dividends by Crown Media Holdings and the subsidiary guarantors.