Debt

The Company's debt obligations consist of the Secured Credit Facility with J.P. Morgan Chase Bank, N.A. (the “Credit Facility”) and the J.P. Morgan Chase Bank, N.A. Secured Term Loan (the "Term Loan"). The Company’s short- and long-term debt obligations as of June 29, 2019 and September 29, 2018 was as follows:



	June 29, 2019					September 29, 2018
	Rate		Balance			Rate		Balance
(dollars in thousands)
J.P. Morgan Chase Bank, N.A Secured Term Loan ⁽¹⁾	5.1	%	$	40,000		4.8	%	$	40,000
Unamortized debt issuance costs ⁽²⁾			(179		)			(236		)
Total indebtedness			39,821					39,764
Less short-term portion			(11,667		)			(6,667		)
Long-term debt			$	28,154				$	33,097


(1)	Bears interest at a variable rate equal to an adjusted LIBOR plus 2.25% and is payable quarterly. Due in October 2021, with quarterly principal payments beginning in July 2019.


(2)	Debt issuance costs are recorded as a debt discount and recorded as interest expense over the term of the agreement.

The Credit Facility allows the Company to borrow up to $80.0 million restricted to the value of the borrowing base which is based on the value of inventory and accounts receivable and is subject to monthly redetermination. The Credit Facility matures in October 2021 and may be drawn as Commercial Bank Floating Rate Loans (at the higher of prime rate or adjusted LIBOR plus 2.50%) or Eurocurrency Loans (at LIBOR plus an applicable margin). As of both June 29, 2019 and September 29, 2018, the Company did not have any outstanding borrowings and had $4.5 million in undrawn letters of credit that reduce the availability under the Credit Facility.

Debt obligations under the Credit Facility and the Term Loan require the Company to maintain a consolidated fixed charge ratio of at least 1.0, restrict distribution of dividends unless certain conditions are met, such as having a fixed charge ratio of at least 1.15, and require financial statement reporting and delivery of borrowing base certificates. As of June 29, 2019 and September 29, 2018, the Company was in compliance with all financial covenants. The Credit Facility and the Term Loan are collateralized by eligible inventory and accounts receivable of the Company, as well as the Company's intellectual property including patents and trademarks.