6. Long-Term Debt

Long-term debt consisted of the following (dollars in thousands):


	Average Interest Rate		Final	March 31,		December 31,
	March 31, 2018		Maturity	2018		2017
Term loan A-1	5.52	%	May 4, 2022	$	86,070	$	87,750
Term loan A-2	5.77		May 4, 2023		224,242		227,125
Debt issue costs and issue discount					(5,258)		(5,559)
					305,054		309,316
Current					10,250		10,250
Noncurrent				$	294,804	$	299,066

In February 2017, the Company entered into a delayed draw credit agreement for new term loans and a new revolving credit facility. The new facility fully funded the repayment of the existing term loan and replacement of the existing revolving credit on May 4, 2017. Included in the new facility is a term loan A-1 for $90.0 million with quarterly principal payments of $1.1 million with the balance due at maturity in May 2022. Interest, payable at least quarterly, is at the Alternate Base Rate plus a margin of 2.75% or a Eurocurrency rate plus a margin of 3.75%. In addition, the facility provides for a second term loan A-2 for $230.0 million with quarterly principal payments of $1.4 million for the first eight quarters and $2.9 million per quarter thereafter with the balance due at maturity in May 2023. Interest, payable at least quarterly, is at the Alternate Base Rate plus a margin of 3.0% or a Eurocurrency rate plus a margin of 4.0%.

The new facility also provides for a line of credit in the amount of $30.0 million with maturity in May 2022. A commitment fee is payable quarterly to the lender under the facility. Interest on the line of credit is at the Alternate Base Rate plus a margin of 2.75% or a Eurocurrency rate plus a margin of 3.75%. There were no drawings as of or for the period ended March 31, 2018 on the new line of credit.

The interest rate margins on the facility are subject to a decrease of 0.25% with a defined improvement in the Company’s leverage ratio. The obligations under the bank facilities are guaranteed by the Company and each subsidiary with certain exceptions. In addition, the bank credit facilities are collateralized by substantially all of the Company’s assets.

The bank credit facilities contain various negative and affirmative covenants that restrict, among other things, incurrence of additional indebtedness, payment of dividends, redemptions of stock, other distributions to shareholders and sales of assets. In addition, there are financial covenants which have the following metrics as of March 31, 2018: debt service coverage with minimum allowed ratio of 2.75:1 of earnings before interest, taxes, depreciation and amortization to debt service which includes scheduled principal payments and cash interest; leverage with a maximum allowed ratio of 3.25:1 of indebtedness to earnings before interest, taxes, depreciation and amortization; and a maximum level of annual capital expenditures of $105.0 million. The Company was in compliance with these covenants as of March 31, 2018. On May 7, 2018, the Company amended the credit facility to modify the leverage ratio to maintain the maximum allowed ratio of 3.25:1 through the December 31, 2018 test date. To maintain compliance with the leverage ratio, the Company will also consider making additional debt payments as needed to reduce the indebtedness component of the ratio computation.

The Company had a revolving credit facility which was repaid and terminated on May 4, 2017. Drawings for the three months ended March 31, 2017 amounted to $6.0 million. Such draws were used primarily to fund the construction of the Company’s jointly-owned SEA-US submarine cable system.

One of the syndicated lenders in both the new term loan and the term loan retired is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company recognizes the patronage, generally as declared, as a reduction of interest expense. The stock component is recognized at its stated cost basis with the accumulated stock investment included in other noncurrent assets. The investment balance as of March 31, 2018 was not significant.

Maturities

The annual requirements for principal payments on long-term debt as of March 31, 2018 are as follows (dollars in thousands):


Year ended December 31,
2018 (remaining months)	$	7,688
2019		13,125
2020		16,000
2021		16,000
2022		81,250
Thereafter		176,249
	$	310,312

Capitalized Interest

Interest capitalized by the Company amounted to $0.3 million and $0.5 million for the three months ended March 31, 2018 and 2017, respectively.