Debt

3 Months Ended

Mar. 31, 2020

NOTE J—DEBT

At March 31, 2020 and December 31, 2019, debt (in thousands) consisted of the following:



	March 31, 2020			December 31, 2019
Senior secured credit facility:
Revolver expiring May 1, 2023 (6.25% at March 31, 2020 and 7.75% at December 31, 2019)	$	25,000		$	—
Term Loan—final maturity May 1, 2025 (5.0% at March 31, 2020 and 5.81% at December 31, 2019)	1,244,400			1,247,600
Less: Unamortized original issue discount	(5,152		)	(5,412		)
Less: Unamortized debt issuance cost	(24,100		)	(25,390		)
Note payable secured by royalty interest	10,259			10,438
Insurance financing notes payable	1,998			5,055
Equipment notes payable	54			87
Finance leases	38			70
Total debt	1,252,497			1,232,448
Less: current portion	(40,233		)	(18,463		)
Total long-term portion of debt	$	1,212,264		$	1,213,985

Senior Secured Credit Facility

On May 1, 2018, we entered into a Third Amended and Restated Credit Agreement (the "Credit Agreement"), which increased our existing senior debt by entering into a new $1.380 billion senior secured credit facility, consisting of a $1.280 billion term loan (the "Term Loan") and a $100 million revolving credit facility (the "Revolver") (collectively the "Credit

Facility) that may also be used for swingline loans or letters of credit, and we may elect to increase the term loan in accordance with the terms of the Credit Agreement. Borrowings under the Credit Agreement will bear interest at variable rates as determined at our election, at LIBOR or a base rate, in each case, plus an applicable margin. In addition, under the Credit Agreement, we are required to pay a per annum facility fee and fees for letters of credit. The Credit Agreement is secured by substantially all of our assets and of our domestic subsidiaries' assets and a pledge of the equity interests in such entities. The Term Loan matures on May 1, 2025, and the Revolver expires May 1, 2023. We capitalized $38.7 million in debt issuance costs and original issue discount as a result of the new Credit Agreement.

The Credit Facility contains covenants that, among other things, limit our ability, and certain of our subsidiaries' abilities, to create, incur or assume indebtedness and liens, to make acquisitions or investments, to sell assets and to pay dividends. The Credit Agreement also requires us to maintain a consolidated leverage ratio of no more than 3.75:1.00 as of the last day of any fiscal quarter whenever usage of the Revolver (other than certain undrawn letters of credit) exceeds 30% of the Revolver commitment. These covenants are subject to a number of important exceptions and qualifications. The Credit Agreement includes events of default and other affirmative and negative covenants that are usual for facilities and transactions of this type.

As of March 31, 2020 and December 31, 2019, we are in compliance with all covenants in accordance with our senior secured Credit Facility.

Term Loan

At March 31, 2020, contractual maturities of our Term Loan (in thousands) are as follows:



2020 (remaining nine months)	$	9,600
2021	12,800
2022	12,800
2023	12,800
2024	12,800
Thereafter	1,183,600
Total	$	1,244,400

Revolving Line-of-Credit

We have a $100.0 million Revolver with $25.0 million drawn and $6.5 million allocated for letters of credit as of March 31, 2020, leaving $68.5 million available under the Revolver. We have the intent and ability to repay the amounts outstanding on the Revolver within one year, therefore, the outstanding balance as of March 31, 2020 has been classified as current.

Based on our consolidated leverage ratio of 4.71:1.00 as of March 31, 2020, we may draw up to $30.0 million without the consent of our lenders. With the consent of our lenders, we have access to the full availability of the Revolver.

Note Payable Secured by Royalty Interest

In conjunction with the acquisition of New Birmingham, Inc. in August 2016, we assumed a note payable secured by a royalty interest. The monthly royalty payment is calculated based on future tonnages and sales related to the sand shipped from our Tyler, Texas facility. The note payable is due by June 30, 2032. The note does not provide a stated interest rate. The minimum payments (in thousands) for the next five years and thereafter required by the note are as follows:



2020 (remaining nine months)	$	248
2021	380
2022	437
2023	502
2024	572
Thereafter	8,120
Total	$	10,259

Under this agreement once a certain number of tons have been shipped from the Tyler facility, the minimum payments will decrease to $0.5 million per year, subject to proration in the period this threshold is met.

The royalty note payable fair value was estimated to be $22.5 million on the acquisition date. The estimate was made using a discounted cash flow model, which calculated the present value of projected future cash payments required under the agreement using a discounted rate of 14%, which is also the effective rate as of March 31, 2020. As of March 31, 2020, the note payable had a balance of $10.3 million. Changes in fair value of the note payable amount may result if estimates of future tonnages and sales increase or decrease.

Insurance Financing Notes Payable

During September 2019, the Company renewed its insurance policies and financed the payments through notes payable with a stated interest rate of 4.5%. These payments will be made in installments throughout a 10-month period and, as such, have been classified as current debt. As of March 31, 2020, the notes payable had a balance of $2.0 million.