Note 6. Long-Term Debt

Long-term debt as of September 30, 2013 and December 31, 2012 consists of the following:

	September 30,			December 31,
	2013			2012
Senior Notes due March 2016	$	—		$	57,012,000
Senior Notes due July 2020	172,854,167			—
Less: current portion	(1,750,000		)	(4,608,000		)
	$	171,104,167		$	52,404,000

Senior Notes due July 2020: On July 30, 2013 certain of the Company’s subsidiaries entered into a credit agreement providing for a $175.0 million senior secured term loan B facility (the “Term Loan Facility”) which matures on July 30, 2020. The Term Loan Facility also provides an uncommitted accordion option (the “Incremental Facility”) allowing for additional borrowings under the Term Loan Facility up to an aggregate principal amount equal to (i) $20 million plus (ii) an additional amount up to 4.0x 1st lien net leverage. Pricing on the Term Loan Facility was set at LIBOR plus 500 basis points (with a LIBOR floor of 1.25%) and 1.0% of original issue discount (“OID”). The OID of $1.75 million, net of accumulated amortization of $41,667 as of September 30, 2013, is recorded as a reduction to the principal amount of the Term Loan Facility outstanding and will be amortized as a component of interest expense over the term of the Term Loan Facility. The proceeds of the loan were used to repay in full all outstanding debt obligations at the Company’s subsidiaries (the Senior Notes due March 2016 and June 2017), to pay fees and expenses associated with the financing, and for general corporate purposes including potential future acquisitions. The Company recorded $3.4 million of debt issue costs associated with the Term Loan Facility, net of accumulated amortization of $82,359 at September 30, 2013. In connection with the repayment of the Senior Notes due March 2016 and June 2017, the Company wrote off unamortized debt issuance costs of $1.6 million, which is recorded as a loss on the early extinguishment of debt in the accompanying condensed consolidated statements of operations.

The Term Loan Facility principal payments shall be payable on quarterly due dates commencing September 30, 2013 and a final installment on July 30, 2020. Amounts outstanding under the Term Loan Facility due as of September 30, 2013 and December 31, 2012 were $172,854,167 and $0, respectively.

In addition, pursuant to the terms of the Term Loan Facility, within 90 days after the end of each fiscal year (commencing with the fiscal year ending December 31, 2014), the Borrowers are required to make a prepayment of the loan principal in an amount equal to 50% of the excess cash flow of the most recently completed fiscal year. Excess cash flow is generally defined as net income plus depreciation and amortization expense, less mandatory prepayments of the term loan, interest charges, income taxes and capital expenditures, and adjusted for the change in working capital. The percentage of the excess cash flow used to determine the amount of the prepayment of the loan declines from 50% to 25% and again to 0% at lower leverage ratios.

Senior Notes due March 2016: On March 31, 2011, InterMedia Español, Inc. and Televicentro of Puerto Rico, LLC, collectively referred to in this note as the “Borrowers”, entered into a loan agreement that included a $66,000,000 term loan and a $10,000,000 revolving credit line with a maturity of March 31, 2016. The loan was guaranteed by WAPA Holdings, LLC, the direct holding company of InterMedia Español, Inc. and Televicentro of Puerto Rico, LLC, and its wholly-owned subsidiaries other than the Borrowers and secured by a first-priority perfected lien on all capital stock of and equity interests in each of the Borrowers and all other property and assets (tangible and intangible) of the Borrowers, whenever acquired and wherever located, subject to certain exceptions.

The loan was repaid in full in connection with the closing of the Term Loan Facility as discussed above. Amounts outstanding under the term loan due as of September 30, 2013 and December 31, 2012 were $0 and $57,012,000, respectively.

There was an annual commitment fee of 0.75%, paid quarterly, on the revolving credit line for the unfunded amounts calculated daily as the amount by which the aggregate revolving credit line limit exceeds the aggregate outstanding unpaid principal amount. The commitment fees were approximately $3,082 and $18,904 for the three months ended September 30, 2013 and 2012, respectively, and $40,274and $56,506 for the nine months ended September 30, 2013 and 2012, respectively. The revolving credit line was terminated on July 30, 2013 in connection with the closing of the Term Loan Facility. As of September 30, 2013 and December 31, 2012, there were no outstanding balances due under the revolving credit commitment.

On April 13, 2011, WAPA entered into a two-year interest rate swap agreement with an initial notional amount of $33,000,000 to receive interest at a variable rate equal to three (3) months LIBOR and to pay interest at a fixed rate of 1.143%. The interest rate swap agreement expired on April 15, 2013. As of September 30, 2013 and December 31, 2012, this interest rate swap agreement had a fair value of $0 and $122,032, respectively, and is recognized in other accrued expenses on the consolidated balance sheets. The Company recognized additional financing income of $0 and $29,087 for the three months ended September 30, 2013 and 2012, respectively, and $122,032 and $62,146 for the nine months ended September 30, 2013 and 2012, respectively, related to the change in the fair value of the interest rate swap agreement, which is included in interest expense, net on the consolidated statements of operations.

Senior Notes due June 2017: During 2011, Cinelatino amended its credit facility with a financial institution and maximum borrowings were increased to $40,000,000. The loan was collateralized by the Cinelatino’s assets and common stock, which the stockholder has pledged, and was guaranteed by the Company’s subsidiary. The loan was repaid in full in connection with the closing of the Term Loan Facility on July 30, 2013 as discussed above. Amounts outstanding under the term loan due as of September 30, 2013 and December 31, 2012 were $0 and $0, respectively.

The carrying value of the long-term debt approximates fair value at September 30, 2013 and December 31, 2012. The estimated fair value of our variable-rate debt is derived from quoted market prices by independent dealers (Level 2 in the fair value hierarchy under ASC 820, Fair Value Measurements and Disclosures).

Following are maturities of long-term debt, as of September 30, 2013:

Year Ending
December 31,
Remainder of 2013	$	437,500
2014	1,750,000
2015	1,750,000
2016	1,750,000
2017 and thereafter	168,875,000
	$	174,562,500