NOTE 4 – LONG-TERM DEBT

Debt consisted of the following (in thousands):


	As of March 31,			As of December 31,
	2017			2016
Term loans, in effect, net of unamortized debt issuance costs of
$399 and $447, respectively	$	94,601		$	95,803
Delayed draw term loans, in effect, net of unamortized debt issuance costs of $499 and $50, respectively		124,501			12,450
Vehicle and equipment notes, maturing March 2022; payable in various monthly installments, including interest rates ranging from
2% to 4%		40,311			38,186
Various notes payable, maturing through March 2025; payable in various installments, including interest rates ranging from 4% to 6%		4,764			4,988

		264,177			151,427
Less: current maturities		(27,350	)		(17,192	)

Long-term debt, less current maturities	$	236,827		$	134,235

On February 29, 2016, we entered into a Credit and Security Agreement (the “Credit and Security Agreement”) with the lenders named therein. The Credit and Security Agreement amended and restated our previous credit agreement (the “2015 Credit Agreement”), which was scheduled to mature in April 2020. We used a portion of the funds from the Credit and Security Agreement to pay off the outstanding balances under the 2015 Credit Agreement. The Credit and Security Agreement provided for a five-year senior secured credit facility in an aggregate principal amount of up to $325.0 million, consisting of a $100.0 million revolving line of credit (the “Revolving LOC”), a $100.0 million term loan (the “Term Loan”) and a delayed draw term loan facility (the “DDTL”) providing for up to $125.0 million in additional term loan draws during the first year of the Credit and Security Agreement. Under the Revolving LOC, up to an aggregate of $20.0 million was available to us for the issuance of letters of credit and up to an aggregate of $5.0 million was available to us for swing line loans. The Credit and Security Agreement also included an accordion feature which allowed us, at our option but subject to lender and certain other approvals, to add up to an aggregate of $75.0 million in principal amount of term loans or additional revolving credit commitments, subject to the same terms as the Revolving LOC and Term Loan. As of March 31, 2017, there were approximately $17.9 million in letters of credit issued and no borrowings outstanding under the Revolving LOC. All of the obligations under the Credit and Security Agreement were guaranteed by our material domestic subsidiaries, other than Suburban Insulations, Inc.

Loans under the Credit and Security Agreement bore interest at either the eurodollar rate (“LIBOR”) or the base rate (which approximates prime rate), at our election, plus a margin based on the type of rate applied and our leverage ratio. At December 31, 2016, the outstanding balances on the Term Loan and DDTL bore interest at 1-month LIBOR, including margin (2.5%), and at March 31, 2017, the outstanding balances on the Term Loan and the DDTL bore interest at 1-month LIBOR, including margin (2.69%). In addition to interest, we were required to pay commitment fees on the unused portion of the Revolving LOC. The commitment fee rate for the period from February 29, 2016 through August 31, 2016 was 22.5 basis points. Thereafter, the commitment fee rate, like the interest rate spreads, was subject to adjustment based on our leverage ratio, with possible future commitment fees ranging from 20 to 30 basis points per annum. The commitment fee rate from September 1, 2016 to December 31, 2016 was 22.5 basis points and the rate from January 1, 2017 to March 31, 2017 was 25.0 basis points. We were also required to pay a ticking fee of 37.5 basis points per annum on the unused portion of the DDTL until it was fully drawn in January 2017. Any outstanding principal balances on the Term Loan and DDTL would have been due on February 28, 2021.

The Credit and Security Agreement contained covenants that required us to (1) maintain a fixed charge coverage ratio of not less than 1.10 to 1.00 and (2) maintain a leverage ratio of no greater than (a) 3.50 to 1.00 through December 30, 2016; (b) 3.25 to 1.00 on December 31, 2016 through June 29, 2017; (c) 3.00 to 1.00 on June 30, 2017 through December 30, 2017; (d) 2.75 to 1.00 on December 31, 2017 through June 29, 2018; and (e) 2.50 to 1.00 on June 30, 2018 and thereafter. The Credit and Security Agreement also contained various restrictive non-financial covenants and a provision that, upon an event of default (as defined by the Credit and Security Agreement), amounts outstanding under the Credit and Security Agreement would bear interest at the rate as determined above plus 2.0% per annum.

On April 13, 2017 we entered into a term loan agreement for $300 million and an asset-based lending credit agreement for $100 million with up to $50 million for letters of credit (the “Senior Secured Credit Facilities”) with a bank group. We used a portion of the funds from the Senior Secured Credit Facilities to pay off the outstanding balances under our Credit and Security Agreement. See Note 13, Subsequent Events for further information.

Vehicle and Equipment Notes

We are party to a Master Loan and Security Agreement (“Master Loan and Security Agreement”), a Master Equipment Lease Agreement (“Master Equipment Agreement”) and one or more Master Loan Agreements (“Master Loan Agreements”) with various lenders to provide financing for the purpose of purchasing or leasing vehicles and equipment used in the normal course of business. Each financing arrangement under these agreements constitutes a separate note and obligation. Vehicles and equipment purchased or leased under each financing arrangement serve as collateral for the note applicable to such financing arrangement. Regular payments are due under each note for a period of typically 60 consecutive months after the incurrence of the obligation. The specific terms of each note are based on specific criteria, including the type of vehicle or equipment and the market interest rates at the time. No termination date applies to these agreements.

Total gross assets relating to our master loan and equipment agreements were $50.0 million and $48.7 million as of March 31, 2017 and December 31, 2016, respectively, none of which were fully depreciated as of March 31, 2017 or December 31, 2016, respectively. The net book value of assets under these agreements was $36.7 million and $38.0 million as of March 31, 2017 and December 31, 2016, respectively. Depreciation of assets held under these agreements is included within cost of sales on the Condensed Consolidated Statements of Operations.