Debt

12 Months Ended

Dec. 30, 2017

(8) Debt

Debt consisted of the following as of December 30, 2017 and December 31, 2016:


	2017		2016
Term Loan, due 2024:
$635.4 million and $640.3 million, net of $1.6 million and $2.6 million discount at December 30, 2017 and December 31, 2016, respectively	$	633,805	$	637,658
81⁄₂% Senior Notes, due 2022		250,000		250,000
61⁄₈% Senior Notes, due 2023:
$650.0 million, net of $1.4 million and $1.6 million discount at December 30, 2017 and December 31, 2016, respectively		648,650		648,407
51⁄₈% Senior Notes, due 2025		300,000		—
Total		1,832,455		1,536,065
Current portion of long-term debt		4,765		6,500
Long-term debt	$	1,827,690	$	1,529,565

The contractual payments of long-term debt, including current maturities, for the five years subsequent to December 30, 2017, are as follows:


2018	$	4,765
2019		6,354
2020		7,942
2021		6,354
2022		256,354
Thereafter		1,553,606
Total		1,835,375
Less: Original issue net discount		(2,920)
Less: Capitalized loan costs		(16,857)
Total debt	$	1,815,598

Senior Notes— On June 1, 2017, Summit LLC and Summit Finance (together, the “Issuers”) issued $300.0 million of 51⁄₈% senior notes due June 1, 2025 (the “2025 Notes”). The 2025 Notes were issued at 100.0% of their par value with proceeds of $295.4 million, net of related fees and expenses. The 2025 Notes were issued under an indenture dated June 1, 2017 (as amended and supplemented, the “2017 Indenture”). The 2017 Indenture contains covenants limiting, among other things, Summit LLC and its restricted subsidiaries’ ability to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter inter certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The 2017 Indenture also contains customary events of default. Interest on the 2025 Notes is payable semi-annually on June 1 and December 1 of each year commencing on December 1, 2017.

In 2016, the Issuers issued $250.0 million of 8.500% senior notes due April 15, 2022 (the “2022 Notes”). The 2022 Notes were issued at 100.0% of their par value with proceeds of $246.3 million, net of related fees and expenses. The proceeds from the sale of the 2022 Notes were used to fund the acquisition of Boxley Materials Company, replenish cash used for the acquisition of American Materials Company and pay expenses incurred in connection with these acquisitions. The 2022 Notes were issued under an indenture dated March 8, 2016, the terms of which are generally consistent with the 2017 Indenture. Interest on the 2022 Notes is payable semi-annually in arrears on April 15 and October 15 of each year.

In 2015, the Issuers issued $650.0 million of 6.125% senior notes due July 2023 (the “2023 Notes” and collectively with the 2022 Notes and the 2025 Notes, the “Senior Notes”). Of the aggregate $650.0 million of 2023 Notes, $350.0 million were issued at par and $300.0 million were issued at 99.375% of par. The 2023 Notes were issued under an indenture dated July 8, 2015, the terms of which are generally consistent with the 2017 Indenture. Interest on the 2023 Notes is payable semi-annually in arrears on January 15 and July 15 of each year.

In April, August and November 2015, $288.2 million, $183.0 million and $153.8 million, respectively, in aggregate principal amount of the then outstanding 10 1/₂% senior notes due January 31, 2020 (the “2020 Notes”) were redeemed at a price equal to par plus an applicable premium and the indenture under which the 2020 Notes were issued was satisfied and discharged. As a result of the redemptions, net charges of $56.5 million were recognized for the year ended January 2, 2016. The fees included $66.6 million for the applicable prepayment premium and $11.9 million for the write-off of deferred financing fees, partially offset by $22.0 million of net benefit from the write-off of the original issuance net premium.

As of December 30, 2017 and December 31, 2016, the Company was in compliance with all financial covenants under the applicable indentures.

Senior Secured Credit Facilities— Summit LLC has credit facilities that provide for term loans in an aggregate amount of $650.0 million and revolving credit commitments in an aggregate amount of $235.0 million (the “Senior Secured Credit Facilities”). Under the Senior Secured Credit Facilities, required principal repayments of 0.25% of the refinanced aggregate amount of term debt are due on the last business day of each March, June, September and December commencing with the March 2018 payment. The unpaid principal balance is due in full on the maturity date, which is November 21, 2024.

On January 19, 2017, Summit LLC entered into Amendment No. 1 (“Amendment No. 1”) to the credit agreement governing the Senior Secured Credit Facilities (the “Credit Agreement”), which, among other things, reduced the applicable margin in respect of then outstanding $640.3 million principal amount of term loans thereunder. All other material terms and provisions remain substantially identical to the terms and provisions in place immediately prior to the effectiveness of Amendment No. 1. On November 21, 2017, Summit LLC entered into Amendment No. 2 to the Credit Agreement, which, among other things, extended the maturity date from 2022 to 2024 and reduced the applicable margin in respect of the $635.4 million outstanding principal amount of term loans thereunder.

The revolving credit facility bears interest per annum equal to, at Summit LLC’s option, either (i) a base rate determined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A. and (c) LIBOR plus 1.00%, plus an applicable margin of 2.25% for base rate loans or (ii) a LIBOR rate determined by reference to Reuters prior to the interest period relevant to such borrowing adjusted for certain additional costs plus an applicable margin of 3.25% for LIBOR rate loans.

There were no outstanding borrowings under the revolving credit facility as of December 30, 2017 or December 31, 2016. As of December 30, 2017 we had remaining borrowing capacity of $218.9 million under the revolving credit facility, which is net of $16.1 million of outstanding letters of credit. The outstanding letters of credit are renewed annually and support required bonding on construction projects and the Company’s insurance liabilities.

Summit LLC’s Consolidated First Lien Net Leverage Ratio, as such term is defined in the Credit Agreement, should be no greater than 4.75:1.0 as of each quarter-end. As of December 30, 2017 and December 31, 2016, Summit LLC was in compliance with all financial covenants under the Credit Agreement.

Summit LLC’s wholly-owned domestic subsidiary companies, subject to certain exclusions and exceptions, are named as subsidiary guarantors of the Senior Notes and the Senior Secured Credit Facilities. In addition, Summit LLC has pledged substantially all of its assets as collateral, subject to certain exclusions and exceptions, for the Senior Secured Credit Facilities.

The following table presents the activity for the deferred financing fees for the years ended December 30, 2017 and December 31, 2016:


	Deferred financing fees
Balance—January 2, 2016	$	15,892
Loan origination fees		5,801
Amortization		(3,403)
Balance—December 31, 2016	$	18,290
Loan origination fees		6,416
Amortization		(3,990)
Write off of deferred financing fees		(1,683)
Balance—December 30, 2017	$	19,033

Other—On January 15, 2015, the Company’s wholly-owned subsidiary in British Columbia, Canada entered into an agreement with HSBC for a (i) $6.0 million Canadian dollar (“CAD”) revolving credit commitment to be used for operating activities that bears interest per annum equal to the bank’s prime rate plus 0.20%, (ii) $0.5 million CAD revolving credit commitment to be used for capital equipment that bears interest per annum at the bank’s prime rate plus 0.90% and (iii) $0.4 million CAD revolving credit commitment to provide guarantees on behalf of that subsidiary. There were no amounts outstanding under this agreement as of December 30, 2017 or December 31, 2016.

Summit Materials, LLC

Debt

(8) Debt

Debt consisted of the following as of December 30, 2017 and December 31, 2016:


	2017		2016
Term Loan, due 2024:
$635.4 million and $640.3 million, net of $1.6 million and $2.6 million discount at December 30, 2017 and December 31, 2016, respectively	$	633,805	$	637,658
81⁄₂% Senior Notes, due 2022		250,000		250,000
61⁄₈% Senior Notes, due 2023:
$650.0 million, net of $1.4 million and $1.6 million discount at December 30, 2017 and December 31, 2016, respectively		648,650		648,407
51⁄₈% Senior Notes, due 2025		300,000		—
Total		1,832,455		1,536,065
Current portion of long-term debt		4,765		6,500
Long-term debt	$	1,827,690	$	1,529,565

The contractual payments of long-term debt, including current maturities, for the five years subsequent to December 30, 2017, are as follows:


2018		4,765
2019		6,354
2020		7,942
2021		6,354
2022		256,354
Thereafter		1,553,606
Total		1,835,375
Less: Original issue net discount		(2,920)
Less: Capitalized loan costs		(16,857)
Total debt	$	1,815,598

Senior Notes— On June 1, 2017, Summit LLC and Summit Materials Finance Corp., an indirect wholly-owned subsidiary of Summit LLC ("Finance Corp." and with Summit LLC, the “Issuers”) issued $300.0 million of 51⁄₈% senior notes due June 1, 2025 (the “2025 Notes”). The 2025 Notes were issued at 100.0% of their par value with proceeds of $295.4 million, net of related fees and expenses. The 2025 Notes were issued under an indenture dated June 1, 2017 (as amended and supplemented, the “2017 Indenture”). The 2017 Indenture contains covenants limiting, among other things, Summit LLC and its restricted subsidiaries’ ability to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter inter certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The 2017 Indenture also contains customary events of default. Interest on the 2025 Notes is payable semi-annually on June 1 and December 1 of each year commencing on December 1, 2017.

As of December 30, 2017 and December 31, 2016, the Company was in compliance with all financial covenants under the applicable indentures.

Senior Secured Credit Facilities— Summit LLC has credit facilities that provide for term loans in an aggregate amount of $650.0 million and revolving credit commitments in an aggregate amount of $235.0 million (the “Senior Secured Credit Facilities”). Under the Senior Secured Credit Facilities, required principal repayments of 0.25% of the refinanced aggregate amount of term debt are due on the last business day of each March, June, September and December, commencing with the March 2018 payment. The unpaid principal balance is due in full on the maturity date, which is November 21, 2024.

There were no outstanding borrowings under the revolving credit facility as of December 30, 2017 or December 31, 2016. As of December 30, 2017, we had remaining borrowing capacity of $218.9 million under the revolving credit facility, which is net of $16.1 million of outstanding letters of credit. The outstanding letters of credit are renewed annually and support required bonding on construction projects and the Company’s insurance liabilities.

The following table presents the activity for the deferred financing fees for the years ended December 30, 2017 and December 31, 2016:


	Deferred financing fees
Balance—January 2, 2016	$	15,892
Loan origination fees		5,801
Amortization		(3,403)
Balance—December 31, 2016	$	18,290
Loan origination fees		6,416
Amortization		(3,990)
Write off of deferred financing fees		(1,683)
Balance—December 30, 2017	$	19,033