Debt

12 Months Ended

Dec. 31, 2019

The following table summarizes the components of debt as of December 31, 2019 and December 31, 2018:



	December 31, 2019		December 31, 2018
	(in millions)
Revolving credit facility	$	100.0	$	180.0
Finance leases	7.3		5.5
Total debt	$	107.3	$	185.5

On November 1, 2018, the Company entered into a $400.0 million unsecured revolving credit facility that matures in November 2023. The interest rates under the facility are variable based on LIBOR or an alternate base rate plus a margin. A commitment fee accrues on the average daily unused portion of the revolving facility. The margin for borrowing and commitment fee rate are determined based on Arcosa’s leverage as measured by a consolidated total indebtedness to consolidated EBITDA ratio. The margin for borrowing ranges from 1.25% to 2.00% and was set at LIBOR plus 1.25% as of December 31, 2019. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.20% at December 31, 2019.

As of December 31, 2019, we had $100.0 million of outstanding loans borrowed under the facility and there were approximately $42.5 million in letters of credit issued, leaving $257.5 million available for borrowing. All of the outstanding letters of credit as of December 31, 2019 are expected to expire in 2020. The majority of our letters of credit obligations support the Company’s various insurance programs and warranty claims and generally renew by their terms each year.

The Company's revolving credit facility requires the maintenance of certain ratios related to leverage and interest coverage. As of December 31, 2019, we were in compliance with all such financial covenants. Borrowings under the credit facility are guaranteed by certain wholly-owned subsidiaries of the Company.

The carrying value of borrowings under our revolving credit facility approximates fair value because the interest rate adjusts to the market interest rate (Level 3 input). See Note 3 Fair Value Accounting.

As of December 31, 2019, the Company had $1.2 million of unamortized debt issuance cost related to the revolving credit facility, which is included in other assets on the Consolidated Balance Sheet.

The remaining principal payments under existing debt agreements as of December 31, 2019 are as follows:



	2020		2021		2022		2023		2024		Thereafter
	(in millions)
Revolving credit facility	$	—	$	—	$	—	$	100.0	$	—	$	—

On January 2, 2020, the Company entered into an Amended and Restated Credit Agreement to increase the revolving credit facility from $400.0 million to $500.0 million and added a term loan facility of $150.0 million, in each case with a maturity date of January 2, 2025. The mechanism for determining and the applicable ranges for the interest rate margin and commitment fee rate are unchanged. The interest rate on the revolving credit facility was initially set at one-month LIBOR plus 1.50% and the interest rate on the term loan facility was initially set at three-month LIBOR plus 1.50%. The commitment fee rate on both facilities was initially set at set at 0.25%. The entire term loan was advanced on January 2, 2020 in connection with the closing of the acquisition of Cherry. See Note 2 Acquisitions and Divestitures.

Interest rate hedges

In December 2018, the Company entered into an interest rate swap instrument, effective as of January 2, 2019 and expiring in 2023, to reduce the effect of changes in the variable interest rates associated with borrowings under the revolving credit facility. The instrument carried an initial notional amount of $100 million, thereby hedging the first $100 million of borrowings under the credit facility. The instrument effectively fixes the LIBOR component of the credit facility borrowings at a monthly rate of 2.71%. As of December 31, 2019, the Company has recorded a liability of $4.3 million for the fair value of the instrument, all of which is recorded in accumulated other comprehensive loss. See Note 3 Fair Value Accounting.