Debt

3 Months Ended

Mar. 31, 2020

The following table summarizes the components of debt as of March 31, 2020 and December 31, 2019:


	March 31, 2020		December 31, 2019
	(in millions)
Revolving credit facility	$	200.0	$	100.0
Term loan	150.0		—
Finance leases	7.2		7.3
	357.2		107.3
Less: unamortized debt issuance costs	(0.3)		—
Total debt	$	356.9	$	107.3

On November 1, 2018, the Company entered into a $400.0 million unsecured revolving credit facility that was scheduled to mature in November 2023. On January 2, 2020, the Company entered into an Amended and Restated Credit Agreement to increase the revolving credit facility 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 interest rates under the revolving credit facility and term loan 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 1.50% as of March 31, 2020. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.25% as of March 31, 2020.

As a precautionary measure, to increase the Company’s cash position and preserve financial flexibility considering the current uncertainty resulting from the COVID-19 pandemic, the Company borrowed an additional $100.0 million on its revolving credit facility during the three months ended March 31, 2020. As of March 31, 2020, we had $200.0 million of outstanding loans borrowed under the facility and there were approximately $26.0 million of letters of credit issued, leaving $274.0 million available. Of the outstanding letters of credit as of March 31, 2020, $25.4 million are expected to expire in 2020, with the remainder in 2021. 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 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.

The Company's revolving credit and term loan facilities require the maintenance of certain ratios related to leverage and interest coverage. As of March 31, 2020, we were in compliance with all such financial covenants. Borrowings under the credit agreement are guaranteed by certain wholly-owned subsidiaries of the Company.

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

As of March 31, 2020, the Company had $1.9 million of unamortized debt issuance costs related to the revolving credit facility, which are included in other assets on the Consolidated Balance Sheet.

The remaining principal payments under existing debt agreements as of March 31, 2020 are as follows:


	2020		2021		2022		2023		2024		Thereafter
	(in millions)
Revolving credit facility	$	—	$	—	$	—	$	—	$	—	$	200.0
Term loan	0.9		4.7		7.5		8.5		8.4		120.0

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 March 31, 2020, the Company has recorded a liability of $8.4 million for the fair value of the instrument, all of which is recorded in accumulated other comprehensive loss. See Note 3 Fair Value Accounting.