11. Long-Term Debt

Long-term debt consisted of the following:


	As of December 31,
(in thousands)	2011		2010

Variable rate credit facilities	$	—	$	—
Term loan		212,000		—

Long-term debt		212,000		—
Current portion of long-term debt		15,900		—

Long-term debt (less current portion)		196,100

Fair value of long-term debt *	$	212,000	$	—


*		Fair value was estimated based on current rates available to the Company for debt of the same remaining maturity.

On December 9, 2011, we entered into a $312 million revolving credit and term loan agreement (“Financing Agreement”) to finance the acquisition of McGraw-Hill Broadcasting, Inc. and to provide liquidity for ongoing operations. The Financing Agreement has a five-year term and includes a $212 million term loan and a $100 million revolving credit facility. We terminated our previous revolving credit facility on the funding of the new Financing Agreement on December 30, 2011. There were no borrowings under the previous revolving credit agreement in 2011.

The Financing Agreement includes certain affirmative and negative covenants, including maintenance of minimum fixed charge coverage and leverage ratios, as defined in the Financing Agreement. We were in compliance with all covenants at December 31, 2011.

Interest was payable at a base rate of 6.25% on December 31, 2011. Beginning January 6, 2012, interest is payable at rates based on our leverage ratio and LIBOR plus a margin ranging from 3.5% to 4.0% (4.3% at January 6, 2012). The Financing Agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt. As of December 31, 2011, we were not required to make additional principal payments based on excess cash flow. The weighted-average interest rate on borrowings was 6.25% at December 31, 2011.

Scheduled principal payments on long-term debt at December 31, 2011, are: $15.9 million in 2012, $15.9 million in 2013, $26.5 million in 2014, $26.5 million in 2015, and $127.2 million in 2016.

Under the terms of the Financing Agreement we granted the lenders mortgages on certain of our real property, pledges of our equity interests in our subsidiaries and security interests in substantially all other personal property, including cash, accounts receivables, inventories and equipment.

The Financing Agreement allows us to make dividends and stock buy-backs up to $25 million plus additional amounts based on our financial results and condition, up to a maximum of $250 million over the term of the agreement. We can also make acquisitions up to $25 million plus additional amounts based on our financial results and condition, up to a maximum of $150 million.

Commitment fees of 0.50% per annum of the total unused commitment are payable under the revolving credit facility.

As of December 31, 2011 and 2010, we had outstanding letters of credit totaling $1.1 million and $10.4 million, respectively.

In October 2008, we entered into a 2-year $30 million notional interest rate swap which expired in October 2010. Under this agreement we received payments based on the 3-month LIBOR and made payments based on a fixed rate of 3.2%. This swap was not designated as a hedge in accordance with generally accepted accounting principles and changes in fair value were recorded in miscellaneous-net with a corresponding adjustment to other long-term liabilities. The fair value at December 31, 2009 was $0.8 million liability. For the year ended December 31, 2010, $0.8 million gain was recorded in other income (expense), while no gain or loss was recorded for the year ended December 31, 2009.