Revolving Credit Facility and Long-Term Debt

9 Months Ended

Sep. 30, 2018

Revolving Credit Facility and Long-Term Debt

Revolving Credit Facility and Long-Term Debt. Principal balances outstanding under our long-term debt obligations as of September 30, 2018 and December 31, 2017, consisted of the following (in thousands):


	September 30, 2018		December 31, 2017
2016 Term loan	$	76,250	$	85,000
2016 Revolving credit loans	126,000		187,000
Collateralized debt facility	7,000		6,959
Less unamortized debt issuance costs	(383)		(487)
Total long-term debt	208,867		278,472
Less current portion	22,000		19,459
Long-term portion	$	186,867	$	259,013

2016 Term Loan and Revolving Credit Loans

On July 6, 2016, we entered into a Second Amended and Restated Credit Agreement (as amended to date, the “Second Amended Credit Agreement”), with Wells Fargo Bank, National Association, as administrative agent, swingline lender and a lender, and Wells Fargo Securities, LLC, as sole lead arranger and sole bookrunner. In addition to Wells Fargo Bank, National Association, Bank of America, N.A., U.S. Bank, National Association, and HSBC Bank USA, National Association, are parties to the Second Amended Credit Agreement as lenders. The Second Amended Credit Agreement amends and restates in its entirety our previously outstanding Amended and Restated Credit Agreement and all amendments thereto. The Second Amended Credit Agreement was amended on September 28, 2016 to allow for a new revolving credit loan to our wholly-owned subsidiary, on March 20, 2017 to allow flexibility in how we apply net proceeds received from equity issuances to prepay outstanding indebtedness, on December 13, 2017 to increase the revolving credit commitment by $100 million up to $375 million, and on March 28, 2018 to amend certain debt covenants.

The Second Amended Credit Agreement provides for a term loan of $150 million and a revolving credit commitment up to an aggregate amount of $375 million, which includes a reserve of $25 million to make swingline loans from time to time. The term loan is payable in quarterly installments in the amounts provided in the Second Amended Credit Agreement until the maturity date of July 6, 2021, at which time the term and revolving credit loans, together with accrued interest thereon, will be due and payable. At any time prior to the maturity date, we may repay any amounts owing under all revolving credit loans, term loans, and all swingline loans in whole or in part, subject to certain minimum thresholds, without premium or penalty, other than breakage costs.

Revolving credit loans denominated in dollars and term loans made under the Second Amended Credit Agreement bear interest, at our election, at either a Base Rate or Eurocurrency Base Rate (as such terms are defined in the Second Amended Credit Agreement) plus the applicable margin, which increases as our Consolidated Total Leverage Ratio (as defined in the Second Amended Credit Agreement) increases. Revolving credit loans denominated in an Alternative Currency (as defined in the Second Amended Credit Agreement) bear interest at the Eurocurrency rate plus the applicable margin. Swingline loans bear interest at the Base Rate plus the applicable margin. Upon an event of default, the interest rate may be increased by 2.0%. The revolving credit commitment also carries a commitment fee of 0.15% to 0.40% per annum on the unused portion.

The Second Amended Credit Agreement is collateralized by substantially all our assets. The Second Amended Credit Agreement contains covenants, representations and warranties, and other terms customary for loans of this nature. The Second Amended Credit Agreement requires that we maintain certain financial covenants, as follows:

Covenant Requirement

Consolidated Total Leverage Ratio ⁽¹⁾

January 1, 2018 and thereafter

3.5 to 1.0

Consolidated EBITDA ⁽²⁾

1.25 to 1.0

Consolidated Net Income ⁽³⁾

Facility Capital Expenditures ⁽⁴⁾

$30 million

⁽¹⁾

Maximum Consolidated Total Leverage Ratio (as defined in the Second Amended Credit Agreement) as of any fiscal quarter end.

⁽²⁾

Minimum ratio of Consolidated EBITDA (as defined in the Second Amended Credit Agreement and adjusted for certain expenditures) to Consolidated Fixed Charges (as defined in the Second Amended Credit Agreement) for any period of four consecutive fiscal quarters.

⁽³⁾

Minimum level of Consolidated Net Income (as defined in the Second Amended Credit Agreement) for certain periods, and subject to certain adjustments.

⁽⁴⁾

Maximum level of the aggregate amount of all Facility Capital Expenditures (as defined in the Second Amended Credit Agreement) in any fiscal year.

Additionally, the Second Amended Credit Agreement contains customary events of default and affirmative and negative covenants for transactions of this type. As of September 30, 2018, we believe we were in compliance with all covenants set forth in the Second Amended Credit Agreement.

As of September 30, 2018, we had outstanding borrowings of approximately $202.3 million under the Second Amended Credit Agreement, with available borrowings of approximately $248.4 million, based on the leverage ratio required pursuant to the Second Amended Credit Agreement. Our interest rate as of September 30, 2018 was a fixed rate of 2.87% on $175.0 million as a result an interest rate swap (see Note 11) and a variable floating rate of 3.99% on $27.3 million. Our interest rate as of December 31, 2017 was a fixed rate of 2.68% on $175 million as a result of an interest rate swap and a variable floating rate of 2.82% on $97 million.

Collateralized Debt Facility

On September 3, 2018, we renewed our loan agreement with HSBC Bank whereby HSBC Bank agreed to provide us with a loan in the amount of approximately $7.0 million. The loan matures on January 10, 2019, with an extension available at our option, subject to certain conditions. The loan agreement bears interest at the six-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.0%. The loan is secured by assets having a value not less than the currently outstanding loan balance. The loan contains covenants, representations and warranties and other terms customary for loans of this nature. As of September 30, 2018, our interest rate on the loan was a variable rate of 3.12%.

Future Payments

Future minimum principal payments on our long-term debt as of September 30, 2018, are as follows (in thousands):


Years Ending	Future Minimum
December 31	Principal Payments
Remaining 2018	$	3,750
2019	22,000
2020	17,500
2021	166,000
Total future minimum principal payments	$	209,250