Borrowings

9 Months Ended

Sep. 30, 2011

Borrowings

Borrowings

(5) Borrowings

CIBER has a senior credit agreement with several financial institutions as lenders and Bank of America, N.A. as administrative agent (the “Senior Credit Facility”).  At September 30, 2011, we had outstanding borrowings of $80.7 million under the Senior Credit Facility.  The Senior Credit Facility provides for a revolving line of credit of up to $85 million and a term loan with a balance of $30 million at September 30, 2011.

On October 31, 2011, we executed an amendment and extension to the Senior Credit Facility with our lenders.  The amendment, among other things, 1) extends the maturity date to January 1, 2013; 2) increases the rates applicable to our borrowings by 0.50% on both November 1, 2011 and January 1, 2012, and by 1.00% on April 1, 2012; 3) revises the minimum and/or maximum levels permitted under the consolidated total leverage ratio, the consolidated fixed charge coverage ratio and the minimum EBITDA for the next five quarters; and 4) requires the Company to make a $5 million payment on the term loan on December 30, 2011, and to make a payment for the remaining outstanding principal balance of the term loan on January 31, 2012.  We paid a $0.8 million amendment fee to our lenders in relation to the amendment and extension.  Due to the revised term loan repayment schedule effective under the amendment, $30 million of our total obligation is classified as a current liability.  CIBER’s remaining obligation under the Senior Credit Facility is classified as long-term debt on our Consolidated Balance Sheets.  Based on the scheduled maturity date, and absent an amendment, all obligations under the Senior Credit Facility will need to be reclassified to short-term debt in our financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2012.  As a result, prior to the issuance of our financial statements for the period ending on March 31, 2012, we intend to either amend this facility to provide for an extension of the maturity date, or replace the facility with alternative bank financing or other equity or debt financing.  We are also contemplating other alternatives to pay down the facility, including repatriating some of our foreign cash and possible asset sales.  There can be no assurance that we will be successful in achieving any of the above-mentioned alternatives, or that if available to us, the terms of any of these alternatives, such as an amended facility, will not be materially less favorable to the Company.

The Senior Credit Facility contains certain financial covenants, including: 1) a maximum consolidated total leverage ratio; 2) a minimum consolidated fixed charge coverage ratio; 3) a minimum EBITDA; and 4) an asset coverage test.  We are required to be in compliance with the financial covenants at the end of each calendar quarter.  At September 30, 2011, we were in compliance with all of our financial covenants under the Senior Credit Facility, which were amended on July 28, 2011, in connection with a waiver of our non-compliance under the financial covenants in place for June 30, 2011.  Based on management’s current estimates, we do not currently believe a further covenant violation to be probable of occurring for at least the next 12 months.