REVOLVING LOAN

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

REVOLVING LOAN

REVOLVING LOANOn June 27, 2018, the Company and a bank syndicate entered into a credit agreement (the "2018 Credit Agreement"), which replaced the existing credit facility that had provided for a senior secured term loan of $350,000 and a revolving loan of $100,000.  The 2018 Credit Agreement, which expires on June 27, 2023, provides for revolving loans up to $500,000 (collectively referred to as the “loans”).  The loans may be used for working capital, letters of credit, and other corporate purposes and may be drawn upon at the Company’s discretion.  The initial proceeds from the 2018 Credit Agreement were used to repay the outstanding balance of $210,750 on its senior secured term loan, which was due May 2019. During the second quarter of 2022, the Company borrowed an additional $345,000 to fund the Kappa acquisition (see Note 2, "Significant Acquisitions"). As of June 30, 2022 and December 31, 2021, the total balance outstanding on the 2018 Credit Agreement amounted to $433,569 and $108,569, respectively. There are no installment payments required on the revolving loans; they may be voluntarily prepaid in whole or in part without premium or penalty, and all outstanding amounts are due on the maturity date. On July 27, 2022, the Company entered into an Amended and Restated Credit Agreement with lenders in the form of a senior secured revolving credit facility, due July 27, 2027. The Amended and Restated Credit Agreement allows for up to $550,000 of borrowing. The Company used initial proceeds from the Amended and Restated Credit Agreement to repay the outstanding balance of $433,569 on the previous revolving credit facility, due June 2023. In connection with the entering into the Amended and Restated Credit Agreement, the Company also modified its existing interest rate swap under the relief provided for in ASC 848, "Reference Rate Reform" (see Note 20 "Derivative Instruments and Hedging Activities").

Amounts outstanding under the 2018 Credit Agreement are subject to an interest rate equal to a fluctuating rate as defined by the 2018 Credit Agreement plus an applicable rate.  The applicable rate is based upon the Company’s consolidated net leverage ratio, as defined in the 2018 Credit Agreement, and the interest rate was 2.538% at June 30, 2022. The Company is also required to pay a commitment fee on the unused portion of the revolving loan, which is based on the Company’s consolidated net leverage ratio as defined in the 2018 Credit Agreement and ranges from 0.15% to 0.275% (0.15% at June 30, 2022).  The unused portion of the revolving loan amounted to $66,431 at June 30, 2022.  The Company is also required to pay, as applicable, letter of credit fees, administrative agent fees, and other fees to the arrangers and lenders.

Costs associated with the issuance of the revolving loans are capitalized and amortized on a straight-line basis over the term of the 2018 Credit Agreement, which is not materially different than the effective interest method.  Costs associated with the issuance of the extinguished debt instrument were capitalized and amortized over the term of the respective financing arrangement using the effective interest method. Capitalized costs net of accumulated amortization totaled $280 and $421 at June 30, 2022 and December 31, 2021, respectively, and are included in other assets on the condensed consolidated balance sheets. Amortization expense pertaining to these costs totaled $70 and $141 for the three and six months ended June 30, 2022 and 2021, respectively, and are included in "Interest expense" in the accompanying condensed consolidated statements of earnings.

The 2018 Credit Agreement contains quarterly covenants requiring the consolidated leverage ratio to be less than a certain maximum ratio and the consolidated interest coverage ratio to exceed a certain minimum ratio.  At June 30, 2022, the Company was in compliance with these covenants.  Indebtedness under the Company’s loan agreements is secured by assets of the Company.