Note 10. Borrowings

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Note 10. Borrowings

Notes payable and other borrowings include the following.

Current portion of notes payable and other borrowings	March 31, 2017			December 31, 2016
Notes payable	$	2,200		$	2,200
Unamortized original issue discount		(312	)		(308	)
Unamortized debt issuance costs		(716	)		(711	)
Obligations under leases		5,538			5,571
Western revolver		357			377
Total current portion of notes payable and other borrowings	$	7,067		$	7,129
Long-term notes payable and other borrowings
Notes payable	$	185,348		$	200,898
Unamortized original issue discount		(1,014	)		(1,093	)
Unamortized debt issuance costs		(1,996	)		(2,177	)
Obligations under leases		82,173			83,927
Total long-term notes payable and other borrowings	$	264,511		$	281,555

Steak n Shake Credit Facility

On March 19, 2014, Steak n Shake and its subsidiaries entered into the current credit agreement. The credit agreement provides for a senior secured term loan facility in an aggregate principal amount of $220,000 and a senior secured revolving credit facility in an aggregate principal amount of up to $30,000.

The term loan is scheduled to mature on March 19, 2021. It amortizes at an annual rate of 1.0% in equal quarterly installments, beginning June 30, 2014, at 0.25% of the original principal amount of the term loan, subject to mandatory prepayments from excess cash flow, asset sales and other events described in the credit agreement. The balance will be due at maturity. The revolver will be available on a revolving basis until March 19, 2019.

Steak n Shake has the right to request an incremental term loan facility from participating lenders and/or eligible assignees at any time, up to an aggregate total principal amount not to exceed $70,000 if certain customary conditions within the credit agreement are met.

Borrowings bear interest at a rate per annum equal to a base rate or a Eurodollar rate (minimum of 1%) plus an applicable margin. Interest on the term loan is based on a Eurodollar rate plus an applicable margin of 3.75% or on the prime rate plus an applicable margin of 2.75%. Interest on loans under the revolver is based on a Eurodollar rate plus an applicable margin ranging from 2.75% to 4.25% or on the prime rate plus an applicable margin ranging from 1.75% to 3.25%. The applicable margins on revolver loans are contingent on Steak n Shake’s total leverage ratio. The revolver also carries a commitment fee ranging from 0.40% to 0.50% per annum, depending on Steak n Shake’s total leverage ratio, on the unused portion of the revolver.

The interest rate on the term loan was 4.75% as of March 31, 2017.

The credit agreement includes customary affirmative and negative covenants and events of default, as well as a financial maintenance covenant, solely with respect to the revolver, relating to the maximum total leverage ratio. Steak n Shake’s credit facility contains restrictions on its ability to pay dividends to Biglari Holdings.

Both the term loan and the revolver have been secured by first priority security interests in substantially all the assets of Steak n Shake. Biglari Holdings is not a guarantor under the credit facility. As of March 31, 2017, $187,548 was outstanding under the term loan, and no amount was outstanding under the revolver.

Steak n Shake had $10,893 in standby letters of credit outstanding as of March 31, 2017 and December 31, 2016.

Western Revolver

As of March 31, 2017, Western has $357 due June 13, 2017.

Fair Value of Debt

The carrying amounts for debt reported in the consolidated balance sheet did not differ materially from their fair values at March 31, 2017 and December 31, 2016. The fair value was determined to be a Level 3 fair value measurement.