Note 13. Notes Payable and other borrowings

12 Months Ended

Dec. 31, 2015

Note 13. Notes Payable And Other Borrowings

Note 13. Notes payable and other borrowings

Notes payable and other borrowings include the following.

	December 31,
	2015			2014
Notes payable	$	2,200		$	2,200
Unamortized original issue discount		(296	)		(287	)
Obligations under leases		5,787			6,422
Western revolver		786			980
Total current portion of notes payable and other borrowings	$	8,477		$	9,315
Notes payable	$	210,175		$	216,150
Unamortized original issue discount		(1,403	)		(1,694	)
Obligations under leases		90,178			98,139
Total long-term notes payable and other borrowings	$	298,950		$	312,595

Steak n Shake Credit Facility

On March 19, 2014, Steak n Shake and its subsidiaries entered into a new credit agreement. This 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, according to Steak n Shake’s total leverage ratio, on the unused portion of the revolver.

The interest rate on the term loan was 4.75% on December 31, 2015.

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. Approximately $118,589 of the proceeds of the term loan were used to repay all outstanding amounts under Steak n Shake’s former credit facility and to pay related fees and expenses, $50,000 of such proceeds were used to pay a cash dividend to Biglari Holdings, and the remaining term loan proceeds of approximately $51,411 are being used by Steak n Shake for working capital and general corporate purposes. As of December 31, 2015, $212,375 was outstanding under the term loan, and no amount was outstanding under the revolver.

We recorded losses of $1,133 in interest expense for the extinguishment of debt for fiscal year 2014 related to the write-off of deferred loan costs associated with former credit facilities. We capitalized $4,754 in debt issuance costs in fiscal year 2014.

We had $10,188 in standby letters of credit outstanding as of December 31, 2015 and December 31, 2014.

Western Revolver

As of December 31, 2015, Western has $786 due June 13, 2016.

Interest Rate Swap

During fiscal year 2013, Steak n Shake entered into an interest rate swap for a notional amount of $65,000 which matured on September 30, 2015. During fiscal year 2011, Steak n Shake entered into an interest rate swap agreement which matures on February 15, 2016. The notional amount of the interest rate swap was $1,000 with a fair value of $2 on December 31, 2015.

The carrying amounts for debt reported in the consolidated balance sheet did not differ materially from their fair values at December 31, 2015 and December 31, 2014. The fair value was determined to be a Level 3 fair value measurement.

Expected principal payments for notes payable and Western’s revolver as of December 31, 2015, are as follows.

2016	$	2,986
2017		2,200
2018		2,200
2019		2,200
2020		2,200
2021		201,375
Total	$	213,161

Interest

No interest was capitalized in connection with financing additions to property and equipment during 2015 and the 2014 and 2013 transition periods. Interest paid on debt amounted to $10,186 for 2015, $2,841 for the 2014 transition period and $1,956 for the 2013 transition period. Interest paid on obligations under leases was $9,422, $2,577, and $2,612 for 2015, the 2014 transition period, and the 2013 transition period, respectively. No interest was capitalized in connection with financing additions to property and equipment during fiscal years 2014 and 2013. Interest paid on debt amounted to $8,158 in fiscal year 2014 and $4,950 in fiscal year 2013. Interest paid on obligations under leases was $9,720 and $9,829 in fiscal years 2014 and 2013, respectively.