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Debt

On April 23, 2013, we issued a new senior secured credit facility consisting of a six-year term loan (the Term Loan) of $255,000 issued at 99% of the Term Loan amount and a five-year revolving credit facility (the Revolving Credit Facility) of up to $20,000. As of September 30, 2013, nothing was outstanding under the Revolving Credit Facility. The Term Loan replaces $252,000 of Senior Secured Notes that bore interest at 11.75% (Notes).

The Term Loan and Revolving Credit Facility were established pursuant to a Credit Agreement (the Credit Agreement) which contains certain financial covenants, the most notable a debt-to-adjusted-EBITDA ratio. The trailing twelve month debt-to-adjusted EBITDA ratio as of September 30, 2013 was 5.1:1, which is within compliance of the maximum allowable ratio of 5.5:1 for the current period under the Credit Agreement. It also contains various other negative covenants, including restrictions on incurring indebtedness, creating liens, mergers, dispositions of property, dividends and stock repurchases, acquisitions and other investments, capital expenditures and entering into new lines of business. The Credit Agreement also contains various affirmative covenants, including covenants relating to the delivery of financial statements and other financial information, maintenance of property, maintenance of insurance, maintenance of books and records and compliance with environmental laws. As of September 30, 2013, we were in compliance with all applicable covenants.

The Credit Agreement provides that borrowings will bear interest at a variable rate which can be, at our option, either (i) a LIBOR borrowing rate for a specified interest period plus an applicable margin or, (ii) an alternative base rate plus an applicable margin, subject to a LIBOR rate floor of 1.25% or a base rate floor of 2.25%, as applicable. The applicable spread for borrowings under the Credit Agreement is 4.75% per annum for LIBOR loans and 3.75% per annum for base rate loans. Based on an election we made pursuant to the terms of the Credit Agreement with respect to the interest period, through December 31, 2013, borrowings under the Credit Agreement will bear interest at an interest rate of 6.00% per annum. If an event of default occurs under the Credit Agreement, the applicable interest rate will increase by 2.00% per annum during the continuance of such event of default. As required by the terms of the Credit Agreement, we entered into a two-year, interest rate cap at 3.00% for 50% of the total amount of Term Loan principal outstanding on October 21, 2013 at a cost of $65.

During 2013, we capitalized $4,588 of debt issuance costs in other assets in our consolidated balance sheet. In the three months ended September 30, 2013, we made a required principal payment of $638 against the Term Loan as well as an additional voluntary payment of $6,000.

In the three months ended September 30, 2013 and 2012, we recorded $4,149 and $8,094, respectively, of interest expense related to the Term Loan and Notes, including $124 and $520, respectively, of amortization of debt issuance costs and $70 and $171, respectively, of amortization of net debt discount. In the nine months ended September 30, 2013 and 2012, we recorded $17,303 and $24,217, respectively, of interest expense related to the Term Loan and Notes, including $901 and $1,512, respectively, of amortization of debt issuance costs and $342 and $498, respectively, of amortization of net debt discount. In the nine months ended September 30, 2013 we also recorded a charge for $5,235 of unamortized debt issuance costs, $1,724 of unamortized net debt discount and $16,863 of early retirement costs associated with the extinguishment of the Notes in other expense in our consolidated statement of operations.