|3 Months Ended|
Mar. 31, 2018
4. LONG-TERM DEBT
On May 5, 2017, we and the Guarantors entered into a credit agreement with the Lenders. All obligations under the credit agreement are guaranteed by the Guarantors, and all obligations under the credit agreement, including the guarantees of those obligations, are secured by substantially all of the assets of us and the Guarantors.
On March 28, 2018, we executed an amendment to our credit agreement. The primary change of the amendment is to facilitate the acquisition of USI. Additionally, the amendment (i) extended until August 29, 2018, the period during which the Company may access the $100.0 million delayed-draw term loan feature and (ii) provides that the Company may issue up to $500.0 million of senior notes in connection with its acquisition of USI. See Note 15 – Subsequent Events for more information.
Interest payable on borrowings under the Amended Credit Agreement is based on an applicable margin rate plus, at our option, either:
The applicable margin rate is determined based on our Secured Leverage Ratio. In the case of base rate borrowings, the applicable margin rate ranges from 0.00 percent to 1.50 percent and in the case of LIBOR rate borrowings, the applicable margin ranges from 1.00 percent to 2.50 percent.
We are required to pay commitment fees to the Lenders in respect of any unutilized commitments. The commitment fees range from 0.15 percent to 0.275 percent per annum, depending on our Secured Leverage Ratio. We must also pay customary fees on outstanding letters of credit.
The following table outlines the key terms of our Amended Credit Agreement, dollars in thousands:
Borrowings under the Amended Credit Agreement are prepayable at the Company’s option without premium or penalty. The Company is required to make prepayments with the net cash proceeds of certain asset sales and certain extraordinary receipts.
On March 2, 2018, the company entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC for the purpose of financing the purchase of vehicles and equipment. In addition, the company executed equipment notes thereunder in the amount of $10.1 million maturing on March 2, 2023.
The following table sets forth our remaining principal payments for our outstanding term loan balance and equipment notes as of March 31, 2018, in thousands:
The following table reconciles the principal balance of our outstanding debt to our Condensed Consolidated Balance Sheets, in thousands:
The Company has outstanding standby letters of credit that secure our financial obligations related to our workers’ compensation, general insurance, and auto liability programs. These standby letters of credit, as well as any outstanding amount borrowed under our revolving credit facility, reduce the availability under the Revolving Facility. The following table summarizes our availability under the Revolving Facility, in thousands:
The Amended Credit Agreement contains certain covenants that limit, among other things, the ability of the Company to incur additional indebtedness or liens; to make certain investments or loans; to make certain restricted payments; to enter into consolidations, mergers, sales of material assets, and other fundamental changes; to transact with affiliates; to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends; or to make certain accounting changes. The Amended Credit Agreement contains customary affirmative covenants and events of default.
The Amended Credit Agreement requires us to maintain a Net Leverage Ratio and minimum FCCR throughout the term of the agreement. The following table sets forth the maximum Net Leverage Ratios and minimum FCCR:
The following table outlines the key financial covenants effective for the period covered by this report:
The entire disclosure for long-term debt.
Reference 1: http://www.xbrl.org/2003/role/presentationRef