TopBuild Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt

Long-Term Debt

3 Months Ended

Mar. 31, 2017

4. LONG-TERM DEBT

The Guarantors entered into a Credit Agreement with PNC Bank, National Association, as administrative agent, and the other lenders and agents party thereto. The Credit Agreement became effective on June 30, 2015. The following table summarizes the key terms of the Credit Agreement, dollars in thousands:


Senior secured term loan facility (original borrowing)	$	200,000
Additional term loan and/or revolver capacity available under incremental facility (a)	$	100,000
Interest rate as of March 31, 2017		2.28	%
Scheduled maturity date		6/30/2020

Senior secured revolving credit facility ("Revolving Facility")	$	125,000
Sublimit for issuance of letters of credit under Revolving Facility (b)	$	100,000
Sublimit for swingline loans under Revolving Facility (b)	$	15,000

(a)

Subject to certain conditions (including existing or new lenders providing commitments in respect of such additional borrowing capacity).

(b)

Use of the sublimits for the issuance of letters of credit and swingline loans reduces the availability under the Revolving Facility.

The following table sets forth our remaining principal payments for the following four years as of March 31, 2017, in thousands:


	Future Principal
	Payments
Schedule of Debt Maturity by Years:
2017	$	15,000
2018		20,000
2019		25,000
2020		115,000
Total principal maturities	$	175,000

The following table reconciles the principal balance of our long-term debt to our Condensed Consolidated Balance Sheets, in thousands:


	As of
	March 31,		December 31,
	2017		2016
Current portion of long-term debt	$	20,000	$	20,000
Long-term portion of long-term debt		155,000		160,000
Unamortized debt issuance costs		(1,115)		(1,200)
Long-term debt	$	173,885	$	178,800

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 reduce the availability under the Revolving Facility. The following table summarizes our availability under the Revolving Facility, in thousands:


	As of
	March 31,		December 31,
	2017		2016
Revolving Facility	$	125,000	$	125,000
Less: standby letters of credit		(49,080)		(49,080)
Capacity under Revolving Facility	$	75,920	$	75,920

The Credit Agreement contains certain covenants that limit, among other things, certain actions we may take and require us to maintain certain financial ratios. On May 9, 2016, the Company and its lenders executed Amendment No. 1. Amendment No. 1 provides for the exclusion of up to $50 million of completed share repurchases (on a trailing twelve- month basis) from the Credit Agreement’s definition of “Fixed Charges” for the purposes of determining the Company’s compliance with the quarterly FCCR financial covenant. Amendment No. 1 provides for an initial exclusion of up to $25 million and allows for the exclusion of an additional $25 million of completed share repurchases from the FCCR calculation, provided that the Company’s Total Leverage Ratio (as defined in the Credit Agreement) is below 2.0x at the time of such share repurchase and after giving pro forma effect to any such share repurchase.

The following table outlines the key financial covenants effective for the period covered by this report:


	As of
	March 31,		December 31,
	2017		2016
Maximum net leverage ratio		3.00:1.00		3.00:1.00
Minimum fixed charge coverage ratio		1.10:1.00		1.10:1.00
Compliance as of period end		In Compliance		In Compliance