4. LONG-TERM DEBT

 

On May 5, 2017, we and the Guarantors entered into a New Credit Agreement with the Lenders.  All obligations under the New Credit Agreement are guaranteed by the Guarantors, and all obligations under the New Credit Agreement, including the guarantees of those obligations, are secured by substantially all of the assets of us and the Guarantors. 

 

Interest payable on borrowings under the New Credit Agreement is based on an applicable margin rate plus, at our option, either:

 

 

The applicable margin rate is determined based on our Total 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 Total Leverage Ratio.  We must also pay customary fees on outstanding letters of credit.

 

We used a portion of the proceeds from the term loan under the New Credit Agreement to repay all amounts outstanding under the Old Credit Agreement.  The remaining proceeds were used to fund our 2017 Repurchase program, to make additional acquisitions, and for general operating purposes.  Upon executing the New Credit Agreement, we terminated the Old Credit Agreement and all associated agreements and instruments.

 

In conjunction with the New Credit Agreement, we recognized a loss on extinguishment of debt of $1.1 million for the nine months ended September 30, 2017, which is reflected under the caption, “Loss on extinguishment of debt” in our Condensed Consolidated Statements of Operations.  The following table outlines the key terms of our New Credit Agreement, dollars in thousands:

 

 

Borrowings under the New 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.  

 

The following table sets forth our remaining principal payments for our outstanding term loan balance as of September 30, 2017, 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 New 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 New Credit Agreement contains customary affirmative covenants and events of default.

 

The New 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: