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Debt
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9 Months Ended |
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Sep. 30, 2014
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| Debt [Abstract] | |
| Debt |
(2) Debt
We have a loan agreement with a group of banks that was entered into in June 2011 to fund our acquisition of Wheeler Bros., Inc ("WBI") and provide working capital for our continuing operations. The loan agreement, which expires in June 2016, consists of a term loan facility and a revolving loan facility that also provides us with letters of credit. Financing costs associated with the loan inception of approximately $1.7 million were capitalized and are being amortized over the five-year life of the loan.
The term loan requires quarterly installment payments. Our scheduled term loan payments after September 30, 2014 are $6.3 million in 2014 and $25 million in 2015. The amount of our term loan borrowings outstanding as of September 30, 2014 was approximately $31.3 million. The amount of term loan borrowings outstanding as of December 31, 2013 was approximately $59.4 million.
The maximum amount of credit available to us from the banking group for revolving loans and letters of credit as of September 30, 2014 was $125 million. The loan agreement provides that we may elect to increase this maximum to $175 million. Under the loan agreement terms, we may borrow revolving loan amounts at any time and can repay the borrowings at any time without premium or penalty. We pay an unused commitment fee and fees on letters of credit that are issued. We had approximately $26 million in revolving loan amounts outstanding and no letters of credit outstanding as of September 30, 2014. We had approximately $30.3 million in revolving loan amounts outstanding and $573 thousand of letters of credit outstanding as of December 31, 2013.
Total bank loan borrowed funds outstanding as of September 30, 2014, including term loan borrowings and revolving loan borrowings, were approximately $57.3 million. Total bank loan borrowed funds outstanding as of December 31, 2013 were $89.7 million. The fair value of outstanding debt under our bank loan facilities as of September 30, 2014 approximates its carrying value using Level 2 inputs based on market data on companies with a corporate rating similar to ours that have recently priced credit facilities.
We pay interest on the term loan borrowings and revolving loan borrowings at LIBOR plus a base margin or at a base rate (typically the prime rate) plus a base margin. As of September 30, 2014, the LIBOR base margin was 1.75% and the base rate base margin was 0.0%. The base margins may increase or decrease in increments as our Total Funded Debt/EBITDA Ratio increases or decreases.
We had interest rate hedges on a portion of our outstanding borrowings that expired June 30, 2014. After June 30, 2014, none of our outstanding borrowing was hedged. As of September 30, 2014, interest rates on portions of our outstanding debt ranged from 1.9% to 3.25%, and the effective interest rate on our aggregate outstanding debt was 2.05%.
Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $366 thousand and $1.6 million for the three- and nine-month periods ended September 30, 2014, respectively and approximately $877 thousand and $2.9 million for the three- and nine-month periods ended September 30, 2013.
The loan agreement contains collateral requirements by which we pledge our assets as security, restrictive financial covenants, and other affirmative and negative covenants, conditions, and limitations. Restrictive covenants include a limit on annual dividends, a maximum Total Funded Debt/EBITDA Ratio, a minimum Fixed Charge Coverage Ratio, and a minimum Asset Coverage Ratio. We were in compliance with the financial covenants and other loan agreement terms and conditions at September 30, 2014.
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