Debt |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt Long-term debt consisted of the following (in thousands):
We have a loan agreement with a group of banks that expires in January 2023. We borrow amounts under the loan agreement to provide working capital support, fund letters of credit and finance acquisitions. The loan agreement includes term and revolving loan facilities. The revolving loan facility provides for revolving loans and letters of credit. The fair value of outstanding debt as of March 31, 2021 under our bank loan facilities 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.
Our required term and revolver loan payments after March 31, 2021 are as follows (in thousands):
*Includes the revolver loan required payment of $182.3 million.
The maximum amount of credit available under the loan agreement for revolving loans and letters of credit as of March 31, 2021 was $350 million. We pay an unused commitment fee and fees on letters of credit that are issued. We had $803 thousand letters of credit outstanding as of March 31, 2021 and no letters of credit outstanding as of December 31, 2020.
Under the loan agreement we may elect to increase the maximum availability of the term loan facility, the revolving loan facility, or both facilities, up to an aggregate additional amount of $100 million.
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 March 31, 2021, the LIBOR base margin was 3.00% and the base rate base margin was 1.75%. The base margins increase or decrease in increments as our Total Funded Debt/EBITDA Ratio increases or decreases.
We use interest rate hedges on a portion of our debt. The amount of our debt with interest rate swap agreements was $75 million and $145 million as of March 31, 2021 and December 31, 2020, respectively.
After taking into account the impact of interest rate swap agreements, as of March 31, 2021, interest rates on portions of our outstanding debt ranged from 3.75% to 6.36%, and the effective interest rate on our aggregate outstanding debt was 4.13%.
Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $2.7 million and $3.4 million for the three months ended March 31, 2021 and 2020, respectively. The loan agreement contains collateral requirements to secure our loan agreement obligations, restrictive covenants, a limit on annual dividends, and other affirmative and negative covenants, conditions, and limitations. Restrictive covenants include a maximum Total Funded Debt/EBITDA Ratio and a minimum Fixed Charge Coverage Ratio. We were in compliance with required ratios and other terms and conditions as of March 31, 2021. We continue to monitor the impacts of COVID-19 on our results of operations and liquidity relative to compliance with financial covenants; at this time, we expect that we will remain in compliance with such covenants over the next twelve months.
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