Debt |
9 Months Ended |
|---|---|
Sep. 30, 2018 | |
| Debt Disclosure [Abstract] | |
| Debt |
Debt
We have a loan agreement with a group of banks to provide working capital support, letters of credit and acquisition financing. The loan agreement, which was amended in January 2018 and expires in January 2023, has a term loan facility and a revolving loan facility. The revolving loan facility provides for revolving loans and letters of credit. Financing costs associated with the inception of the amended loan agreement of approximately $1.7 million were capitalized and are being amortized over the five-year life of the loan.
Our required term loan payments after September 30, 2018 are approximately $2.5 million in 2018, $10.0 million in 2019, $11.9 million in 2020, $14.4 million in 2021, $15.0 million in 2022, and $39.5 million in 2023. The amount of term loan borrowings outstanding as of September 30, 2018 was $93.3 million.
The maximum amount of credit available to us under the loan agreement for revolving loans and letters of credit as of September 30, 2018 was $300 million. Subject to the terms of the loan agreement, we may borrow and repay the revolving loan borrowings as our cash flows require or permit. We pay an unused commitment fee and fees on letters of credit that are issued. We had $83.8 million in revolving loan amounts outstanding and $57 thousand in letters of credit outstanding as of September 30, 2018. We had approximately $79.3 million in revolving loan amounts outstanding and no letters of credit outstanding as of December 31, 2017.
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.
Total bank loan borrowed funds outstanding, including term loan borrowings and revolving loan borrowings, were $177.1 million and $173.7 million, as of September 30, 2018 and December 31, 2017, respectively. Unamortized deferred financing costs of approximately $2.2 million and $1.1 million as of September 30, 2018 and December 31, 2017 are included in long-term debt on our consolidated balance sheets. The fair value of outstanding debt as of September 30, 2018 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.
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, 2018, the LIBOR base margin was 2.00% and the base rate base margin was 0.75%. The base margins increase or decrease in increments as our Total Funded Debt/EBITDA Ratio increases or decreases.
The loan agreement requires us to have interest rate hedges on a portion of the outstanding term loan for the first three years after the January 2018 amendment date of the agreement. We executed interest rate swap agreements in February 2015 and February 2018. The notional amount of the interest rate swap agreements was $50 million and $85 million as of September 30, 2018 and December 31, 2017, respectively.
After taking into account the impact of interest rate swap agreements, as of September 30, 2018, interest rates on portions of our outstanding debt ranged from 3.25% to 6.00%, and the effective interest rate on our aggregate outstanding debt was 4.10%.
Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $1.9 million and $1.8 million for the three months ended September 30, 2018 and 2017, respectively. Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $5.1 million and $5.6 million for the nine months ended September 30, 2018 and 2017, 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, which decreases over time, and a minimum Fixed Charge Coverage Ratio. We were in compliance with required ratios and other terms and conditions at September 30, 2018.
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