7. Long-Term Debt

Borrowings consist of the following:


*(in thousands)*	March 31, 2012			December 31, 2011
Term loan payable in quarterly installments with a final maturity of July 31, 2013	$	116,927		$	127,557
Capitalized lease obligations		2			15

Total		116,929			127,572
Less current portion		(90,355	)		(74,423	)

Long-term debt and capital lease obligations, net of current portion	$	26,574		$	53,149

On July 31, 2008, ANSYS borrowed $355.0 million from a syndicate of banks. The interest rate on the indebtedness provides for tiered pricing with the initial rate at the prime rate + 0.50%, or the LIBOR rate + 1.50%, with step downs permitted after the initial six months under the credit agreement down to a flat prime rate or the LIBOR rate + 0.75%. Such tiered pricing is determined by the Company's consolidated leverage ratio. The Company's consolidated leverage ratio has been reduced to the lowest pricing tier in the debt agreement. On March 31, 2012, the Company made the required quarterly principal payment of $10.6 million.

For the three months ended March 31, 2012 and 2011, the Company recorded interest expense related to the term loan at interest rates of 1.33% and 1.05%, respectively. The interest expense on the term loan and amortization related to debt financing costs were as follows:

Three Months Ended

March 31, 2012

March 31, 2011

(in thousands)

Interest
Expense

Amortization

Interest
Expense

Amortization

July 31, 2008 term loan

428

204

420

252

The interest rate on the outstanding term loan balance of $116.9 million is set for the quarter ending June 30, 2012 at 1.22%, which is based on LIBOR + 0.75%. The required future principal payments on the Company's term loan as of March 31, 2012 are scheduled as follows:


*(in thousands)*
June 30, 2012	$	10,631
September 30, 2012		26,574
December 31, 2012		26,574
March 31, 2013		26,574
July 31, 2013 (maturity)		26,574

Term loan balance payable as of March 31, 2012	$	116,927

The credit agreement includes covenants related to the consolidated leverage ratio and the consolidated fixed charge coverage ratio, as well as certain restrictions on additional investments and indebtedness.