LINE OF CREDIT AND TERM LOAN

3 Months Ended

Mar. 31, 2016

LINE OF CREDIT AND TERM LOAN

10. LINE OF CREDIT AND TERM LOAN

On May 23, 2013, Syntel entered into a Credit Agreement with Bank of America, N.A. for $150 million in credit facilities consisting of a three-year term loan facility of $60 million and a three year revolving credit facility of $90 million. The maturity date of both the three year term loan facility and the three year revolving credit facility is May 23, 2016. Currently, the Company is in discussion with the bank for refinancing of these facilities. The Credit Agreement is guaranteed by two of the Company’s domestic subsidiaries, SkillBay and Syntel Consulting (collectively, the “Guarantors”).In connection with the credit facilities, the Company and the Guarantors also entered into a related security and pledge agreement granting a security interest in the assets of the Company and the Guarantors, including, without limitation, a pledge of 65% of the equity interests in Syntel India.

The interest rates applicable to loans incurred under the Credit Agreement are (a) with respect to Revolving Loans, (i) the Eurodollar Rate plus 1.25% with respect to Eurodollar Loans and (ii) the Base Rate plus 0.25% with respect to Base Rate Loans, and (b) with respect to the Term Loan, (i) the Eurodollar Rate plus 1.50% with respect to Eurodollar Loans and (ii) the Base Rate plus 0.50% with respect to Base Rate Loans (each as defined in the Credit Agreement).

As of March 31, 2016, the interest rate was 1.62% for the three year revolving credit facility and was 1.87% for the three year term loan facility.

With the interest rate charged on the credit facilities being variable, the fair value of the credit facilities approximates their reported value as of March 31, 2016, as it reflects the current market value.

Principal payments on the term loan are due every quarter up to December 31, 2015. During the three months ended March 31, 2016 no payment was made. The related Credit Agreement requires compliance with certain financial ratios and covenants. As of March 31, 2016, the Company was in compliance with all debt covenants.

As of March 31, 2016 the outstanding balances of the term loan and line of credit, including interest, were $39.83 million and $90.15 million, respectively.

Future scheduled payments on the three-year revolving credit facility and term loan, at March 31, 2016 are as follows:

	(In thousands)
MAY 23, 2016	$	129,750