Note 11. Long-Term Debt

Long-term debt consists of the following:


(in millions)	2016			2015
Revolving credit facility	$	161.0		$	133.0
Term loan		110.0			0.0
Deferred finance costs		(2.2	)		(1.4	)

		268.8			131.6
Less current portion		(10.3	)		0.0

	$	258.5		$	131.6

On December 14, 2016, Innospec and certain subsidiaries of the Company entered into a Third Amendment and Restatement Agreement with various lenders which amends and restates the Company’s credit facility agreement dated December 14, 2011, as amended and restated on August 28, 2013 and November 6, 2015 (the “Pre-Existing Credit Agreement;” the Pre-Existing Credit Agreement, as amended and restated pursuant to the Third Amendment and Restatement Agreement, being the “Amended Credit Agreement.”)

The Amended Credit Agreement retains the $200,000,000 revolving credit facility available to the Company and adds a term loan facility of $110,000,000. The termination date of the revolving facility remains November 6, 2020. The term loan has an $11,000,000 repayment installment due December 28, 2017, a $16,500,000 installment due December 28, 2018 and a $22,000,000 installment due December 28, 2019, with the outstanding balance due on November 6, 2020.

As a result, the Company capitalized $1.2 million of refinancing costs in 2016 and $1.5 million in 2015, which are being amortized over the expected life of the facility, as shown here:


(in millions)	2016			2015
Gross cost at January 1	$	1.5		$	2.6
Capitalized in the year		1.2			1.5
Written down in the year		0.0			(2.6	)

	$	2.7		$	1.5

Accumulated amortization at January 1	$	(0.1	)	$	(1.5	)
Amortization in the year		(0.4	)		(1.2	)
Amortization written down in the year		0.0			2.6

	$	(0.5	)	$	(0.1	)

Net book value at December 31	$	2.2		$	1.4

Amortization expense was $0.4 million, $1.2 million and $0.7 million in 2016, 2015 and 2014, respectively. The charge is included in interest expense, see Note 2 of the Notes to the Consolidated Financial Statements.

The obligations of the Company under the credit facilities are secured obligations and guaranteed by certain subsidiaries of the Company. Amounts available under the revolving facility may be borrowed in U.S. dollars, Euros, British pounds and other freely convertible currencies.

The Company’s credit facilities contain restrictive clauses which may constrain our activities and limit our operational and financial flexibility. The facility obliges the lenders to comply with a request for utilization of finance unless there is an event of default outstanding. Events of default are defined in the credit facility and include a material adverse change to our assets, operations or financial condition. The facility contains a number of restrictions that limit our ability, amongst other things, and subject to certain limited exceptions, to incur additional indebtedness, pledge our assets as security, guarantee obligations of third parties, make investments, undergo a merger or consolidation, dispose of assets, or materially change our line of business.

In addition, the credit facilities contain terms which, if breached, would result in it becoming repayable on demand. It requires, among other matters, compliance with the following financial covenant ratios measured on a quarterly basis: (1) the ratio of net debt to EBITDA shall not be greater than 3.0:1 and (2) the ratio of EBITDA to net interest shall not be less than 4.0:1. Management has determined that the Company has not breached these covenants throughout the period to December 31, 2016 and does not expect to breach these covenants for the next 12 months. The credit facility is secured by a number of fixed and floating charges over certain assets which include key operating sites of the Company and its subsidiaries.

The weighted average rate of interest on borrowings was 1.72% at December 31, 2016 and 1.67% at December 31, 2015. Payments of interest on long-term debt were $2.6 million, $2.3 million and $2.3 million in 2016, 2015 and 2014, respectively.

The net cash outflows in respect of refinancing costs were $1.2 million, $1.5 million and $0.1 million in 2016, 2015 and 2014, respectively.