Long-Term Debt

Long-term debt consists of the following (in thousands):



	Successor
	December 31,			December 31,
	2017			2016
Credit Facilities:
Term Loan	$	162,525		$	164,175
Credit Facility	64,000			—
Capital leases and other notes	100,615			78,046
Unamortized discount and deferred debt costs	(11,901		)	(19,001		)
	315,239			223,220
Less current portion	55,997			38,468
Long-term debt	$	259,242		$	184,752

Debt Discounts

The following discounts on debt represent the unamortized discount to fair value of our Amended and Restated Term Loan Credit Agreement and the short-term and long-term portions of the fair value discount of capital leases (in thousands):



	December 31, 2017		December 31, 2016
Unamortized discount on Term Loan	$	9,187	$	11,401
Unamortized discount on Capital Leases - short-term	1,657		1,600
Unamortized discount on Capital Leases - long-term	891		6,000
Unamortized term loan issuance costs	166		—
	$	11,901	$	19,001

Credit Facility

On September 29, 2017, Basic entered into the Credit Facility pursuant to (i) a Receivables Transfer Agreement (the “Transfer Agreement”) entered into by and among Basic Energy Services, L.P. (“BES LP”), as the initial originator and Basic Energy Receivables, LLC (the “SPE”), as the transferee and (ii) the Credit Agreement.

Under the Transfer Agreement, BES LP will sell or contribute, on an ongoing basis, its accounts receivable and related security and interests in the proceeds thereof (the “Transferred Receivables”) to the SPE. The SPE will finance a portion of its purchase of the accounts receivable through borrowings, on a revolving basis, of up to $100 million (with the ability to request an increase in the size of the Credit Facility by $50 million) under the Credit Agreement, and such borrowings will be secured by the accounts receivable. The SPE will finance its purchase of the remaining portion of the accounts receivable by issuing subordinated promissory notes to BES LP and/or by contributing the remaining portion of the accounts receivables in exchange for equity in the SPE in the amount of the purchase price of the receivable not paid in cash. BES LP will be responsible for the servicing, administration and collection of the accounts receivable, with all collections going into lockbox accounts. The Company has provided a customary guaranty of performance to the administrative agent with respect to certain obligations of BES LP and any successor servicer under the Credit Facility. In connection with entering into the Credit Facility, on September 29, 2017, the Company amended the Term Loan Agreement to permit, among other things, (i) the acquisition of the Transferred Receivables by the SPE pursuant to the Transfer Agreement, free and clear of the liens under the Term Loan Agreement and (ii) the transactions contemplated under each of the Transfer Agreement and Credit Agreement. The Company consolidates the SPE, which the Company determined to be a variable interest entity ("VIE"), and all intercompany activity is eliminated upon consolidation. In concluding the SPE is a VIE, the Company determined it is the primary beneficiary of the SPE, as all activities of SPE are for the benefit of the Company. The accounts receivable held at the SPE are used solely to settle the debt obligations of the SPE. The consolidated financial statements include approximately $148.4 million of SPE accounts receivable and $64.0 million of SPE debt.

Loans under our Credit Facility bear interest at a fluctuating rate that is (a) the Alternate Base Rate plus 2.25% with respect to ABR Loans or (b) the Adjusted LIBO Rate plus 3.25% with respect to Eurodollar Loans (each as defined in the Credit Agreement). A commitment fee equal to 0.375% per annum will be payable on the unused commitments under the Credit Agreement. The loans made pursuant to the Credit Agreement will mature on September 29, 2021. The interest rate was 4.63% at December 31, 2017.

On October 27, 2017, the Company entered into Amendment No. 1. Among other things, Amendment No. 1 (i) increased the aggregate commitments under the Credit Agreement from $100 million to $120 million, (ii) appointed CIT Bank, N.A. to serve as syndication agent and (iii) added new lenders and amended the commitment schedule to the Credit Agreement.

As of December 31, 2017, Basic had $45.2 million of letters of credit outstanding secured by restricted cash borrowed under the Credit Facility. Basic had borrowings under the Credit Facility of $64.0 million as of December 31, 2017, giving Basic $11.5 million of available borrowing capacity under the Credit Facility.

Second Amended and Restated Revolving Credit Facility

On December 23, 2016, the Company entered into a Second Amended and Restated ABL Credit Agreement (the "Second A&R Credit Agreement") with Bank of America, N.A., as administrative agent for the lenders (the “Credit Facility Administrative Agent”), a collateral management agent, the swing line lender and a letters of credit issuer, Wells Fargo Bank, National Association, as a collateral management agent and syndication agent, and the financial institutions party thereto, as lenders. Basic terminated this facility on September 29, 2017.

The Second A&R Credit Agreement provides for a $75 million revolving credit loan facility with a $65 million letter of credit sublimit and $10 million swing line sublimit. The obligations under the Second A&R Credit Agreement are guaranteed on a joint and several basis by each of our current subsidiaries, other than our immaterial subsidiaries, and are secured by substantially all of our and our guarantors' assets as collateral under the Third Amended and Restated Security Agreement dated as of the Effective Date (described below).

Loans under the Second A&R Credit Agreement bore interest, at the Company’s option, at a rate equal to either (i) the London interbank offered rate (the “Eurodollar Rate”) plus a rate of 2.5% to 4.5% depending on the consolidated leverage ratio at the time of the determination or (ii) a base rate equal to the highest of (a) the federal funds rate, plus 0.50%, (b) the prime rate then in effect publicly announced by Bank of America and (c) the Eurodollar Rate plus 1.0%, the highest is then is added to a rate ranging from 1.5% to 3.5% depending on the consolidated leverage ratio at the time of the determination.

Amended and Restated Term Loan Agreement

On the Effective Date, we entered into an Amended and Restated Term Loan Credit Agreement (the “Amended and Restated Term Loan Agreement) with a syndicate of lenders and U.S. Bank National Association, as administrative agent for the lenders (the “Term Loan Administrative Agent”). Under the Amended and Restated Term Loan Agreement, on the Effective Date, (i) the outstanding principal amount of pre-petition term loans of each pre-petition term lender were exchanged for loans under the Amended and Restated Term Loan Agreement in an amount equal to such pre-petition term lender’s aggregate outstanding principal amount of pre-petition term loans as of the Effective Date, as determined immediately prior to such exchange and (ii) all accrued and unpaid interest on such pre-petition term loans as of the Effective Date are deemed to be accrued and unpaid interest on the loans. Following such exchange, the aggregate outstanding principal amount of the loans under the Amended and Restated Term Loan Agreement was $164.2 million.

Borrowings under the Amended and Restated Term Loan Agreement will mature on February 26, 2021. We may voluntarily prepay the loans under the Amended and Restated Term Loan Agreement in whole or in part without premium or penalty, provided that certain conditions set forth therein are met. We are required to prepay the Amended and Restated Term Loan Agreement in the case of a change of control, certain sales of our assets, certain issuances of indebtedness and under certain other circumstances, in which case such prepayment may be subject to an applicable premium.

Each loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to 13.50%. In addition, we will be responsible for the applicable lenders’ fees, including a closing payment equal to 7.00% of the aggregate principal amount of commitments of each lender under the Amended and Restated Term Loan Agreement as of the effective date, and administrative agent fees.

Other Debt

Basic has a variety of other capital leases and notes payable outstanding, which are generally customary in Basic’s business. None of these debt instruments are material individually. There is a minimum liquidity covenant requiring unrestricted cash and cash equivalents balances to be at or above $25.0 million. At December 31, 2017, Basic was in compliance with this covenant.

As of December 31, 2017 the aggregate maturities of debt, including capital leases, for the next five years and thereafter are as follows (in thousands):



	Debt		Capital Leases
2018	1,650		56,004
2019	1,650		24,163
2020	1,650		14,275
2021	221,575		5,974
Thereafter	—		199
	$	226,525	$	100,615

Basic’s interest expense consisted of the following (in thousands):



	Successor			Predecessor
	Years ended December 31,
	2017			2016		2015
Cash payments for interest	$	25,616		$	49,621	$	61,587
Commitment and other fees paid	442			2,898		2,484
Amortization of discount on term loan and capital leases, and debt issuance costs	7,527			9,295		3,362
Change in accrued interest	4,440			34,719		563
Capitalized interest	(660		)	—		(139		)
Other	107			92		107
Total interest expense	$	37,472		$	96,625	$	67,964