Note 7 - Debt

The following table provides details of the carrying values of debt as of the dates indicated (in millions):



Description	Maturity Date	June 30, 2017			December 31, 2016
Senior secured credit facility:	February 22, 2022
Revolving loans		$	564.6		$	279.9
Term loan		250.0			237.5
4.875% Senior Notes	March 15, 2023	400.0			400.0
Capital lease obligations, weighted average interest rate of 3.3%	In installments through June 30, 2022	177.9			98.6
Notes payable and other debt obligations	Varies	11.2			19.8
Total long-term debt obligations		$	1,403.7		$	1,035.8
Less unamortized deferred financing costs		(14.4		)	(9.8		)
Total debt, net of deferred financing costs		$	1,389.3		$	1,026.0
Current portion of long-term debt		75.4			64.6
Long-term debt		$	1,313.9		$	961.4

Senior Secured Credit Facility

The Company has a senior secured credit facility, (the “Credit Facility”), which was amended and restated on February 22, 2017. The Company refers to its amended and restated credit facility as the “2017 Credit Facility,” and to its previous credit facility as the “2016 Credit Facility.” The 2017 Credit Facility increased the Company’s aggregate borrowing commitments from approximately $1.2 billion to $1.5 billion, which amount is composed of $1.1 billion of revolving commitments and a term loan in the aggregate principal amount of $400 million. The amended and restated credit facility also extended the Credit Facility’s maturity date to February 22, 2022. As of June 30, 2017, term loans in the aggregate principal amount of $250 million were drawn under the 2017 Credit Facility, and additional term loans of $150 million were drawn in July 2017. The term loan is subject to amortization in quarterly principal installments that commence in December 2017, which as of June 30, 2017, amounted to $3.1 million. This amount is subject to adjustment for the additional term loans and, if applicable, certain prepayments. As of December 31, 2016, term loans in the aggregate principal amount of $238 million were outstanding.

The 2017 Credit Facility also increased the amount the Company can borrow either in Canadian dollars and/or Mexican pesos up to an aggregate equivalent amount of $300 million. The maximum amount available for letters of credit under the 2017 Credit Facility is $650 million, of which up to $200 million can be denominated in either Canadian dollars and/or Mexican pesos. The Credit Facility also provides for swing line loans of up to $75 million, and, subject to certain conditions, the Company has the option to increase revolving commitments and/or establish additional term loan tranches up to an aggregate amount of $250 million. Subject to the terms and conditions described in the Credit Facility, these additional term loan tranches may rank equal or junior in respect of right of payment and/or collateral to the Credit Facility, and may have terms and pricing that differ from the 2017 Credit Facility. Borrowings under the Credit Facility are used for working capital requirements, capital expenditures and other corporate purposes, including investments in equity or other investees, potential acquisitions or other strategic arrangements, and the repurchase or prepayment of indebtedness.

Outstanding revolving loans and the term loan under the Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) a Eurocurrency Rate, as defined in the 2017 Credit Facility, plus a margin of 1.25% to 2.00% (under the 2016 Credit Facility, the margin was from 1.00% to 2.00%), or (b) a Base Rate, as defined in the 2017 Credit Facility, plus a margin of 0.25% to 1.00% (under the 2016 Credit Facility, the margin was from 0.00% to 1.00%). The Base Rate equals the highest of (i) the Federal Funds Rate, as defined in the Credit Facility, plus 0.50%, (ii) Bank of America’s prime rate, and (iii) the Eurocurrency Rate plus 1.00%. Financial standby letters of credit and commercial letters of credit issued under the 2017 Credit Facility are subject to a letter of credit fee of 1.25% to 2.00% (under the 2016 Credit Facility, the letter of credit fee was from 1.00% to 2.00%), and performance standby letters of credit are subject to a letter of credit fee of 0.50% to 1.00% under the Credit Facility. The Company must also pay a commitment fee to the lenders of 0.20% to 0.40% on any unused availability under the Credit Facility. In each of the foregoing cases, the applicable margin or fee is based on the Company’s Consolidated Leverage Ratio, as defined in the Credit Facility, as of the then most recent fiscal quarter.

As of June 30, 2017 and December 31, 2016, outstanding revolving loans, which included $153 million and $119 million, respectively, of borrowings denominated in foreign currencies, accrued interest at weighted average rates of approximately 3.60% and 3.71% per annum, respectively. The term loan accrued interest at a rate of 2.73% and 2.77% as of June 30, 2017 and December 31, 2016, respectively. Letters of credit of approximately $305.6 million and $314.3 million were issued as of June 30, 2017 and December 31, 2016, respectively. As of June 30, 2017 and December 31, 2016, letters of credit fees accrued at 0.625% and 1.00% per annum, respectively, for performance standby letters of credit, and at 1.50% and 2.00% per annum, respectively, for financial standby letters of credit. Outstanding letters of credit mature at various dates and most have automatic renewal provisions, subject to prior notice of cancellation. As of June 30, 2017, total availability of $379.8 million under the 2017 Credit Facility included $150.0 million of term loans and $229.8 million of availability for revolving loans or new letters of credit. As of December 31, 2016, total availability of $405.9 million was available for revolving loans, or up to $335.7 million for new letters of credit. Revolving loan borrowing capacity included $147.4 million and $80.9 million of availability in either Canadian dollars or Mexican pesos as of June 30, 2017 and December 31, 2016, respectively. The unused facility fee as of June 30, 2017 and December 31, 2016 accrued at a rate of 0.25% and 0.40%, respectively.

The Credit Facility is guaranteed by certain subsidiaries of the Company (the “Guarantor Subsidiaries”) and the obligations under the Credit Facility are secured by substantially all of the Company’s and the Guarantor Subsidiaries’ respective assets, subject to certain exceptions. The Credit Facility requires that the Company maintain a Maximum Consolidated Leverage Ratio, as defined in the Credit Facility, of 3.50 (subject to the Acquisition Adjustment described below). The Credit Facility also requires that the Company maintain a Minimum Consolidated Interest Coverage Ratio, as defined in the Credit Facility, of 3.00. The Credit Facility provides that, for purposes of calculating the Consolidated Leverage Ratio, certain cash charges may be added back to the calculation of Consolidated EBITDA, as defined in the Credit Facility, and funded indebtedness excludes undrawn standby performance letters of credit. Additionally, notwithstanding the terms discussed above, subject to certain conditions, if a permitted acquisition or series of permitted acquisitions having consideration exceeding $50 million occurs during a fiscal quarter, the Consolidated Leverage Ratio may be temporarily increased to up to 3.75 during such fiscal quarter and the subsequent two fiscal quarters. Such right may be exercised no more than two times during the term of the Credit Facility. Subject to customary exceptions, the Credit Facility limits the borrowers’ and the Guarantor Subsidiaries’ ability to engage in certain activities, including acquisitions, mergers and consolidations, debt incurrence, investments, capital expenditures, asset sales, debt prepayments, lien incurrence and the making of distributions or repurchases of capital stock. However, distributions payable solely in capital stock are permitted. The Credit Facility provides for customary events of default and carries cross-default provisions with the Company’s other significant debt instruments, including the Company’s indemnity agreement with its surety provider, as well as customary remedies, including the acceleration of repayment of outstanding amounts and other remedies with respect to the collateral securing the Credit Facility obligations.

Other Credit Facilities. The Company has other credit facilities that support the working capital requirements of its foreign operations. Borrowings under these credit facilities, which have varying dates of maturity and are generally renewed on an annual basis, are denominated in Canadian dollars. As June 30, 2017 and December 31, 2016, maximum borrowing capacity totaled Canadian $20.0 million and $40.0 million, respectively, or approximately $15.4 million and $29.8 million, respectively. As of June 30, 2017 and December 31, 2016, outstanding borrowings totaled approximately $7.0 million and $13.4 million, respectively, and accrued interest at a weighted average rate of approximately 3.5% and 3.6%, respectively. Outstanding borrowings that are not renewed are repaid with borrowings under the Company’s senior secured credit facility. Accordingly, the carrying amounts of the Company’s borrowings under its other credit facilities, which are included within notes payable and other debt obligations in the table above, are classified within long-term debt in the Company’s consolidated balance sheets. The Company’s other credit facilities are subject to customary provisions and covenants.

Debt Guarantees and Covenants

The 4.875% Senior Notes are senior unsecured unsubordinated obligations and rank equal in right of payment with existing and future unsubordinated debt, and rank senior in right of payment to existing and future subordinated debt and are fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by certain of the Company’s existing and future 100%-owned direct and indirect domestic subsidiaries that are each guarantors of the Company’s Credit Facility or other outstanding indebtedness. See Note 16 - Supplemental Guarantor Condensed Unaudited Consolidating Financial Information.

MasTec was in compliance with the provisions and covenants of its outstanding debt instruments as of June 30, 2017 and December 31, 2016.

Additional Information

As of June 30, 2017 and December 31, 2016, accrued interest payable, which is recorded within other accrued expenses in the consolidated balance sheets, totaled $8.8 million and $8.5 million, respectively. Additionally, in connection with the 2017 Credit Facility amendment, the Company paid $6.2 million in financing costs for the six month period ended June 30, 2017. For additional information pertaining to the Company’s debt instruments, including its 4.875% Senior Notes, see Note 7 - Debt in the Company’s 2016 Form 10-K.