7. Long‑Term Debt

The Company’s long‑term debt consisted of the following as of April 30, 2019 and 2018:


	April 30,
	2019		2018
	(in thousands)
First Lien Facility (1) (2)	$	972,650	$	563,179
ABL Facility		43,972		—
Capital lease obligations		109,286		18,564
Installment notes at fixed rates up to 5.0%, due in monthly and annual installments through 2024 (3)		15,287		14,143
Carrying value of debt		1,141,195		595,886
Less current portion		42,118		16,284
Long-term debt	$	1,099,077	$	579,602

(1)

Net of unamortized discount of $2,149 and $2,536 as of April 30, 2019 and 2018, respectively.

(2)

Net of deferred financing costs of $12,072 and $6,125 as of April 30, 2019 and 2018, respectively.

(3)

Net of unamortized discount of $1,200 and $1,534 as of April 30, 2019 and 2018, respectively.

First Lien Facility

The Company’s wholly‑owned subsidiaries, GYP Holdings II Corp., as parent guarantor (in such capacity, “Holdings”), and GYP Holdings III Corp., as borrower (in such capacity, the “Borrower” and, together with Holdings and the Subsidiary Guarantors (as defined below), the “Loan Parties”), entered into a senior secured first lien term loan facility (the “First Lien Facility”) in the aggregate amount of $550.0 million. The First Lien Facility permits the Borrower to add one or more incremental term loans up to a fixed amount of $100.0 million plus a certain amount depending on a secured first lien leverage ratio test included in the First Lien Facility. As of April 30, 2019, the First Lien Facility amortized in nominal quarterly installments of $2.5 million, or 0.25% of the aggregate principal amount of the First Lien Facility and had a maturity date of June 1, 2025. Provided that the individual affected lenders agree accordingly, the maturities of the First Lien Facility may, upon the Borrower’s request and without the consent of any other lender, be extended. GYP Holdings II Corp., the sole entity between borrower and financial reporting entity, is a holding company with no other operations, assets, liabilities or cash flows other than through its ownership of GYP Holdings III Corp. (borrower) and its operating subsidiaries.

On September 27, 2016, the Company entered into an Incremental First Lien Term Commitments Amendment (the “First Amendment”) to the First Lien Credit Agreement. The First Amendment amended the First Lien Credit Agreement to, among other things, provide for a new first lien term loan facility under the First Lien Credit Agreement in the aggregate principal amount of $481.2 million with an interest at a floating rate based on LIBOR, with a 1.00% floor, plus 3.50%, representing a twenty five basis point improvement compared to the interest rate of the existing First Lien Term Loan immediately prior to giving effect to the First Amendment. Net proceeds from the new First Lien Term Loan were used to repay the Company’s existing First Lien Term Loan of $381.2 million and a portion of the loans under the ABL Facility as well as to pay related expenses. The Company recorded a write-off of debt discount and deferred financing fees of $1.5 million, which is included in write-off of discount and deferred financing fees in the Consolidated Statements of Operations and Comprehensive Income for the year ended April 30, 2017.

On June 7, 2017, the Company entered into the Second Amendment to First Lien Credit Agreement (the “Second Amendment”), among the Borrower, Holdings, the other Loan Parties party thereto, Credit Suisse AG, as administrative agent and as 2017 incremental first lien lender, which amended the First Lien Credit Agreement (as amended by the First Amendment and as supplemented from time to time). The Second Amendment provided for a new first lien term loan facility under the First Lien Credit Agreement in the aggregate principal amount of $577.6 million due on April 1, 2023 with interest at a floating rate based on LIBOR, with a 1.00% floor, plus 3.00%, representing a fifty basis point improvement compared to the interest rate of the existing First Lien Facility immediately prior to giving effect to the Second Amendment. Net proceeds were used to repay the existing First Lien Loan outstanding balance of $477.6 million and approximately $94.0 million of loans under its asset based revolving credit facility as well as to pay related expenses. The Company recorded a write off of debt discount and deferred financing fees of $0.1 million, which is included in write-off of discount and deferred financing fees in the Consolidated Statements of Operations and Comprehensive Income for the year ended April 30, 2018.

On June 1, 2018, the Company entered into the Third Amendment that provided for a new first lien term loan facility under the First Lien Credit Agreement in the aggregate principal amount of $996.8 million due in June 2025 that bears interest at a floating rate based on LIBOR plus 2.75%, with a 0% floor. The net proceeds from the new first lien term loan facility were used to repay the Company’s existing First Lien Loan outstanding balance of approximately $571.8 million and to finance the acquisition of Titan. As of April 30, 2019, the applicable rate of interest was 5.23%.

Second Lien Facility

On June 1, 2016, the Company used its initial public offering (“IPO”) proceeds together with cash on hand to repay the $160.0 million principal amount of its term loan debt outstanding under its senior secured second lien term loan facility (the “Second Lien Facility”), which was a payment in full of the entire loan balance due under the Second Lien Facility. The Company recorded a write-off of debt discount and deferred financing fees of $5.4 million, which is included in write-off of discount and deferred financing fees in the Consolidated Statements of Operations and Comprehensive Income for the year ended April 30, 2017.

Asset Based Lending Facility

The Company has an Asset Based Lending Credit Facility (the “ABL Facility”) that provides for aggregate revolving commitments of $345.0 million (including same day swing line borrowings of $34.5 million). GYP Holdings III Corp. is the lead borrower (in such capacity, the “Lead Borrower”). Extensions of credit under the ABL Facility are limited by a borrowing base calculated periodically based on specified percentages of the value of eligible inventory and eligible accounts receivable, subject to certain reserves and other adjustments.

At the Company’s option, the interest rates applicable to the loans under the ABL Facility are based at LIBOR or base rate plus, in each case, an applicable margin. The margins applicable for each elected interest rate are subject to a pricing grid, as defined in the ABL Facility agreement, based on average daily availability for the most recent fiscal quarter. As of April 30, 2019, the applicable rate of interest was 5.75%. The ABL Facility also contains an unused commitment fee subject to utilization, as included in the ABL Facility agreement.

During the year ended April 30, 2019, the Company made net borrowings under the ABL facility of $44.0 million. As of April 30, 2019, the Company had available borrowing capacity of $291.4 million under the ABL Facility. The ABL Facility will mature on November 18, 2021 unless the individual affected lenders agree to extend the maturity of their respective loans under the ABL Facility upon the Company’s request and without the consent of any other lender. The ABL Facility contains a cross default provision with the First Lien Facility.

Terms of the ABL Facility and Term Loan Facilities

Collateral

The ABL Facility is collateralized by (a) first priority perfected liens on the following assets of the Loan Parties: (i) accounts receivable; (ii) inventory; (iii) deposit accounts; (iv) cash and cash equivalents; (v) tax refunds and tax payments; (vi) chattel paper; and (vii) documents, instruments, general intangibles, securities accounts, books and records, proceeds and supporting obligations related to each of the foregoing, subject to certain exceptions (collectively, “ABL Priority Collateral”) and (b) second priority perfected liens on the remaining assets of the Loan Parties not constituting ABL Priority Collateral, subject to customary exceptions (collectively, “Term Priority Collateral”).

The First Lien Facility is collateralized by (a) first priority liens on the Term Priority Collateral and (b) second priority liens on the ABL Priority Collateral, subject to customary exceptions.

Prepayments

The First Lien Facility may be prepaid at any time. Under certain circumstances and subject to certain exceptions, the Term Loan Facilities will be subject to mandatory prepayments in the amount equal to:

100% of the net proceeds of certain asset sales and issuances or incurrences of nonpermitted indebtedness; and

50% of annual excess cash flow for any fiscal year, such percentage to decrease to 25% or 0% depending on the attainment of certain total leverage ratio targets.

As of April 30, 2019, there was no prepayment required related to excess cash flow.

The ABL Facility may be prepaid at the Company’s option at any time without premium or penalty and will be subject to mandatory prepayment if the outstanding ABL Facility exceeds the lesser of the (i) borrowing base and (ii) the aggregate amount of commitments. Mandatory prepayments do not result in a permanent reduction of the lenders’ commitments under the ABL Facility.

Guarantees

Holdings guarantees the payment obligations under the ABL Facility and the First Lien Facility. Certain of Holdings’ subsidiaries (i) guarantee the payment obligations under the Term Loan Facilities (in such capacity, the “Subsidiary Guarantors”) and (ii) are co‑borrowers under the ABL Facility.

Covenants

The ABL Facility contains certain affirmative covenants, including financial and other reporting requirements. The Company was in compliance with all such covenants as of April 30, 2019.

The First Lien Facility contains a number of covenants that limit the Company’s ability and the ability of the Company’s restricted subsidiaries, as described in the First Lien Credit Agreement, to: incur more indebtedness; pay dividends, redeem or repurchase stock or make other distributions; make investments; create restrictions on the ability of our restricted subsidiaries to pay dividends to us or make other intercompany transfers; create liens securing indebtedness; transfer or sell assets; merge or consolidate; enter into certain transactions with our affiliates; and prepay or amend the terms of certain indebtedness. The Company was in compliance with all covenants as of April 30, 2019.

Events of Default

The ABL Facility and First Lien Facility also provide for customary events of default, including non‑payment of principal, interest or fees, violation of covenants, material inaccuracy of representations or warranties, specified cross default to other material indebtedness, certain bankruptcy events, certain ERISA events, material invalidity of guarantees or security interest, material judgments and changes of control.

Titan Revolving Credit Facility

In connection with the acquisition of Titan on June 1, 2018, the Company assumed Titan’s revolving credit facility (the “Titan Facility”) that provides for aggregate revolving commitments of $22.3 million ($30.0 million Canadian dollars), as amended. The Titan Facility bears interest at the Canadian prime rate plus a marginal rate based on the level determined by Titan’s total debt to EBITDA ratio at the end of the most recently completed fiscal quarter or year. As of April 30, 2019, no amounts were outstanding under the Titan Facility and the Company had available borrowing capacity of approximately $22.3 million under the Titan Facility. The Titan Facility matures on June 28, 2022.

Installment Notes

The Company’s installment notes of $15.3 million and $14.1 million as of April 30, 2019 and 2018, respectively, include notes for subsidiary stock repurchases from stockholders, notes for the payout of stock appreciation rights and a note to the seller of an acquired company. See Note 12, “Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests.”

Debt Maturities

As of April 30, 2019, the maturities of long‑term debt were as follows:


	First Lien			ABL	Capital		Installment
	Facility(1)			Facility	Leases		Notes(2)		Total
Years ending April 30,	(in thousands)
2020	$	9,968	$	—	$	27,906	$	4,363	$	42,237
2021		9,968		—		26,764		4,053		40,785
2022		9,968		43,972		23,344		3,617		80,901
2023		9,968		—		17,708		3,584		31,260
2024		9,968		—		10,934		870		21,772
Thereafter		937,031		—		2,630		—		939,661
	$	986,871	$	43,972	$	109,286	$	16,487	$	1,156,616

(1)Gross of unamortized discount of $2,149 and deferred financing costs of $12,072 as of April 30, 2019.

(2)Gross of unamortized discount of $1,200 as of April 30, 2019.