Debt and Financing Arrangements

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Debt and Financing Arrangements

Debt and Financing Arrangements

Credit Facility

The credit facility includes a revolving credit facility and a term loan facility. There were outstanding borrowings under the revolving credit facility of $21.5 million as of June 30, 2021. The weighted average interest rate applicable to these outstanding borrowings was 1.12% as of June 30, 2021. There were no outstanding borrowings under the revolving credit facility as of December 31, 2020. As of June 30, 2021, the Company had available borrowings under its revolving credit facility of $366.6 million after giving effect to $11.9 million of outstanding letters of credit.

On July 3, 2020, the Company amended its credit agreement dated December 23, 2019 (the “First Amendment”) to, among other things, modify the maximum net average total leverage ratio, the interest rate margins, commitment fee and covenant baskets for each of the fiscal quarters ending after June 30, 2020 and on or before September 30, 2021 (the “Covenant Relief Period”). On March 5, 2021, the Company issued a notice exercising its right to an early termination of the Covenant Relief Period and as such is now required to comply with the previous maximum net average total leverage ratio, and the interest rate margins, commitment fee and covenant baskets reverted to the levels in effect prior to the First Amendment as discussed below. During the six months ended June 30, 2021, the Company recorded additional interest expense of approximately $0.7 million related to the acceleration of unamortized debt issuance costs in connection with terminating the Covenant Relief Period, none of which was recorded during the three months ended June 30, 2021.

Borrowings under the credit facility bear interest at a rate per annum equal to, at the applicable Borrower’s option, either (a) a base rate determined by reference to the highest of (1) the prime rate of Wells Fargo, (2) the federal funds effective rate plus 0.50% and (3) a Eurodollar Rate, subject to certain adjustments, plus 1.00% or (b) a Eurodollar Rate (or, in the case of Canadian borrowings, a Canadian Dollar Offered Rate), subject to certain adjustments, in each case, plus an applicable margin. Under the credit agreement, the applicable margin is 0% to 0.75% for base rate borrowings and 1.00% to 1.75% for Eurodollar rate or Canadian Dollar Offered Rate borrowings, in each case, depending on the Net Average Total Leverage Ratio (as defined in the credit agreement). In addition, the Company is required to pay a commitment fee on any unutilized commitments under the revolving credit facility. The commitment fee rate payable in respect of unused portions of the revolving credit facility is 0.15% to 0.30% per annum, depending on the Net Average Total Leverage Ratio. The maximum net average total leverage ratio under the credit facility is 3.50 to 1.00, which is subject to increase to 3.75 to 1.00 in connection with certain acquisitions, and the minimum consolidated interest coverage ratio (as defined in the credit agreement) is 3.00 to 1.00.

The credit agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on the Company's leverage and interest coverage ratios. The credit agreement also includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of June 30, 2021, the Company was in compliance with all covenants under the credit agreement.

Other Short-Term Borrowings

The Company has certain unsecured local credit facilities available through its subsidiaries. There were no outstanding borrowings under the Company's local credit facilities as of June 30, 2021. There were outstanding borrowings under the Company's local credit facilities of $2.8 million as of December 31, 2020. The weighted average interest rate applicable to the outstanding borrowings was 2.00% as of December 31, 2020. As of June 30, 2021, the Company had available borrowings remaining under these local credit facilities of $58.5 million.

Letters of Credit

As of June 30, 2021 and December 31, 2020, there were outstanding letters of credit related to agreements, including the Company's credit facility, totaling $15.6 million and $11.7 million, respectively, of which $12.4 million and $8.3 million, respectively, was secured. These agreements provided a maximum commitment for letters of credit of $57.5 million as of June 30, 2021.