Long-Term Debt

2015 Credit Agreement

On May 5, 2015, Switch, Ltd. entered into a credit agreement ("2015 Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders, which replaced its previous $250.0 million credit agreement. The 2015 Credit Agreement consisted of a $200.0 million term loan facility (the "2015 Term Loan Facility") and a $400.0 million revolving credit facility (the "2015 Revolving Credit Facility," and, together with the 2015 Term Loan Facility, the "2015 Facilities"), each with a term of five years.

Upon satisfying certain conditions, the 2015 Credit Agreement provided that Switch, Ltd. could increase the amount available for borrowing under the 2015 Facilities no more than five times (up to an additional $125.0 million in total) during the term of the 2015 Credit Agreement. On May 2, 2016, Switch, Ltd. amended the 2015 Credit Agreement to increase the aggregate amount available for borrowing under the 2015 Facilities by an additional $125.0 million and to modify certain other terms and conditions. On the closing date of the amendment, the Company recorded additional deferred debt issuance costs of $1.0 million, of which $860,000 related to the 2015 Revolving Credit Facility and $145,000 related to the 2015 Term Loan Facility. Total deferred debt issuance costs as of December 31, 2016 totaled $3.4 million, net of accumulated amortization of $1.4 million. Net debt issuance costs related to the 2015 Term Loan Facility are presented together with long-term debt and were $2.2 million as of December 31, 2016. Net debt issuance costs associated with the 2015 Revolving Credit Facility are included within other assets and were $1.1 million as of December 31, 2016.

The 2015 Facilities were collateralized by substantially all of Switch's tangible and intangible personal property and guaranteed by certain of Switch, Ltd.'s wholly-owned subsidiaries. Interest on the 2015 Facilities was calculated based on a base rate plus the applicable margin or a LIBOR rate plus the applicable margin, at Switch, Ltd.'s election. Interest calculations were based on 365/366 days for a base rate loan and 360 days for a LIBOR loan. Base rate interest payments were due and payable in arrears on the last day of each calendar quarter, beginning December 31, 2015. LIBOR rate interest payments were due and payable on the last day of each selected interest period (not to extend beyond three-month intervals).

The 2015 Facilities had, among other things, financial and other covenants. Beginning with the fiscal quarter ended June 30, 2015, the 2015 Credit Agreement required compliance with the consolidated total leverage and consolidated fixed charge coverage ratios (as defined in the 2015 Credit Agreement). As of December 31, 2016, the maximum consolidated total leverage ratio was 4.25 to 1.00 and the minimum consolidated fixed charge coverage ratio was 1.50 to 1.00. The maximum consolidated total leverage ratio was subject to change periodically for future fiscal quarters. Switch, Ltd. was in compliance with these covenants as of December 31, 2016.

The terms of the 2015 Facilities limited Switch, Ltd.'s ability, among other things, to return capital to equity interest holders, grant liens on its assets, and incur additional debt. Switch, Ltd.'s net assets were subject to restrictions, including the ability to pay distributions. As of December 31, 2016, none of Switch, Ltd.'s net assets were deemed restricted under the 2015 Facilities.

2017 Credit Agreement

On June 27, 2017, Switch, Ltd. entered into an amended and restated credit agreement ("2017 Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders, consisting of a $600.0 million term loan facility (the "2017 Term Loan Facility"), maturing on June 27, 2024, and a $500.0 million revolving credit facility (the "2017 Revolving Credit Facility," and, together with the 2017 Term Loan Facility, the "2017 Facilities"), maturing on June 27, 2022, which replaced its 2015 Credit Agreement. The 2017 Term Loan Facility is subject to principal amortization of $1.5 million per calendar quarter commencing on September 30, 2017. On December 28, 2017, Switch, Ltd. amended the 2017 Credit Agreement (the "First Amendment") to reduce the interest rate margin applicable to borrowings under the 2017 Facilities. In addition, the First Amendment has a prepayment premium of 1.0% of the aggregate principal outstanding under the 2017 Term Loan Facility in the event that, prior to the six-month anniversary of the closing date of the First Amendment, Switch, Ltd. enters into another repricing transaction.

Upon satisfying certain conditions, the 2017 Credit Agreement provides that Switch, Ltd. can increase the amount available for borrowing under the 2017 Facilities no more than five times (up to an additional $75.0 million in total, plus an additional amount subject to certain leverage restrictions) during the term of the 2017 Credit Agreement.

The Company recorded debt issuance costs of $8.8 million on the closing date of the 2017 Credit Agreement, of which $5.6 million related to the 2017 Term Loan Facility and $3.2 million related to the 2017 Revolving Credit Facility. In connection with the 2017 Credit Agreement, $811,000 of the unamortized debt issuance costs on the 2015 Revolving Credit Facility continued to be deferred as a result of modification accounting. The Company recorded additional debt issuance costs of $110,000 related to the 2017 Revolving Credit Facility and interest expense of $137,000 representing third-party costs related to the 2017 Term Loan Facility on the closing date of the First Amendment as a result of modification accounting. Unamortized debt issuance costs as of December 31, 2017 totaled $9.0 million. Unamortized debt issuance costs related to the 2017 Term Loan Facility are presented together with long-term debt and were $5.2 million as of December 31, 2017. As of December 31, 2017, unamortized debt issuance costs are included within other assets and were comprised of $3.0 million related to the 2017 Revolving Credit Facility and $730,000 associated with the modification accounting on the 2015 Revolving Credit Facility.

The 2017 Facilities are collateralized by substantially all of Switch's tangible and intangible personal property and guaranteed by certain of Switch, Ltd.'s wholly-owned subsidiaries. Interest on the 2017 Facilities is calculated based on the base rate plus the applicable margin or a LIBOR rate plus the applicable margin, at Switch, Ltd.'s election. Interest calculations are based on 365/366 days for a base rate loan and 360 days for a LIBOR loan. Base rate interest payments are due and payable in arrears on the last day of each calendar quarter, beginning September 30, 2017. LIBOR rate interest payments are due and payable on the last day of each selected interest period (not to extend beyond three-month intervals). In addition, the 2017 Revolving Credit Facility incurs a fee on unused lender commitments based on the applicable margin and payments are due and payable in arrears on the last day of each calendar quarter, beginning September 30, 2017.

The 2017 Facilities have, among other things, financial and other covenants. Beginning with the fiscal quarter ended June 30, 2017, the 2017 Credit Agreement required compliance with the consolidated total leverage ratio (as defined in the 2017 Credit Agreement). As of December 31, 2017, the maximum consolidated total leverage ratio was 5.50 to 1.00. The maximum consolidated total leverage ratio is subject to change periodically for future fiscal quarters. Switch, Ltd. was in compliance with this covenant as of December 31, 2017.

The terms of the 2017 Facilities limit Switch, Ltd.'s ability, among other things, to incur additional debt, incur additional liens, encumbrances or contingent liabilities, and pay distributions or make certain other restricted payments (with certain exceptions and baskets, including a restricted payment basket of $15.0 million per fiscal year).

Loss on Extinguishment of Debt

During the year ended December 31, 2017, the Company recorded a $3.6 million loss related to the refinancing of Switch, Ltd.'s 2015 Credit Agreement and closing of Switch, Ltd.'s 2017 Credit Agreement in June 2017. The loss was comprised of the write-off of previously unamortized debt issuance costs of $2.1 million and lender fees of $1.5 million.

Long-term debt consists of the following as of:



	December 31,
	2017			2016
	(in thousands)
2015 Term Loan Facility, interest paid at the defined LIBOR rate plus applicable interest margin (2.77% at December 31, 2016); matures May 2020	$	—		$	185,000
2017 Term Loan Facility, interest paid at the defined LIBOR rate plus applicable interest margin (3.81% at December 31, 2017); matures June 2024	597,000			—
Less: unamortized debt issuance costs	(5,241		)	(2,233		)
	591,759			182,767
2015 Revolving Credit Facility, interest paid at the defined LIBOR rate plus applicable interest margin (2.71% at December 31, 2016); matures May 2020	—			289,300
2017 Revolving Credit Facility, interest paid at the defined LIBOR rate plus applicable interest margin; matures June 2022	—			—
	$	591,759		$	472,067

As of December 31, 2017, long-term debt maturities are as follows (in thousands):



2018	$	6,000
2019	6,000
2020	6,000
2021	6,000
2022	6,000
Thereafter	567,000
	597,000
Less: unamortized debt issuance costs	(5,241		)
	$	591,759