Note 11. Long-Term Debt

On September 24, 2013, we entered into a new senior secured Credit Facility. The Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a revolving credit facility (“LOC”) in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans. The Credit Facility has four lenders, each with commitments ranging from $15 million to $30 million. The facility carries an accordion feature, whereby an additional term loan up to $50 million may be advanced subject to certain financial requirements.

In conjunction with entering into the new Credit Facility, we used the Credit Facility to refinance and retire all indebtedness outstanding under our previously-existing revolving credit facility scheduled to expire in September 2014 and our five-year variable rate financing agreement we entered into on November 30, 2012. As a result, both the old revolving credit facility and the old five-year variable rate facilities were terminated concurrently with the establishment of the new Credit Facility. The total amount paid off was approximately $46.6 million, with $21.0 million of this amount drawn from the new LOC. We categorized this refinancing as a debt extinguishment. The total fees associated with this facility included $1.4 million of bank fees and $148,000 of third party fees. All bank fees associated with the term loan facility were expensed during the third quarter of 2013, while all the fees associated with new LOC facility are being amortized over the term of the Credit Facility.

As of the dates indicated below, long-term debt consisted of the following:


		Interest Rate					Total Principal Due
(All Amount in Thousands)		June 30,		December 31,		Maturity	June 30,		December 31,
Description		2014		2013		Date	2014		2013
Secured:
Notes Payable – Variable Rate	(1)	2.7310	%	2.7451	%	2018	$	13,743	$	15,460
Notes Payable – Variable Rate		2.7304	%	2.7400	%	2018		43,240		45,081
Notes Payable – Variable Rate		2.5009	%	2.5188	%	2017		10,263		11,383
Notes Payable – Variable Rate		2.9036	%	2.9181	%	2018		11,360		12,780
Notes Payable – Variable Rate	(1)	2.7286	%	2.7384	%	2018		16,022		16,651
Notes Payable – Variable Rate	(2)	3.6400	%	2.8964	%	2020		30,993		31,437
Notes Payable – Variable Rate	(3)	3.9900	%	3.7500	%	2018		43,313		44,437
Secured Line of Credit	(3)	3.9009	%	3.6700	%	2018		31,000		21,000
								199,934		198,229
		Less Current Maturities						(19,902)		(19,213)
							$	180,032	$	179,016

We entered into a variable rate financing agreement with ING Bank N.V., London branch on June 20, 2011 for a seven year facility to finance the acquisition of a Capesize vessel and a Supramax Bulk Carrier Newbuilding, both of which we acquired a 100% interest in as a result of our acquisition of Dry Bulk. Pursuant to the terms of the facility, the lender agreed to provide a secured term loan facility divided into two tranches: Tranche A, fully drawn on June 20, 2011 in the amount of $24.1 million, and Tranche B, providing up to $23.3 million of additional credit. Under Tranche B, we drew $6.1 million in November 2011 and $12.7 million in January 2012.

We have an interest rate swap agreement in place to fix the interest rate on our variable rate note payable expiring in 2020 at 2.065%. After applicable margin adjustments, the effective interest rate on this note payable is fixed at 5.565%. The swap agreement is for the same term as the associated note payable.

As described in greater detail above, our senior secured Credit Facility matures on September 24, 2018 and includes a term loan facility in the principal amount of $45 million and a LOC in the principal amount up to $50 million. The LOC facility includes a $20 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans.

All of our principal credit agreements and operating leases require us to comply with various loan covenants, including financial covenants that require minimum levels of net worth, working capital, liquidity, and interest expense or fixed charges coverage and a maximum amount of debt leverage. During first quarter of 2014, there was concern that we would be unable to meet all of our required debt covenants for the quarter. As of March 31, 2014, our principal senior secured lenders and two of our lessors agreed to, among other things, defer the date upon which we are required to attain a more stringent leverage ratio and increased liquidity from December 31, 2013 to June 30, 2014. Under these terms, we are required to maintain a consolidated leverage ratio of 4.50 to 1.0 through the fiscal quarter ending June 30, 2014, and 4.25 to 1.0 thereafter, and liquidity of not less than $15 million through June 30, 2014 and $20 million thereafter. As of June 30, 2014, we were in compliance with all of our debt covenants.

Based on our expectations for improved performance over the next twelve months, we currently believe that we will be able to attain all of our financial covenants through the end of 2014.

In addition to the restrictions under our new Credit Facility, certain of our loan agreements restrict the ability of our subsidiaries to dispose of collateralized assets or any other asset which is substantial in relation to our assets taken as a whole without the approval from the lender. We believe that we have consistently remained in compliance with this provision of these loan agreements.