NOTE 7 – BANK CREDIT AGREEMENTS AND OTHER SHORT-TERM AND LONG-TERM DEBT

On October 26, 2016, the Company and Diodes International B.V. (the “Foreign Borrower” and, collectively with the Company, the “Borrowers”), and certain subsidiaries of the Company as guarantors, entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, as Administrative Agent, Swing Line Lender and L/C Issuer, and the Lenders named therein, that amends and restates that certain Credit Agreement dated as of January 8, 2013, as previously amended (the “Prior Credit Agreement”). Certain capitalized terms used in this description of the Credit Agreement have the meanings given to them in the Credit Agreement.

The Credit Agreement rebalances the Company’s senior credit facilities under the Prior Credit Agreement from a $400,000,000 revolving senior credit facility and a $100,000,000 term loan to a $250,000,000 revolving senior credit facility (the “Revolver”), which includes a $10,000,000 swing line sublimit, a $10,000,000 letter of credit sublimit, and a $20,000,000 alternative currency sublimit, and a $250,000,000 term loan (the “Term Loan”). The Borrowers may from time to time request increases in the aggregate commitments under the Credit Agreement of up to a total of increases of $200,000,000, subject to the Lenders electing to increase their commitments or by means of the addition of new Lenders, and subject to at least half of each increase in aggregate commitments being in the form of term loans, with the remaining amount of each increase being an increase in the amount of the Revolver.

The Revolver and the Term Loan mature on October 26, 2021 (the “Maturity Date”). The Company used the proceeds of the Term Loan and a portion of the proceeds available under the Revolver to refinance certain existing indebtedness of the Borrowers and their subsidiaries under the Prior Credit Agreement and has used and plans to use proceeds available under the Revolver for working capital, capital expenditures, and other lawful corporate purposes, including, without limitation, financing permitted acquisitions.

The Credit Agreement contains certain financial and non-financial covenants, including, but not limited to, a maximum Consolidated Leverage Ratio, a minimum Consolidated Fixed Charge Coverage Ratio, and restrictions on liens, indebtedness, investments, fundamental changes, dispositions, and restricted payments (including dividends and share repurchases). These covenants are generally similar to the corresponding covenants in the Prior Credit Agreement, except that certain amounts permitted as exceptions to negative covenants restricting liens, indebtedness, investments, dispositions and restricted payments have been increased, and the maximum Consolidated Leverage Ratio set forth in the Credit Agreement has been increased. Under the Credit Agreement, restricted payments, including dividends and share repurchases, are permitted in certain circumstances, including while the Consolidated Leverage Ratio is at least 0.25 to 1.00 less than the maximum permitted under the Credit Agreement.

On February 13, 2017, the Company, the Foreign Borrower and certain subsidiaries of the Company as guarantors, entered into an Amendment No. 1 to Amended and Restated Credit Agreement and Limited Waiver (the “Amendment”) with Bank of America, N.A., as Administrative Agent, and the Lenders named therein, that among other things, does the following: (a) expands the definition of cash equivalents to include certain cash equivalent investments made by foreign subsidiaries of the Company and held in foreign jurisdictions, and modifies the requirements for cash equivalent investments in money market investment programs, all as is more fully described in the Amendment; and (b) waives any Events of Default that have occurred prior to the date of the Amendment as a result of investments made by foreign subsidiaries of the Company in foreign financial products that were not permitted investments prior to giving effect to the Amendment, as is more fully described in the Amendment.

We maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $66.5 million. In some cases, our foreign credit lines are unsecured, uncommitted and may be repayable on demand. As of December 31, 2016, in addition to the Credit Agreement, our Asia subsidiaries had unused and available credit lines of up to an aggregate of approximately $66.0 million, with several financial institutions. In some cases, our foreign credit lines are unsecured, uncommitted and may be repayable on demand, except for two Taiwanese credit facilities that are collateralized by assets. Our foreign credit lines bear interest at LIBOR or similar indices plus a specified margin. At December 31, 2016, there were no amounts outstanding on these credit lines.

The unused and available credit under the various facilities as of December 31, 2016, was approximately $66.0 million (net of approximately $0.5 million credit used for import and export guarantee), as follows:

2016

Outstanding at December 31,

Lines of Credit

Terms

2016

2015

66,455

Unsecured, interest at LIBOR plus margin, due

quarterly

Long-term debt – The balances as of December 31, consist of the following:

	2016			2015
Notes payable to Taiwan bank, original principal amount of TWD 132 million, variable interest (approximately 1.9% as of December 31, 2015), matures July 6, 2021.		1,466			1,723
Term loan and revolver		428,375			464,500
Total long-term debt		429,841			466,223
Less: Current portion		(14,356	)		(10,282	)
Less: Unamortized debt issuance costs		(2,359	)		(2,203	)
Long-term debt, net of current portion	$	413,126		$	453,738

The table below sets forth the annual contractual maturities of long-term debt at December 31, 2016:

2017	$	14,356
2018		20,611
2019		26,866
2020		33,122
2021		334,886
Total long-term debt	$	429,841