4. Debt

Our debt consists of the following (amounts in thousands):



	September 30, 2016			December 31, 2015
Senior secured revolving credit facility	$	106,500		$	95,000
Senior notes	300,000			300,000
	406,500			395,000
Less unamortized debt issuance costs	(6,992		)	(7,783		)
	$	399,508		$	387,217

Senior Secured Revolving Credit Facility

We have a credit agreement, as most recently amended on June 30, 2016, with Wells Fargo Bank, N.A. and a syndicate of lenders which provides for a senior secured revolving credit facility, with sub-limits for letters of credit and swing-line loans, of up to an aggregate commitment amount of $175 million, with further reductions to $150 million not later than December 31, 2017, subject to availability under a borrowing base comprised of certain eligible cash, certain eligible receivables, certain eligible inventory, and certain eligible equipment of ours and certain of our subsidiaries, all of which matures in March 2019 (the “Revolving Credit Facility”). The Revolving Credit Facility contains customary mandatory prepayments from the proceeds of certain asset dispositions or equity or debt issuances, which are applied to reduce outstanding revolving and swing-line loans and to cash-collateralize letter of credit exposure, and in certain cases, also reduce the commitment amount available.

Borrowings under the Revolving Credit Facility bear interest, at our option, at the LIBOR rate or at the bank prime rate, plus an applicable per annum margin of 5.50% and 4.50%, respectively. The Revolving Credit Facility requires a commitment fee due quarterly based on the average daily unused amount of the commitments of the lenders, a fronting fee due for each letter of credit issued, and a quarterly letter of credit fee due based on the average undrawn amount of letters of credit outstanding during such period. Additionally, the Revolving Credit Facility requires that if on the last business day of each week, our aggregate amount of cash (as calculated pursuant to the Revolving Credit Facility) exceeds $20 million, we pay down the outstanding principal balance by the amount of such excess.

Our obligations under the Revolving Credit Facility are secured by substantially all of our domestic assets (including equity interests in Pioneer Global Holdings, Inc. and 65% of the outstanding voting equity interests, and 100% of non-voting equity interests, of any first-tier foreign subsidiaries owned by Pioneer Global Holdings, Inc., but excluding any equity interest in, and any assets of, Pioneer Services Holdings, LLC) and are guaranteed by certain of our domestic subsidiaries, including Pioneer Global Holdings, Inc. Borrowings under the Revolving Credit Facility are available for acquisitions, working capital and other general corporate purposes.

As of October 15, 2016, we had $111.5 million outstanding under our Revolving Credit Facility and $17.3 million in committed letters of credit, which resulted in borrowing availability of $46.2 million under our Revolving Credit Facility. There are no limitations on our ability to access the borrowing capacity provided there is no default, all representations and warranties are true and correct, and compliance with financial covenants under the Revolving Credit Facility is maintained. At September 30, 2016, we were in compliance with our financial covenants under the Revolving Credit Facility.

The financial covenants contained in our Revolving Credit Facility include the following:


•	A maximum senior consolidated leverage ratio, calculated as senior consolidated debt at the period end, which excludes unsecured and subordinated debt, divided by EBITDA for the trailing twelve month period at each quarter end, as defined in the Revolving Credit Facility. The senior consolidated leverage ratio cannot exceed the maximum amounts as follows:



w	4.50	to 1.00	on	September 30, 2016
w	5.00	to 1.00	on	September 30, 2017
w	4.00	to 1.00	on	December 31, 2017
w	3.50	to 1.00	on	March 31, 2018
w	3.25	to 1.00	on	June 30, 2018
w	2.50	to 1.00	at any time after June 30, 2018


•	A minimum interest coverage ratio, calculated as EBITDA for the trailing twelve month period at each quarter end, as defined in the Revolving Credit Facility, divided by interest expense for the same period. The interest coverage ratio cannot be less than the minimum amounts as follows:



w	1.15	to 1.00	for the quarterly period ending	September 30, 2016
w	1.00	to 1.00	for the quarterly period ending	September 30, 2017
w	1.25	to 1.00	for the quarterly period ending	December 31, 2017
w	1.50	to 1.00	at any time after December 31, 2017


•	A minimum EBITDA requirement, for the periods indicated, as defined in the Revolving Credit Facility. EBITDA required at the end of forthcoming fiscal quarters cannot be less than the minimum amounts as follows:



w	$4 million	for the two-fiscal quarter period ending December 31, 2016
w	$7 million	for the three-fiscal quarter period ending March 31, 2017
w	$12 million		for the four-fiscal quarter period ending June 30, 2017

The Revolving Credit Facility restricts capital expenditures to the following amounts during each forthcoming fiscal year as follows:



w	$35 million	in fiscal year 2016
w	$35 million	in fiscal year 2017
w	$50 million	in fiscal year 2018
w	$50 million	in fiscal year 2019

The capital expenditure threshold for each of the fiscal years above may be increased by up to 50% of the unused portion of the capital expenditure threshold for the immediate preceding fiscal year, limited to a maximum of $5 million in 2017, and $7.5 million in each of the years 2018 and 2019. In addition to the above requirements, additional capital expenditures may be made if the following conditions are satisfied:


•	the aggregate outstanding commitments under the Revolving Credit Facility do not exceed $150 million;


•	the pro forma senior leverage and total leverage ratios, calculated as defined in the Revolving Credit Facility, are less than 2.00 to 1.00 and 4.50 to 1.00, respectively.

The Revolving Credit Facility has additional restrictive covenants that, among other things, limit our ability to:


•	incur additional debt or make prepayments of existing debt;


•	create liens on or dispose of our assets;


•	pay dividends on stock or repurchase stock;


•	enter into acquisitions, mergers, consolidations, sale leaseback transactions, or hedging contracts;


•	make other restricted investments; and


•	conduct transactions with affiliates.

In addition, the Revolving Credit Facility contains customary events of default, including without limitation:

•payment defaults;

•breaches of representations and warranties;

•covenant defaults;

•cross-defaults to certain other material indebtedness in excess of specified amounts;

•certain events of bankruptcy and insolvency;

•judgment defaults in excess of specified amounts;

•failure of any guaranty or security document supporting the credit agreement; and

•change of control.

Senior Notes

In 2014, we issued $300 million of unregistered senior notes with a coupon interest rate of 6.125% that are due in 2022 (the “Senior Notes”). The Senior Notes were sold at 100% of their face value. After deductions were made for the $6.1 million for underwriters’ fees and other debt offering costs, we received $293.9 million of net proceeds. In order to reduce our overall interest expense and lengthen the overall maturity of our senior indebtedness, during 2014, we redeemed all of our then outstanding $425 million of unregistered senior notes with a coupon interest rate of 9.875% that were issued in 2010 and 2011 and were set to mature in 2018, funded primarily by proceeds from the issuance of Senior Notes in 2014 and additional borrowings under our Revolving Credit Facility, as well as some cash on hand.

The Senior Notes will mature on March 15, 2022 with interest due semi-annually in arrears on March 15 and September 15 of each year. We have the option to redeem the Senior Notes, in whole or in part, at any time on or after March 15, 2017 in each case at the redemption price specified in the Indenture dated March 18, 2014 (the “Indenture”) plus any accrued and unpaid interest and any additional interest (as defined in the Indenture) thereon to the date of redemption. Prior to March 15, 2017, we may also redeem the Senior Notes, in whole or in part, at a “make-whole” redemption price specified in the Indenture, plus any accrued and unpaid interest and any additional interest thereon to the date of redemption. In addition, prior to March 15, 2017, we may, on one or more occasions, redeem up to 35% of the aggregate principal amount of the Senior Notes at a redemption price equal to 106.125% of the principal amount thereof, plus accrued and unpaid interest and additional interest, if any, to the redemption date, with the net cash proceeds of certain equity offerings, provided that at least 65% of the aggregate principal amount of the Senior Notes remains outstanding after the occurrence of such redemption and that the redemption occurs within 120 days of the date of the closing of such equity offering.

In accordance with a registration rights agreement with the holders of our Senior Notes, we filed an exchange offer registration statement on Form S-4 with the Securities and Exchange Commission that became effective on October 2, 2014. The exchange offer registration statement enabled the holders of our Senior Notes to exchange their senior notes for publicly registered notes with substantially identical terms. References to the “Senior Notes” herein include the senior notes issued in the exchange offer.

If we experience a change of control (as defined in the Indenture), we will be required to make an offer to each holder of the Senior Notes to repurchase all or any part of the Senior Notes at a purchase price equal to 101% of the principal amount of each Senior Note, plus accrued and unpaid interest, if any, to the date of repurchase. If we engage in certain asset sales, within 365 days of such sale we will be required to use the net cash proceeds from such sale, to the extent we do not reinvest those proceeds in our business, to make an offer to repurchase the Senior Notes at a price equal to 100% of the principal amount of each Senior Note, plus accrued and unpaid interest to the repurchase date.

The Indenture, among other things, limits us and certain of our subsidiaries in our ability to:


•	pay dividends on stock, repurchase stock, redeem subordinated indebtedness or make other restricted payments and investments;


•	incur, assume or guarantee additional indebtedness or issue preferred or disqualified stock;


•	create liens on our or their assets;


•	enter into sale and leaseback transactions;


•	sell or transfer assets;


•	pay dividends, engage in loans, or transfer other assets from certain of our subsidiaries;


•	consolidate with or merge with or into, or sell all or substantially all of our properties to any other person;


•	enter into transactions with affiliates; and


•	enter into new lines of business.

The Senior Notes are not subject to any sinking fund requirements. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by certain of our existing domestic subsidiaries and by certain of our future domestic subsidiaries. (See Note 10, Guarantor/Non-Guarantor Condensed Consolidated Financial Statements.)

Debt Issuance Costs

Costs incurred in connection with the Revolving Credit Facility were capitalized and are being amortized using the straight-line method over the term of the Revolving Credit Facility which matures in March 2019. Costs incurred in connection with the issuance of our Senior Notes were capitalized and are being amortized using the straight-line method (which approximates amortization using the interest method) over the term of the Senior Notes which mature in March 2022. We recognized $1.3 million and $1.2 million of associated amortization during the nine months ended September 30, 2016 and 2015, respectively. Additionally, during the nine months ended September 30, 2016 and 2015, we recognized $0.3 million and $0.5 million, respectively, of loss on extinguishment of debt for the write off of unamortized debt issuance costs associated with the reduction of borrowing capacity under our Revolving Credit Facility.