Note E — Long-Term Debt

On August 8, 2013, we entered into a three-year $80 million revolving credit facility, which includes a $25 million letter of credit sub-facility and a $5 million swing line loan sub-facility (the “2013 Revolving Credit Facility”) with Bank of America, N.A. (as Administrative Agent, Swing Line Lender and L/C Issuer) and the other lenders party thereto. The 2013 Revolving Credit Facility permits us to request up to a $15 million increase in the total amount of the facility. The 2013 Revolving Credit Facility matures on August 16, 2016. We may elect to prepay the 2013 Revolving Credit Facility at any time without incurring any prepayment penalties.

The 2013 Revolving Credit Facility amends and restates our August 12, 2010 credit facility (the “2010 Revolving Credit Facility”), with the lenders party thereto and the Agent, and replaces its three-year $70 million revolving credit facility, under which Harte-Hanks had no borrowings as of August 8, 2013 (except for letters of credit totaling approximately $9.5 million). The 2013 Revolving Loan Facility will not replace, and is in addition to, the $122.5 million term loan facility, which Harte-Hanks entered into on August 16, 2011 (under which approximately $101.1 million remains outstanding).

For each borrowing under the 2013 Revolving Credit Facility, we can generally choose to have the interest rate for that borrowing calculated on either (i) the Eurodollar rate for the applicable interest period plus a spread which is determined based on our total net debt-to-EBITDA ratio then in effect, which ranges from 2.25% to 3.00% per annum; or (ii) the highest of (a) the Agent’s prime rate, (b) the Federal Funds Rate plus 0.50% per annum or (c) Eurodollar rate plus 1.00% per annum, plus a spread which is determined based on our total debt-to-EBITDA ratio then in effect, which spread ranges from 1.25% to 2% per annum.

We also pay a quarterly commitment fee under the 2013 Revolving Credit Facility, which is based on a rate applied to the difference between total commitment amount under the 2013 Revolving Credit Facility and the aggregate amount of outstanding obligations under such facility. The commitment fee rate ranges from 0.50% to 0.55% per annum, depending on our total net debt-to-EBITDA ratio then in effect.

In addition, we pay a letter of credit fee with respect to outstanding letters of credit. That fee is calculated by applying a rate equal to the spread applicable to Eurodollar based loans plus a fronting fee of 0.125% per annum to the average daily undrawn amount of the outstanding letters of credit.

At September 30, 2013 we had letters of credit totaling $9.5 million issued under the 2013 Revolving Credit Facility, decreasing the amount available for borrowing to $70.5 million. At December 31, 2012 we had letters of credit totaling $9.5 million issued under the 2010 Revolving Credit Facility, decreasing the amount available for borrowing to $60.5 million.

Our long-term debt obligations were as follows:

	September 30,		December 31,
In thousands	2013		2012
2010 Revolving Credit Facility, various interest rates based on LIBOR, due August 12, 2013 ($60.5 million capacity at June 30, 2013)	$	0	$	0
2013 Revolving Credit Facility, various interest rates based on Eurodollar rate, due August 16, 2016 ($70.5 million capacity at September 30, 2013)	0		0
2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.18% at September 30, 2013), due August 16, 2016	101,062		110,250
Total debt	$	101,062	$	110,250
Less current maturities	13,781		12,250
Total long-term debt	$	87,281	$	98,000

The carrying values and estimated fair values of our outstanding debt were as follows:

September 30,

December 31,

2013

2012

Carrying

Fair

Carrying

Fair

In thousands

Value

Total debt

101,062

110,250

The estimated fair values were calculated using current rates provided to us by our lenders for debt of the same remaining maturity and characteristics. These current rates are considered Level 2 inputs under the fair value hierarchy established by ASC 820.