NOTES PAYABLE TO BANKS

9 Months Ended

Sep. 30, 2015

NOTES PAYABLE TO BANKS

NOTES PAYABLE TO BANKS

10. NOTES PAYABLE TO BANKS

The Company has a $350 million revolving credit facility with Bank of America Securities, LLC, SunTrust Robinson Humphrey, Inc, and Regions Capital Markets as Joint Lead Arrangers and Joint Book Managers, and a syndicate of other lenders. The facility includes a full and unconditional guarantee by the Company's 100% owned domestic subsidiaries whose assets equal substantially all of the consolidated assets of RPC and its subsidiaries. The subsidiaries of the Company that are not guarantors are considered minor.

The facility has a general term of five years with a maturity date of January 17, 2019 and provides for an unsecured line of credit of up to $350 million, which includes a $50 million letter of credit subfacility, and a $35 million swingline subfacility.

The Company incurred loan origination fees and other debt related costs associated with the facility in the aggregate of approximately $3.0 million. These costs are being amortized to interest expense over the remaining term of the five year loan, and the net amount of $0.9 million at September 30, 2015 is classified as non-current other assets.

Revolving loans under the Revolving Credit Agreement bear interest at one of the following two rates, at the Company's election:

· The Base Rate, which is the highest of Bank of America’s "prime rate" for the day of the borrowing, a fluctuating rate per annum equal to the Federal Funds Rate plus 0.50%, and a rate per annum equal to the one (1) month LIBOR rate plus 1.00%; in each case plus a margin that ranges from 0.125% to 1.125% based on a quarterly debt covenant calculation; or

· With respect to any Eurodollar borrowings, Adjusted LIBOR (which equals LIBOR as increased to account for the maximum reserve percentages established by the U.S. Federal Reserve) plus a margin ranging from 1.125% to 2.125%, based upon a quarterly debt covenant calculation.

In addition, the Company pays an annual fee ranging from 0.225% to 0.325%, based on a quarterly debt covenant calculation, of the unused portion of the credit facility.

The facility contains customary terms and conditions, including certain financial covenants and restrictions on indebtedness, dividend payments, business combinations and other related items. Further, the facility contains financial covenants limiting the ratio of the Company's consolidated debt to EBITDA to no more than 2.5 to 1, and limiting the ratio of the Company's consolidated EBITDA to scheduled principal payments plus interest expense to no less than 2 to 1. The Company was in compliance with these covenants for the nine months ended September 30, 2015.

At September 30, 2015, the Company had outstanding borrowings of $19.5 million under the facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaling $29.3 million; therefore, a total of $301.2 million of the facility was available.

Interest incurred on the credit facility, interest capitalized related to facilities and equipment under construction, and the related weighted average interest rates were as follows for the periods indicated:

	Three months ended						Nine months ended
	September 30,						September 30,
	2015			2014			2015			2014
(in thousands except interest rate data)
Interest incurred	$	376		$	655		$	1,738		$	1,541
Capitalized interest	$	145		$	180		$	455		$	392
Weighted average interest rate		4.3	%		2.1	%		2.1	%		2.5	%

The weighted average interest rate for the third quarter of 2015 is higher in comparison to the prior year due to the fixed nature of certain loan issue costs and facility fees included in interest expense.