(2)Bank Debt

On March 18, 2016, we executed an amendment to our credit agreement with PNC, as administrative agent for our lenders. The primary purpose of the amendment was to increase liquidity and maintain compliance through the maturity of the agreement in August 2019. The revolver was reduced from $250 million to $200 million and the term loan remains the same. Our debt at March 2016 was $256 million (term-$131, revolver-$125). In addition, a maximum annual capex of $30 million was included.

Bank fees and other costs incurred in connection with the initial facility and the amendment were $9.1 million, which were deferred and are being amortized over five years. The credit facility is collateralized by substantially all of Sunrise’s assets and we are the guarantor.

The amended credit facility increased the maximum leverage ratio (total funded debt/ trailing 12 months EBITDA) from 2.75X to 4X at March 31, 2016. The maximum leverage ratio is calculated at the end of each fiscal quarter and shall not exceed the applicable ratios below.


Fiscal Periods Ending	Ratio
March 31, 2016	4X
June 30, 2016	4.25X
September 30, 2016 through March 31, 2017	4.5X
June 30, 2017 through March 31, 2018	4.25X
June 30, 2018 and September 30, 2018	4X
December 31, 2018	3.75X
March 31, 2019 and June 30, 2019	3.5X

The fixed charge coverage ratio was changed to the debt service coverage ratio and requires a minimum of 1.25X through the maturity of the credit facility. The amendment defines the debt service coverage as trailing 12 months EBITDA/annual debt service. As of March 31, 2016, we have additional borrowing capacity of $67 million.

At March 31, 2016, our maximum leverage ratio was 2.89X and our debt service coverage ratio was 2.40X. Therefore, we were in compliance with these two ratios.

The interest rate on the facility ranges from LIBOR plus 2.25% to LIBOR plus 4%, depending on our maximum leverage ratio.

New accounting rules for 2016 require that our debt issues costs be presented as a direct reduction from the related debt rather than as an asset. Our December 31, 2015 balance sheet was changed to reflect the new rule.

Debt less debt issuance cost at March 31 and December 31 are presented below (in thousands):


		2016			2015
Current debt	$	26,250		$	26,250
Less debt issuance cost		(1,992	)		(1,394	)
Net current portion	$	24,258		$	24,856

Long-term debt	$	229,854		$	223,220
Less debt issuance cost		(4,256	)		(3,718	)
Net long-term portion	$	225,598		$	219,502