(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 September 30, 2016 was $238 million (term-$110, revolver-$128). 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 those listed below:


Fiscal Periods Ended/Ending		Ratio
September 30, 2016 through March 31, 2017		4.50X
June 30, 2017 through March 31, 2018		4.25X
June 30, 2018 and September 30, 2018		4.00X
December 31, 2018		3.75X
March 31, 2019 and June 30, 2019		3.50X

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 September 30, 2016, we had additional borrowing capacity of $72 million.

At September 30, 2016, our maximum leverage ratio was 3.02X and our debt service coverage ratio was 2.06X. Therefore, we were in compliance with those two ratios.

The interest rate on the facility ranges from LIBOR plus 2.25% to LIBOR plus 4%, depending on our maximum leverage ratio. At September 30, 2016, we were paying LIBOR at .53% plus 3.50% for a total interest rate of 4.03%.

New accounting rules for 2016 require that our debt issuance 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 September 30, and December 31, are presented below (in thousands):



		2016			2015
Current debt	$	28,438		$	26,250
Less debt issuance cost		(1,829	)		(1,394	)
Net current portion	$	26,609		$	24,856

Long-term debt	$	209,542		$	223,220
Less debt issuance cost		(3,505	)		(3,718	)
Net long-term portion	$	206,037		$	219,502