(2)Bank Debt

On March 18, 2016, we executed an amendment to our credit agreement with PNC, as administrative agent for our lenders, for the primary purpose of increasing liquidity and maintaining 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 31, 2017, was $232 million (term-$95 million, revolver-$137 million).

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 (Sunrise total funded debt/ trailing 12 months adjusted EBITDA) to those listed below:


Fiscal Periods Ended/Ending		Ratio
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 amended credit facility also requires a debt service coverage ratio minimum of 1.25X through the maturity of the credit facility. The amendment defines the debt service coverage as Sunrise trailing 12 months adjusted EBITDA/annual debt service. As of March 31, 2017, we had additional borrowing capacity of $63 million and total liquidity of $84 million.

At March 31, 2017, our maximum leverage ratio was 2.83, and our debt service coverage ratio was 2.15. 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 leverage ratio. We entered into swap agreements to fix the LIBOR component of the interest rate to achieve an effective fixed rate of ~5% on the original term loan balance and on $100 million of the revolver. The revolver swap step down 10% each quarter commencing March 31, 2016.

At March 31, 2017, we were paying LIBOR at .79% plus 3.50% for a total interest rate of 4.29%.

Bank debt less debt issuance costs are presented below (in thousands):


		March 31,			December 31,
		2017			2016
Current debt	$	32,813		$	30,625
Less debt issuance costs		(1,829	)		(1,829	)
Net current portion	$	30,984		$	28,796

Long-term debt	$	199,242		$	207,992
Less debt issuance costs		(2,591	)		(3,048	)
Net long-term portion	$	196,651		$	204,944