(3)BANK DEBT

Liquidity

Our bank debt at March 31, 2018, was $191 million (term-$55 million, revolver-$136 million). We can borrow up to $200 million on the revolver. As of March 31, 2018, we had additional borrowing capacity of $64 million and total liquidity of $82 million.

Fees

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

Covenants

The credit facility includes a Maximum Leverage Ratio (Sunrise total funded debt/ trailing 12 months adjusted EBITDA) as listed below:



Fiscal Periods Ending		Ratio
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 credit facility also requires a Debt Service Coverage Ratio minimum of 1.25X through the maturity of the credit facility, defined as Sunrise’s trailing 12 months adjusted EBITDA/annual debt service.

At March 31, 2018, our Leverage Ratio was 2.37, and our Debt Service Coverage Ratio was 1.69. Therefore, we were in compliance with those two ratios.

Rate

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 notional value steps down 10% each quarter which commenced on March 31, 2016.

At March 31, 2018, we were paying LIBOR of 1.89% plus 3.00% for a total interest rate of 4.89%.

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


		March 31,			December 31,
		2018			2017
Current debt	$	35,000		$	35,000
Less debt issuance cost		(1,829	)		(1,829	)
Net current portion	$	33,171		$	33,171

Long-term debt	$	155,737		$	166,992
Less debt issuance cost		(762	)		(1,219	)
Net long-term portion	$	154,975		$	165,773