(3)

BANK DEBT

On September 30, 2019, we executed an amendment to our credit agreement with PNC, administrative agent for our lenders. The primary purposes of the amendment were to extend the maturity by 16 months to September 2023 and to modify pricing to reduce the interest rate by 50 basis points over the remainder of the term.

Our bank debt is comprised of term debt ($110 million as of September 30, 2019) and a $120 million revolver ($62 million borrowed as of September 30, 2019). The term debt amortization concludes with a final payment in March 2023. The revolver matures September 2023. Our debt is recorded at cost which approximates fair value due to the variable interest rates in the agreement and is collateralized primarily by our assets.

Liquidity

Our bank debt at September 30, 2019, was $172 million. As of September 30, 2019, we had additional borrowing capacity of $58 million and total liquidity of $67 million.

Fees

Unamortized bank fees and other costs incurred in connection with the initial facility and subsequent amendments totaled $7.2 million as of our most recent amendment in September 2019. These costs were deferred and are being amortized over the term of the loan. Unamortized costs as of September 30, 2019 and December 31, 2018 were $7.0 million and $7.4 million, respectively. Amortization of deferred financing costs for the nine months ended September 30, 2019 and 2018 was $1,628 and $1,482, respectively. Such amounts were $543 and $542 for the three months ended September 30, 2019 and 2018, respectively.

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


	September 30,		December 31,
	2019		2018
Current bank debt	$	33,075	$	27,563
Less unamortized debt issuance cost		(1,742)		(2,171)
Net current portion	$	31,333	$	25,392

Long-term bank debt	$	138,925	$	160,900
Less unamortized debt issuance cost		(5,228)		(5,245)
Net long-term portion	$	133,697	$	155,655

Total bank debt	$	172,000	$	188,463
Less total unamortized debt issuance cost		(6,970)		(7,416)
Net bank debt	$	165,030	$	181,047

Covenants

The credit facility includes a Maximum Leverage Ratio (consolidated funded debt / trailing twelve months adjusted EBITDA), calculated as of the end of each fiscal quarter for the trailing twelve months, not to exceed the amounts below:


Fiscal Periods Ending		Ratio
September 30, 2019		3.25 to 1.00
December 31, 2019 through September 30, 2020		3.00 to 1.00
December 31, 2020 through September 30, 2021		2.75 to 1.00
December 31, 2021 and each fiscal quarter thereafter		2.50 to 1.00

As of September 30, 2019, our Leverage Ratio of 2.43 was in compliance with the requirements of the credit agreement.

The credit facility also requires a Minimum Debt Service Coverage Ratio (consolidated adjusted EBITDA / annual debt service) calculated as of the end of each fiscal quarter for the trailing twelve months of 1.25 to 1 through the maturity of the credit facility.

As of September 30, 2019, our Debt Service Coverage Ratio of 1.96 was in compliance with the requirements of the credit agreement.

Rate

The interest rate on the facility ranges from LIBOR plus 2.25% to LIBOR plus 4.00%, depending on our Leverage Ratio. We entered into swap agreements to fix the LIBOR component of the interest rate at 2.92% on the declining term loan balance and on $53 million of the revolver. At September 30, 2019, we are paying LIBOR at the swap rate of 2.92% plus 3.00% for a total interest rate of 5.92%. Prior to the amendment on September 30, 2019, we were paying LIBOR at the swap rate of 2.92% plus 3.5% for a total interest rate of 6.42%.