(5)BANK DEBT

On April 15, we executed an amendment to our credit agreement with PNC, administrative agent for our lenders. The primary purpose of the amendment was to modify the allowable leverage ratio over the term of the loan to increase available liquidity. As a result of the amendment, our maximum annual capital expenditures are limited to $30 million for 2020, and our dividend is suspended until our leverage ratio falls below 2.0X.

Our bank debt at March 31, 2020 was $168 million. Bank debt is comprised of term debt ($96 million as of March 31, 2020) and a $120 million revolver ($72 million borrowed as of March 31, 2020). 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

As of March 31, 2020, under the new leverage ratio, we had additional borrowing capacity of $47.5 million and total liquidity of $55.4 million. Liquidity consists of our additional borrowing capacity and cash and cash equivalents. Prior to the amendment, our additional borrowing capacity was $4.2 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 amendment in September 2019. These costs were deferred and are being amortized over the term of the loan. Unamortized costs as of March 31, 2020, and December 31, 2019, were $6.0 million and $6.5 million, respectively. Additional costs incurred with the April 15 amendment total approximately $1.9 million.

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


	March 31,		December 31,
	2020		2019
Current bank debt	$	36,750	$	34,912
Less unamortized debt issuance cost		(1,868)		(1,868)
Net current portion	$	34,882	$	33,044

Long-term bank debt	$	131,300	$	145,238
Less unamortized debt issuance cost		(4,177)		(4,644)
Net long-term portion	$	127,123	$	140,594

Total bank debt	$	168,050	$	180,150
Less total unamortized debt issuance cost		(6,045)		(6,512)
Net bank debt	$	162,005	$	173,638

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
March 31, 2020 and June 30, 2020		4.00 to 1.00
September 30, 2020 and December 31, 2020		3.50 to 1.00
March 31, 2021 and June 30, 2021		3.25 to 1.00
September 30, 2021 and December 31, 2021		3.00 to 1.00
March 31, 2022 and each fiscal quarter thereafter		2.50 to 1.00

As of March 31, 2020, our Leverage Ratio of 2.93 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 1.05 to 1.00 through December 31, 2021, at which time it increases to 1.25 to 1.00 through the maturity of the credit facility.

As of March 31, 2020, our Debt Service Coverage Ratio of 1.48 was in compliance with the requirements of the credit agreement.

Rate

The interest rate on the facility ranges from LIBOR plus 2.75% to LIBOR plus 4.00%, depending on our Leverage Ratio, with a LIBOR floor of 0.50%. 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 March 31, 2020, we are paying LIBOR at the swap rate of 2.92% plus 3.50% for a total interest rate of 6.42%. As a condition of the amendment, effective April 15, 2020, we are paying LIBOR at the swap rate of 2.92% plus 4.00% for a total interest rate of 6.92% until such time we submit our quarterly compliance certificate. At such time, our rate will drop back to LIBOR at the swap rate of 2.92% plus 3.50% for a total interest rate of 6.42%.