In anticipation of the acquisition of the business of GenePOC (see Note 3), on May 24, 2019 we entered into a credit facility agreement with a commercial bank, which we amended on February 19, 2020 in anticipation of the Exalenz acquisition (see Note 3). The credit facility expires

May 2024

and as amended makes available to the Company a revolving credit facility in an aggregate principal amount not to

exceed

160,000

(originally $

125,000

)

, with

outstanding principal amounts bearing interest at a fluctuating rate tied to, at the Company’s option, either the federal funds rate or LIBOR, resulting in an effective interest rate of 2.63% and 3.45% on the credit facility during the three and nine months ended June 30, 2020, respectively. Since entering into the credit facility through June 30, 2020, three draws totaling $125,824 have been made on the credit facility, with a January 2020 principal repayment resulting in an outstanding principal balance of $98,824 at June 30, 2020. The proceeds from these draws were used to: (i) repay and settle the outstanding principal and interest due on our previously existing $60,000 five-year term loan; and (ii) along with cash

on-hand,

fund the Exalenz and GenePOC acquisitions. In light of the interest being determined on a variable rate basis, the fair value of the borrowings under the credit facility at June 30, 2020 approximates the current carrying value reflected in the accompanying Condensed Consolidated Balance Sheet.

The revolving credit facility is collateralized by the business assets of the Company’s U.S. subsidiaries and requires compliance with financial covenants that limit the amount of debt obligations and require a minimum level of coverage

of fixed charges, as defined in the credit facility agreement. As of June 30, 2020, the Company is in compliance with all covenants.

In order to limit exposure to volatility in the LIBOR interest rate, during March 2020 and June 2020 the Company and the commercial bank entered into three interest rate swap agreements that effectively converted the variable interest rate

50,000

of the outstanding principal to a fixed rate

2.16

(at the current credit spread) beginning June 24, 2020, the effective date of the most recent swap agreement. With an initial notional balance

50,000

the interest rate swap agreements were established with critical terms identical to borrowings under the credit facility, including:

(i) one-month

LIBOR settlement rates, as to be elected by the Company throughout the remaining term of the credit facility; (ii) rate reset dates; and (iii) term/maturity. Consequently, the interest rate swaps have been designated as effective cash flow hedges, with changes in fair values reflected as a separate component of other comprehensive income in the accompanying Condensed Consolidated Statements of Comprehensive Income. At June 30, 2020, the fair value of the interest rate swaps was reported as a liability

of $

703

which is reflected as a

non-current

liability in the accompanying Condensed Consolidated Balance Sheet. This fair value was determined by information provided by the counterparty and is considered a Level 2 input within the fair value hierarchy of valuation techniques.

In connection with the Company’s term loan repayment in May 2019, the Company also settled the interest rate swap that had been entered into to limit exposure to volatility in the term loan’s LIBOR interest rate. At the time of settlement, the Company received a cash payment in an amount equal to

the

$563

then-current fair value of the interest rate swap. Accordingly, there is no balance for this interest rate swap reflected within assets or liabilities within the accompanying Consolidated Balance Sheets as of June 30, 2020 or September 30, 2019. The fair value of the swap that had been reflected within a separate component of other comprehensive income in the accompanying Consolidated Statements of Comprehensive Income, as a result of the interest rate swap having been designated as an effective cash flow hedge, is being released ratably into income through March 31, 2021, the interest rate swap’s original term.

The balance reflected within accumulated other comprehensive income related to the interest rate swap agreements associated with both the current credit facility and the former term loan totaled $473 and $461 at June 30, 2020 and September 30, 2019, respectively.