Long-Term Debt

Long-term debt consisted of the following:



	As of December 31,
(in thousands)	2014		2013

Variable rate credit facility	$	—	$	—
Term loan	198,000		200,000
Long-term debt	198,000		200,000
Current portion of long-term debt	2,000		2,000
Long-term debt (less current portion)	$	196,000	$	198,000
Fair value of long-term debt *	$	194,000	$	200,000

* Fair value of the term loan was estimated based on quoted private market transactions and is classified as Level 1 in the fair value hierarchy.

On November 26, 2013, we entered into a $275 million revolving credit and term loan agreement (“Financing Agreement”) to provide liquidity for ongoing operations. The Financing Agreement includes a $200 million term loan B maturing in November 2020 and a $75 million revolving credit facility maturing in November 2018.

The Financing Agreement includes the maintenance of a net leverage ratio if we borrow more than 20% on the revolving credit facility. The term loan B requires that if we borrow additional amounts or make a permitted acquisition that we cannot exceed a stated net leverage ratio on a pro forma basis at the date of the transaction.

Interest is payable on the term loan B at rates based on LIBOR, with a 0.75% LIBOR floor, plus a fixed margin of 2.50%. Interest is payable on the revolving credit facility at rates based on LIBOR plus a margin based on our leverage ratio ranging from 2.25% to 2.75%. As of December 31, 2014, the interest rate was 3.25% on the term loan B. The Financing Agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt. As of December 31, 2014, we were not required to make additional principal payments based on excess cash flow. The weighted-average interest rate on borrowings was 3.25% and 3.66% during December 31, 2014 and 2013, respectively.

Scheduled principal payments on long-term debt at December 31, 2014 are: $2.0 million in 2015, $2.0 million in 2016 $2.0 million in 2017, $2.0 million in 2018, $2.0 million in 2019 and $188.0 million thereafter.

Under the terms of the Financing Agreement, we granted the lenders mortgages on certain of our real property, pledges of our equity interests in our subsidiaries and security interests in substantially all other personal property, including cash, accounts receivables, inventories and equipment.

The Financing Agreement allows us to make restricted payments (dividends and stock repurchases) up to $50 million plus additional amounts based on our financial results and condition. We can make additional stock repurchases equal to the amount of proceeds that we receive from the exercise of stock options held by our employees. We can also make acquisitions as long as the pro forma net leverage ratio is less than 4.5 to 1.0.

Commitment fees of 0.30% to 0.50% per annum, based on our leverage ratio, of the total unused commitment are payable under the revolving credit facility.

As of December 31, 2014 and 2013, we had outstanding letters of credit totaling $0.2 million.