XML 37 R23.htm IDEA: XBRL DOCUMENT

Note 14 - Long-term Debt and Credit Arrangements

3 Months Ended

Mar. 31, 2020

14. Long-Term Debt and Credit Arrangements

(in thousands)		*March 31, 2020*		*December 31, 2019*		*March 31, 2019*
2.75% Convertible Notes	$	195,295	$	193,696	$	—
Credit Agreement - term loan		136,875		138,750		144,375
Credit Agreement - revolving credit facility		25,000		25,000		197,000
2019 Notes		—		—		40,000
Debt issuance costs and other		6,994		6,906		(804	)
Total debt		364,164		364,352		380,571
Less current maturities		8,253		8,244		47,281
Total long-term debt	$	355,911	$	356,108	$	333,290

The aggregate minimum principal maturities of long-term debt related to balances at March 31, 2020 excluding debt issuance costs, including current maturities and the $34.7 million unamortized debt discount related to the 2.75% Convertible Notes are as follows: $6.3 million during the remainder of 2020; $8.5 million in 2021; $8.5 million in 2022; $142.3 million in 2023; $231.1 million in 2024; and $7.9 million in 2025 and thereafter.

Credit Agreement

On March 26, 2020, we entered into Amendment No.3 to the Third Amended and Restated Credit Agreement, which among other things, (i) reduced the revolving credit facility from $350.0 million to $275.0 million; (ii) amended the definition of Applicable Rate; (iii) amended the definition of Consolidated EBITDA which is used in the Consolidated Leverage Ratio financial covenant calculation; and (iv) modified certain financial covenants to allow for investments in certain large projects during 2020.

On June 19, 2020 and November 12, 2020, we entered into Amendments No. 4 and No. 5, respectively, to the Third Amended and Restated Credit Agreement, which, among other things, provided additional timing for the Company to deliver annual and quarterly financial statements.

On February 19, 2021, we entered into the Limited Waiver and Amendment No. 6 to the Third Amended and Restated Credit Agreement which waives any defaults or events of defaults that may have arisen in connection with the Company’s restatement during the periods covered by the restatement, the failure to comply with a financial covenant and any right of the lenders to collect interest at the default rate with respect to the waived defaults and events of default.

We refer to Third Amended and Restated Credit Agreement dated May 31, 2018 and all subsequent amendments listed above as “Credit Agreement.”

The Credit Agreement consists of a term loan and a revolving credit facility.

The term loan requires that Granite repay 1.25% of the original $150.0 million principal balance each quarter until the maturity date, at which point the remaining balance is due. As of each March 31, 2020, December 31, 2019 and March 31, 2019, $7.5 million of the term loan balance was included in current maturities of long-term debt on the condensed consolidated balance sheets and the remaining $129.4 million, $131.3 million and $136.9 million, respectively, was included in long-term debt.

As of March 31, 2020 , the total unused availability under the Credit Agreement was $218.8 million resulting from $31.2 million in issued and outstanding letters of credit and $25.0 million drawn under the revolving credit facility. The letters of credit had expiration dates between June 2020 and December 2023.

Borrowings under the Credit Agreement bear interest at LIBOR, subject to a 75 basis point floor, or a base rate (at our option), plus an applicable margin based on the Consolidated Leverage Ratio (as defined in the Credit Agreement) calculated quarterly. LIBOR varies based on the applicable loan term, market conditions and other external factors. The applicable margin was 3.00% for loans bearing interest based on LIBOR and 2.00% for loans bearing interest at the base rate at March 31, 2020. Accordingly, the effective interest rate at March 31, 2020 using three-month LIBOR and the base rate was 4.45% and 5.25%, respectively, and we elected to use LIBOR for both the term loan and the revolving credit facility.

2.75% Convertible Notes

In November 2019, we issued an aggregate principal amount of $230.0 million of convertible senior notes (the “2.75% Convertible Notes”) at an interest rate of 2.75% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020 and maturing on November 1, 2024, unless earlier converted, redeemed or repurchased.

As of March 31, 2020 and December 31, 2019, the carrying amount of the liability component was $195.3 million and $193.7 million, respectively. As of March 31, 2020 and December 31, 2019, the unamortized debt discount was $34.7 million and $36.3 million, respectively.

On October 29, 2019, in connection with the offering of our 2.75% Convertible Notes, we entered into a purchased equity derivative instrument (“Hedge Option”) and sold warrants to reduce the cost of the Hedge Option. The Hedge Option and warrants were included in additional paid-in capital on the condensed consolidated balance sheets and were $27.9 million and $11.2 million, respectively, as of both March 31, 2020 and December 31, 2019.

2019 Notes

As of March 31, 2019, senior notes payable in the amount of $40.0 million were due to a group of institutional holders, and had an interest rate of 6.11% per annum and were originally due in December 2019 (“2019 Notes”). On July 29, 2019, we called and redeemed the $40.0 million outstanding balance.

Covenants and Events of Default

Our Credit Agreement requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below. Our failure to comply with these covenants would constitute an event of default under the Credit Agreement. Additionally, our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 2.75% Convertible Notes or our Credit Agreement would constitute an event of default under the indenture governing our 2.75% Convertible Notes or the Credit Agreement. A default under our Credit Agreement could result in (i) us no longer being entitled to borrow under such facility; (ii) termination of such facility; (iii) the requirement that any letters of credit under such facility be cash collateralized; (iv) acceleration of amounts owed under the Credit Agreement; and/or (v) foreclosure on any lien securing the obligations under such facility. A default under the indenture governing our 2.75% Convertible Notes could result in acceleration of the maturity of the notes.

The most significant financial covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. As of March 31, 2020, the Consolidated Leverage Ratio was 1.97, which did not exceed the maximum of 3.25. Our Consolidated Interest Coverage Ratio was 9.02, which exceeded the minimum of 4.00. To accommodate the delays in filing our financial statements, we entered into amendments with our lenders to extend the deadline for filing the 2019 Annual Report on Form 10-K and all of our 2020 Quarterly Reports on Form 10-Qs to February 28, 2021.