NOTES PAYABLE AND BORROWINGS UNDER CAPITAL LEASES

As of September 30, 2016, notes payable and borrowings under capital leases consisted of the following (in thousands):



	September 30, 2016			December 31, 2015			Annual Contractual Interest Rate			Effective Interest Rate		Maturity Date
Term loan A	$	337,500		$	351,563		3.09	%	⁽¹⁾	3.15	%	July 2019
Term loan B	—			148,000			N/A			N/A		July 2017
Term loan A-2	135,000			—			2.97	%	⁽²⁾	2.99	%	July 2019
Total term loans	472,500			499,563
Deferred loan costs	(4,490		)	(5,781		)
Capital leases	125			153
Less: current portion of notes payable and borrowings under capital leases	(36,497		)	(32,970		)
Long term portion	$	431,638		$	460,965


(1)	Bears interest at LIBOR plus 2.25% or the prime rate plus 1.25% at the Company's option, subject to certain rate adjustments based upon the Company's total leverage ratio.


(2)	Bears interest at LIBOR plus 2.125% or the prime rate plus 1.125% at the Company's option, subject to certain rate adjustments based upon the Company's total leverage ratio.

In July 2016, the Company refinanced its Amended and Restated First Lien Credit Agreement (Credit Agreement). The Company exchanged its $135 million of outstanding tranche B term loans maturing July 2017 with substantially the same amount of the new tranche A-2 term loans maturing July 2019. The $342 million of existing tranche A term loans and the $75 million revolving credit facility were not changed. As part of the $135 million refinancing transaction, $57.6 million was recorded as an extinguishment, and $77.0 million was rolled over into the new tranche A-2 term loans and was treated as a debt modification.

The proceeds of the tranche A-2 term loans were used to (i) refinance the remaining tranche B term loans outstanding under the Credit Agreement and (ii) pay related fees and expenses. As a result of this refinancing, approximately $1.4 million in fees and costs were incurred, of which $0.8 million were recorded as deferred loan costs with the remainder expensed. Also as a result of this refinancing, the Company expensed $0.3 million of the loan fees associated with a previous refinancing of the Company's Credit Agreement.

The Company is required to pay a commitment fee of 0.50%, subject to decrease to 0.375% based on its total leverage ratio, on the daily unused amount of the commitments under the revolving credit facility, as well as fronting fees and other customary fees for letters of credit issued under the revolving credit facility.

The Company is permitted to make voluntary prepayments at any time without payment of a premium. The Company is required to make mandatory prepayments of term loans (without payment of a premium) with (i) net cash proceeds from issuances of debt (other than certain permitted debt), and (ii) net cash proceeds from certain non-ordinary course asset sales and casualty and condemnation proceeds (subject to reinvestment rights and other exceptions).

The Tranche A and A-2 term loans will be repaid in quarterly installments in aggregate annual amounts as follows (in thousands):



Year ending December 31:
2016	$	9,563
2017	38,250
2018	41,438
2019	383,249
Total	$	472,500

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. The Credit Agreement also contains financial covenants that require the Company to maintain a minimum consolidated interest coverage ratio of at least 3.50 to 1.00 and a maximum total leverage ratio, currently at 4.25 to 1.00. The Company was in compliance with these financial covenants under the credit facilities at September 30, 2016.

The credit facility is secured by substantially all of the Company’s assets and the assets of the borrower and its subsidiaries, other than specifically excluded assets.