The following table provides a summary of the Companys outstanding borrowings under
the Credit Facility:
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March 31, 2019
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December 31, 2018
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Term Loan
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Revolver
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Term Loan
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Revolver
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Amount borrowed
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$
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200,000
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$
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$
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200,000
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$
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Unamortized issuance costs
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(4,826
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)
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1,066
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(5,408
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)
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1,195
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Carrying amount
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$
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195,174
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$
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1,066
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$
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194,592
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$
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1,195
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Effective interest rate
(1)
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5.47
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%
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n/a
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5.09
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%
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n/a
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(1)
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Includes amortization of issuance costs.
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During the three months ended March 31, 2019, the Company recognized $2,892 of interest expense on the Credit Facility. Unamortized
issuance costs related to the Revolver of $1,066 and $1,195 at March 31, 2019 and December 31, 2018, respectively, are included within other noncurrent assets on the Consolidated Balance Sheet. The fair value of the Companys
long-term debt (classified as Level 2 within the fair value hierarchy) was $194,876 and $196,126 at March 31, 2019 and December 31, 2018, respectively.
The credit agreement includes a financial covenant that requires that the Company maintain a Total Leverage Ratio (as defined below),
calculated as of the last day of each fiscal quarter, equal to or less than the ratio set forth opposite such fiscal quarter:
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Fiscal Quarter Ending
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Total Leverage Ratio
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March 31, 2019
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2.75:1.00
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June 30, 2019
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2.50:1.00
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September 30, 2019
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2.50:1.00
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December 31, 2019
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2.50:1.00
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March 31, 2020
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2.25:1.00
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June 30, 2020
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2.25:1.00
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September 30, 2020 and each subsequent fiscal quarter ending on or before the maturity
date
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2.00:1.00
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Total Leverage Ratio means, as of the last day of any fiscal quarter, the ratio of Consolidated Total Debt of
the Company and its restricted subsidiaries (as defined in the credit agreement) as of such date to Consolidated EBITDA of the Company and its restricted subsidiaries (as defined in the credit agreement) for the four consecutive fiscal quarters
ended on such date.
The Companys obligations under the Term Loan and Revolver are unconditionally guaranteed by the Company and
certain of its subsidiaries and secured by substantially all of the present and future property and assets of the Company and such subsidiaries, in each case, subject to customary exceptions and exclusions.
The credit agreement contains customary affirmative covenants for transactions of this type and other affirmative covenants agreed to by the
parties, including, among others, the provision of annual and quarterly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters. The credit agreement contains customary
negative covenants, including among others, restrictions on the incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, repurchasing equity interests of the Company, entering into affiliate transactions
and asset sales. The credit agreement also provides for a number of customary events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control and judgment defaults.
The Company is in compliance with its covenants under the credit agreement.
13. Preferred Shares
On April 10,
2018, the Company filed a Certificate of Designations of Series A
Non-Voting
Convertible Preferred Stock with the Secretary of State of the State of Delaware establishing the rights, preferences, privileges,
qualifications, restrictions, and limitations relating to the Preferred Shares. The Preferred Shares are intended to provide ETFS Capital with economic rights equivalent to the Companys common stock on an
as-converted
basis. The Preferred Shares have no voting rights, are not transferable and have the same priority with regard to dividends, distributions and payments as the common stock.
As described in the Certificate of Designations, the Company will not issue, and ETFS Capital does not have the right to require the Company
to issue, any shares of common stock upon conversion of the Preferred Shares, if, as a result of such conversion, ETFS Capital (together with certain attribution parties) would beneficially own more than 9.99% of the Companys outstanding
common stock immediately after giving effect to such conversion.
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