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Debt and Short-Term Borrowings | 9 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
Debt and Short-Term Borrowings | Debt and Short-Term Borrowings Total debt at September 30, 2018 and December 31, 2017 follows:
(In thousands) |  | September 30, 2018 |  | December 31, 2017
Senior Secured Credit Facility (2018 Term A) due on April 17, 2018 paying interest at a variable interest rate (London InterBank Offered Rate (“LIBOR”) plus applicable margin(1)(3)) |  | $ | — |  |  | $ | 26,690 |
Senior Secured Credit Facility (2020 Term A) due on January 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin(3)(4)) |  | 189,974 |  |  | 200,653 |
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin(2)(3)) |  | 375,165 |  |  | 376,395 |
Senior Secured Revolving Credit Facility(6) |  | — |  |  | 12,000 |
Note Payable due on August 31, 2019(5) |  | — |  |  | 584 |
Note Payable due on April 30, 2021(3) |  | 330 |  |  | 418 |
Total debt |  | $ | 565,469 |  |  | $ | 616,740 |
(1) | Applicable margin of 2.25% at December 31, 2017.
(2) | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.50% at September 30, 2018 and December 31, 2017.
(3) | Net of unaccreted discount and unamortized debt issue costs, as applicable.
(4) | Applicable margin of 2.50% at September 30, 2018 and December 31, 2017.
(5) | Fixed interest rate of 7.50%. The Company prepaid the outstanding principal balance of this note during the second quarter of 2018 without penalties.
(6) | Applicable margin of 2.50% at September 30, 2018 and December 31, 2017.
Senior Secured Credit Facilities On April 17, 2013, EVERTEC Group entered into a credit agreement (the “2013 Credit Agreement”) governing the senior secured credit facilities, consisting of a $300.0 million term loan A facility (the “Term A Loan”), a $400.0 million term loan B facility (the “Term B Loan”, together with the Term A Loan, the “Senior Secured term loans”) and a $100.0 million revolving credit facility (the "Revolving Facility"). During 2016, the Company entered into two separate amendments to the 2013 Credit Agreement. In the second quarter of 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries of the Company, entered into a second amendment and waiver to the outstanding 2013 Credit Agreement (the “Second Amendment”). In the fourth quarter of 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries of the Company, entered into a third amendment (the “Third Amendment”) to the 2013 Credit Agreement. The Third Amendment extends the maturity of (a) approximately $219 million of EVERTEC Group’s existing approximately $250 million of Term A loan facility to January 17, 2020 (the “2020 Term A Loan”) and (b) $65 million of EVERTEC Group’s existing $100 million of Revolving Facility to January 17, 2020. The remaining approximately $30 million of Term A loan (the “2018 Term A Loan”) and the $35 million of Revolving Facility were not extended and matured as originally scheduled on April 17, 2018. The Term B Loan will remain in place and mature as originally scheduled on April 17, 2020. The unpaid principal balance at September 30, 2018 of the 2020 Term A Loan and the Term B Loan was $191.4 million and $379.0 million, respectively. At September 30, 2018, the 2018 Term A Loan had been fully repaid. The additional borrowing capacity for the Revolving Facility at September 30, 2018 was $65.0 million. Notes payable In May 2016, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $0.7 million and in October 2016 entered into an interest bearing agreement of $1.1 million, to purchase software. As of September 30, 2018 and December 31, 2017, the outstanding principal balance of the notes payable is $0.4 million and $1.0 million, respectively. The October 2016 interest bearing note payable outstanding principal balance was prepaid without penalties during the second quarter of 2018. The current portion of these notes is recorded as part of accounts payable and the long-term portion is included in other long-term liabilities. Interest Rate Swap As of September 30, 2018, the Company has the following interest rate swap agreement converting a portion of the interest rate exposure on the Company's Term B Loan from variable to fixed:
Effective date |  | Maturity Date |  | Notional Amount |  | Variable Rate |  | Fixed Rate
January 2017 |  | April 2020 |  | $200 million |  | 1-month LIBOR |  | 1.9225%
The Company has accounted for this transaction as a cash flow hedge. The fair value of the Company’s derivative instrument is determined using a standard valuation model. The significant inputs used in this model are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2 within the fair value hierarchy. Inputs used in this standard valuation model for derivative instruments include the applicable forward rates and discount rates. The discount rates are based on the historical LIBOR Swap rates. At September 30, 2018 and December 31, 2017, the carrying amount of the derivative on the Company’s balance sheets is as follows:
(Dollar amounts in thousands) |  | September 30, 2018 |  | December 31, 2017
Other long-term assets |  | $ | 2,546 |  |  | $ | 214 |
During the nine months ended September 30, 2018, the Company reclassified losses of $0.1 million from accumulated other comprehensive loss into income through interest expense. Based on current LIBOR rates, the Company expects to reclassify gains of $0.5 million from accumulated other comprehensive loss into income through interest expense over the next 12 months. Refer to Note 6 for tabular disclosure of the fair value of derivatives and to Note 7 for tabular disclosure of gains recorded on cash flow hedging activities. The cash flow hedge is considered highly effective and no impact on earnings is expected due to hedge ineffectiveness.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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