Long-Term Debt and Financing Arrangements

12 Months Ended

Dec. 31, 2020

Long-Term Debt and Financing Arrangements

NOTE 11. Long-Term Debt and Financing Arrangements

On July 1, 2017, we entered into a five year, $350 million unsecured credit agreement (the "Credit Agreement"). Borrowings under the Credit Agreement generally bear interest at a variable rate equal to (i) LIBOR plus a specified margin based upon Hub’s total net leverage ratio (as defined in the Credit Agreement) (the "Total Net Leverage Ratio"), or (ii) the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin based upon the Total Net Leverage Ratio. The specified margin for Eurodollar loans varies from 100.0 to 200.0 basis points per annum. The specified margin for base rate loans varies from 0.0 to 100.0 basis points per annum. Hub must also pay (1) a commitment fee ranging from 10.0 to 25.0 basis points per annum (based upon the Total Net Leverage Ratio) on the aggregate unused commitments and (2) a letter of credit fee ranging from 100.0 to 200.0 basis points per annum (based upon the Total Net Leverage Ratio) on the undrawn amount of letters of credit.

We have standby letters of credit that expire in 2021. As of December 31, 2020, our letters of credit were $37.7 million.

As of December 31, 2020, we had no borrowings under the Credit Agreement and our unused and available borrowings were $312.3 million. We were in compliance with our debt covenants as of December 31, 2020.

We have entered into various Equipment Notes (“Notes”) for the purchase of tractors, trailers and containers. The Notes are secured by the underlying equipment financed in the agreements.

Our outstanding debt is as follows (in thousands):


	December 31,			December 31,
	2020			2019
	(in thousands)

Interim funding for equipment received and expected to be converted to an equipment note in subsequent year; interest paid at a variable rate	$	8,902		$	-

Secured Equipment Notes due on various dates in 2025 commencing on various dates in 2020; interest is paid monthly at a fixed annual rate between 1.51% and 1.80%		74,494			-

Secured Equipment Notes due on various dates in 2024 commencing on various dates in 2017, 2019 and 2020; interest is paid monthly at a fixed annual rate between 2.50% and 3.59%		49,920			62,690

Secured Equipment Notes due on various dates in 2023 commencing on various dates from 2016 to 2019; interest is paid monthly at a fixed annual rate between 2.20% and 4.20%		112,668			153,350

Secured Equipment Notes due on various dates in 2022 commencing on various dates from 2015 to 2017; interest is paid monthly at a fixed annual rate of between 2.20% and 2.90%		8,943			16,892

Secured Equipment Notes due on various dates in 2021 commencing on various dates from 2014 to 2017; interest is paid monthly at a fixed annual rate between 2.02% and 2.96%		15,432			35,076

Secured Equipment Notes due on various dates in 2020 commencing on various dates from 2015 to 2016; interest is paid monthly at a fixed annual rate between 1.72% and 2.78%		-			13,617

		270,359			281,625

Less current portion		(93,562	)		(94,691	)
Total long-term debt	$	176,797		$	186,934

Aggregate principal payments, in thousands, due subsequent to December 31, 2020, are as follows:

Year 1	$	93,562
Year 2		77,205
Year 3		58,373
Year 4		26,863
Year 5		14,356
	$	270,359