Long-Term Debt

6 Months Ended

Jun. 30, 2019

12. Long-Term Debt

On April 11, 2018 and in connection with the ETFS Acquisition, the Company entered into the Credit Facility pursuant to which the lenders extended a $200,000 Term Loan and made available a $50,000 Revolver. Interest on the Term Loan accrues at an annual rate equal to LIBOR, plus up to

2.00

% (commencing at

LIBOR

, plus

1.75

%), and interest on the Revolver accrues at an annual rate equal to LIBOR, plus up to

1.50

% (commencing at LIBOR, plus

1.25

%), in each case, with the exact interest rate margin determined based on the Total Leverage Ratio (as defined below). The Revolver is also subject to a facility fee equal to an annual rate of up to 0.50% of the actual daily amount of the aggregate commitments (whether used or unused) under the Revolver, with the exact facility fee rate determined based on the Total Leverage Ratio. The Credit Facility matures on April 11, 2021. The Term Loan does not amortize and the entire principal balance is due in a single payment on the maturity date.

The following table provides a summary of the Company’s outstanding borrowings under the Credit Facility:


	June 30, 2019					December 31, 2018
	Term Loan			Revolver (1)		Term Loan			Revolver (1)
Amount borrowed	$	200,000		$	—	$	200,000		$	—
Unamortized issuance costs		(4,238	)		935		(5,408	)		1,195

Carrying amount	$	195,762		$	935	$	194,592		$	1,195

Effective interest rate (2)		5.46	%		n/a		5.09	%		n/a

(1)	The available capacity under the Revolver is subject to compliance with the Total Leverage Ratio.
(2)	Includes amortization of issuance costs.

Interest expense recognized on the Credit Facility during the three months ended June 30, 2019 and 2018 was $2,910 and $2,356, respectively, and during the six months ended June 30, 2019 and 2018 was $5,802 and $2,356, respectively. Unamortized issuance costs related to the Revolver of $935 and $1,195 at June 30, 2019 and December 31, 2018, respectively, are included in other noncurrent assets on the Consolidated Balance Sheet. The fair value of the Company’s long-term debt (classified as Level 2 within the fair value hierarchy) was $197,500 and $196,126 at June 30, 2019 and December 31, 2018, respectively.

The credit agreement includes a financial covenant that requires the Company to 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:


Fiscal Quarter Ending	Total Leverage Ratio
June 30, 2019		2.50:1.00
September 30, 2019		2.50:1.00
December 31, 2019		2.50:1.00
March 31, 2020		2.25:1.00
June 30, 2020		2.25:1.00
September 30, 2020 and each subsequent fiscal quarter ending on or before the maturity date		2.00:1.00

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 Company’s 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.