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Long-Term Debt and Revolving Line of Credit
 9 Months Ended
Sep. 30, 2021
Long-Term Debt and Revolving Line of Credit  
Long-Term Debt and Revolving Line of Credit

6.

Long-Term Debt and Revolving Line of Credit

Effective August 14, 2017, the Company entered into a credit agreement with lenders for a $250,000 term loan (“Credit Agreement”). The Credit Agreement is a syndicated arrangement with various lenders providing the financing. The $250,000 term loan is due to mature on August 14, 2024. The Company also entered into a $20,000 revolving line of credit with lenders with a sub-commitment for issuance of letters of credit of $10,000.

The Company and lenders entered into Amendment No. 1 to the Credit  Agreement on January 25, 2018, where an additional tranche of $25,000 was added to the term loan. The amortization schedule of the new tranche was made coterminous with the rest of the term loan. There were no other changes to the terms of the Credit Agreement.

The Company and lenders entered into Amendment No. 2 to the Credit Agreement on April 3, 2018, where an additional tranche of $40,000 was added to the term loan. The amortization schedule of the new tranche was made coterminous with the rest of the term loan. There were no other changes to the terms of the Credit Agreement.

The Company and lenders entered into a third amended and restated loan agreement on June 17, 2021 (“Third Amendment”), which provides for, among other things, (i) the extension of the termination date applicable to the revolving credit commitments under the Credit Agreement to August 2025, (ii) the extension of the maturity date applicable to the term loans under the Credit Agreement to August 2026, and (iii) an increase of approximately $80,000 in commitments available under the revolving line of credit (resulting in an aggregate amount of commitments of $100,000).  The term loan under the Third Amendment has substantially the same terms as the existing term loans and revolving credit commitments. The Credit Agreement is collateralized by substantially all U.S. assets and stock pledges for the non-U.S. subsidiaries and contain various financial and nonfinancial covenants.

As of September 30, 2021,  available borrowings under the revolving lines of credits were $100,000. Available borrowings under the revolving lines of credits of $20,000 at December 31, 2020 were reduced by $120 standby letters of credit issued to a landlord in lieu of a security deposit in addition to any outstanding borrowings.  

The Company was in compliance with all financial covenants as of September 30, 2021 and December 31, 2020. Borrowings under the Credit Agreement are subject to a variable interest rate at LIBOR plus a margin. The applicable margins are based on achieving certain levels of compliance with financial covenants.

The effective interest rate was 3.68% and 4.48% for the nine months ended September 30, 2021 and the year ended December 31, 2020 for the term loan debt, respectively. As discussed previously, the Company entered into interest rate swap agreements to mitigate the interest risk.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $2,773, $8,444, $2,974, and $11,047 for the three and  nine months ended September 30, 2021 and 2020, respectively. Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $30 and $32 at September 30, 2021 and December 31, 2020, respectively, and is included in accrued expenses. Interest paid on the Credit Agreement with respect to the revolving line of credit was $93 and $457 for the nine months ended September 30, 2021 and 2020, respectively. There was less than $1 accrued interest payable and no accrued interest payable on the revolving line of credit at September 30, 2021 and December 31, 2020.

Effective August 14, 2017, the Company entered into an unsecured credit agreement with another lender for a $100,000 term loan (“Loan Agreement”). The loan bears interest at 8.25% which is payable in semi-annual installments on January 15 and July 15 through August 14, 2025, at which time all outstanding principal and interest are due. Under the Loan Agreement, the Company could voluntarily repay outstanding loans without premium or penalty. On July 15, 2020, the Company made a $20,000 prepayment on the loan, which reduced the amount outstanding to $80,000. On December 28, 2020, the Company repaid the $80,000 aggregate principal amount owed under the Loan Agreement, including $3,000 of accrued interest using a portion of the proceeds from the IPO. The Company's obligations under the Loan Agreement were discharged on that date. Interest paid on the loan amounted to $0 and $8,388 for the nine months ended September 30, 2021 and 2020, respectively.

Long-term debt consists of the following:

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SEPTEMBER 30, 

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DECEMBER 31, 

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           2021           

    

           2020           

Term loans

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$

301,245

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$

304,099

Less: debt issuance costs

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(6,042)

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(5,319)

Total

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295,203

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298,780

Current portion of long-term debt

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(3,020)

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(4,680)

Long-term debt, net of current portion and debt issuance costs

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$

292,183

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$

294,100

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The principal amount of long-term debt outstanding as of September 30, 2021 matures in the following years:

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2021

    

2022

    

2023

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2024

​

2025

    

Thereafter

    

TOTAL

Maturities

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$

755

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$

3,020

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$

3,020

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$

3,020

​

​

3,020

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$

288,410

​

$

301,245

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The Credit Agreement requires the Company to make an annual mandatory prepayment as it relates to the Company’s Excess Cash Flow calculation. For the year ended December 31, 2020, the Company was required to make a mandatory prepayment on the term loan of approximately $1,527 on or before April 30, 2021. The prepayment was included in the current portion of long-term debt on the condensed consolidated balance sheets. For the credit agreement, the Company is required to make a quarterly principal payment of $755 on the term loan each quarter starting from the end of September 2021.

The fair values of the Company’s variable interest term loan and revolving line of credit are not significantly different than their carrying value because the interest rates on these instruments are subject to change with market interest rates.