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LONG-TERM DEBT | 12 Months Ended
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Dec. 31, 2017
LONG-TERM DEBT [Abstract] |
LONG-TERM DEBT | NOTE 9 – LONG-TERM DEBT Long-term debt consisted of the following (in thousands):
|  | December 31, |
|  | 2017 |  |  | 2016 |
ABL Revolver |  | $ | - |  |  | $ | - |
Term Loan B |  |  | 249,375 |  |  |  | - |
Line of credit |  |  | - |  |  |  | 147,600 |
Term loan |  |  | - |  |  |  | 74,500 |
Promissory note payable in monthly installments at 2.9% through January 2021, collateralized by equipment |  |  | 2,722 |  |  |  | 3,577 |
Less unamortized debt issuance costs |  |  | (10,073 | ) |  |  | (992 | )
Total Debt |  |  | 242,024 |  |  |  | 224,685 |
Less: Current maturities |  |  | (3,381 | ) |  |  | (51,354 | )
Total Long-term Debt |  | $ | 238,643 |  |  | $ | 173,331 |
ABL Facility On August 29, 2017, DXP entered into a five year, $85 million Asset Based Loan and Security Agreement (the “ABL Credit Agreement”). The ABL Credit Agreement provides for asset-based revolving loans in an aggregate principal amount of up to $85.0 million (the “ABL Loans”). The ABL Loans may be increased, in increments of $10.0 million, up to an aggregate of $50.0 million. The facility will mature on August 29, 2022. Interest accrues on outstanding borrowings at a rate equal to LIBOR or CDOR plus a margin ranging from 1.25% to 1.75% per annum, or at an alternate base rate, Canadian prime rate or Canadian base rate plus a margin ranging from 0.25% to 0.75% per annum, in each case, based upon the average daily excess availability under the facility for the most recently completed calendar quarter. Fees ranging from 0.25% to 0.375% per annum are payable on the portion of the facility not in use at any given time. The interest rate for the ABL facility was 2.9% at December 31, 2017. The unused line fee was 0.375% at December 31, 2017. The obligations of the Borrowers are guaranteed by the Company and its direct and indirect material wholly-owned subsidiaries other than certain excluded subsidiaries. The ABL Credit Agreement contains a financial covenant restricting the Company from allowing its Fixed Charge Coverage Ratio be less than 1.00 to 1.00 during a compliance period, which is triggered when the availability under ABL facility falls below a threshold set forth in the ABL Credit Agreement. As of December 31, 2017, the Company's consolidated Fixed Charge Coverage Ratio was 3.67 to 1.00. The ABL Loan is secured by substantially all of the assets of the Company. Senior Secured Term Loan B: On August 29, 2017, DXP entered into a six year Senior Secured Term Loan B (the “Term Loan”) with an original principal amount of $250 million which amortizes in equal quarterly installments of 0.25% with the balance payable in August 2023, when the facility matures. Subject to securing additional lender commitments, the Term Loan allows for incremental increases in facility size up to an aggregate of $30 million, in minimum increments of $10 million, plus an additional amount such that DXP’s Secured Leverage Ratio (as defined under the Term Loan) would not exceed 3.60 to 1.00. We are required to repay the Term Loan in connection with certain asset sales and insurance proceeds, certain debt proceeds and 50% of excess cash flow, reducing to 25%, if our total leverage ratio is no more than 3.00 to 1.00 and 0%, if our total leverage ratio is no more than 2.50 to 1.00. In addition, the Term Loan contains a number of customary restrictive covenants. The interest rate for the Term Loan was 7.1 % as of December 31, 2017. The Term Loan requires that the company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of restricted cash, not to exceed $30 million) as of such day to EBITDA, beginning with the fiscal quarter ending December 31, 2017, is either equal to or less than as indicated in the table below:
Fiscal Quarter | Secured Leverage Ratio
December 31, 2017 | 5.75:1.00
March 31, 2018 | 5.75:1.00
June 30, 2018 | 5.50:1.00
September 30, 2018 | 5.50:1.00
December 31, 2018 | 5.25:1.00
March 31, 2019 | 5.25:1.00
June 30, 2019 | 5.00:1.00
September 30, 2019 | 5.00:1.00
December 31, 2019 | 4.75:1.00
March 31, 2020 | 4.75:1.00
June 30, 2020 and each Fiscal Quarter thereafter | 4.50:1.00
As of December 31, 2017, the Company's consolidated Secured Leverage Ratio was 3.59 to 1.00. The Term Loan is guaranteed by each of the Company’s direct and indirect material wholly owned subsidiaries, other than any of the Company’s Canadian subsidiaries and certain other excluded subsidiaries. The Term Loan is secured by substantially all of the assets of the Company. Extinguishment of Previously Existing Credit Facility As set forth above, on August 29, 2017, the Company terminated its previously existing credit agreement and facility and replaced it with the Term Loan and the ABL Credit Agreement. The terminated facility was under the Amended and Restated Credit Agreement, dated as of January 2, 2014, by and among the Company, as borrower, and Wells Fargo Bank, National Association, as issuing lender and administrative agent for other lenders (the “Original Credit Agreement”). This Original Credit Agreement was subsequently amended five times by the First Amendment to Restated Credit Agreement dated as of August 6, 2015, Second Amendment to Restated Credit Agreement dated as of September 30, 2015, Third Amendment to Restated Credit Agreement dated as of May 12, 2016, Fourth Amendment to Restated Credit Agreement dated as of August 15, 2016, and Fifth Amendment to Amended and Restated Credit Agreement dated as of November 28, 2016. A description of the material terms of these terminated agreements can be found in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2017. In connection with the extinguishment of the previously existing Credit Facility we recorded a $0.6 million write-off of debt issuance costs, which was included in interest expense during the third quarter of 2017. As of December 31, 2017, the maturities of long-term debt for the next five years and thereafter were as follows (in thousands):
2018 |  | $ | 3,381 |
2019 |  |  | 3,405 |
2020 |  |  | 3,436 |
2021 |  |  | 2,500 |
2022 |  |  | 2,500 |
Thereafter |  |  | 236,875 |
Total |  | $ | 252,097 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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