6. Debt

Term Loans and Revolving Credit Facilities

Pursuant to a credit agreement (the “Credit Agreement”), we have a revolving credit facility (the “Revolver”), where we can borrow up to $250,000, subject to the terms of the agreement, and a term A loan with an aggregate initial principal amount of $250,000 (the “Term A Loan,” and together with the Revolver, the “Credit Facilities”). The Credit Facilities have applicable margins equal to 2.00%, 1.75% or 1.50%, in the case of LIBOR and Eurodollar rate loans and 1.00%, 0.75% or 0.50%, in the case of base rate loans; the applicable margins are based on the First Lien Net Leverage Ratio, as defined in the Credit Agreement. The LIBOR rate is subject to a floor of 0.00%. The Credit Facilities mature on June 29, 2022.

The Credit Facilities require, among other things, the maintenance of (i) a maximum First Lien Net Leverage Ratio and (ii) a minimum consolidated interest coverage ratio, each calculated on a trailing four quarter basis, and contain an acceleration clause should an event of default (as defined in the Credit Agreement) occur. As of March 31, 2020, we were in compliance with the financial covenants.

As of March 31, 2020, we had $146,000 in borrowings under the Revolver and had outstanding letters of credit of $2,709, leaving $101,291 available for borrowings and letters of credit under the Revolver. We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less than one year.

As of March 31, 2020, the interest rates for the Revolver and the Term A Loan were 2.54% and 3.19%, respectively. The weighted-average interest rates for the outstanding Revolver were 3.44% and 3.82% for the nine months ended March 31, 2020 and 2019, respectively. The weighted-average interest rates for the Term A Loan were 3.45% and 3.50% for the nine months ended March 31, 2020 and 2019, respectively.

In July 2017, we entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt to a fixed interest rate of 1.8325% plus the applicable rate. The agreement matures concurrently with the Credit Agreement.

In March 2020, we entered into an interest rate swap agreement on an additional $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt to a fixed rate of 0.620% plus the applicable rate. On the maturity of the July 2017 agreement, this agreement increases to a notional principal amount of $300,000 through June 30, 2025, and effectively converts the floating LIBOR portion of our interest obligation on $300,000 of debt to a fixed interest rate of 0.620% plus the applicable rate. We designated the interest rate swaps as highly effective cash flow hedges. For additional details, see “—Derivatives.”

Long-Term Debt


	March 31,		June 30,
As of	2020		2019
Term A Loan due June 2022	$	221,875	$	231,250
Other		—		40
		221,875		231,290
Unamortized debt issuance costs and debt discount		(836)		(1,115)
		221,039		230,175
Less: current maturities		(17,188)		(12,540)
	$	203,851	$	217,635