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Debt Obligations | 12 Months Ended
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Dec. 31, 2017
Debt Obligations |
Debt Obligations | (4) Debt Obligations Debt obligations consisted of the following:
|  | As of December 31, |
|  | 2017 |  | 2016 |
|  | (in thousands) |
Credit facility at a floating rate of interest of one-month LIBOR plus 1.50% at December 31, 2017, secured by engines. The facility has a committed amount of $890.0 million at December 31, 2017, which revolves until the maturity date of April 2021 |  | $ | 491,000 |  | $ | 608,000 |
WEST III Series A 2017-1 term notes payable at a fixed rate of interest of 4.69%, maturing in August 2042, secured by engines |  |  | 289,295 |  |  | — |
WEST III Series B 2017-1 term notes payable at a fixed rate of interest of 6.36%, maturing in August 2042, secured by engines |  |  | 41,370 |  |  | — |
WEST II Series 2012-A term notes payable at a fixed rate of interest of 5.50%, maturing in September 2037, secured by engines |  |  | 259,022 |  |  | 279,541 |
Note payable at fixed interest rates ranging from 2.60% to 2.97%, maturing in July 2024, secured by an aircraft |  |  | 12,720 |  |  | 14,453 |
Note payable at a variable interest rate of one-month LIBOR plus 2.25%, maturing in January 2018, secured by engines |  |  | 10,336 |  |  | 11,709 |
|  |  | 1,103,743 |  |  | 913,703 |
Less: unamortized debt issuance costs |  |  | (18,338) |  |  | (13,448) |
Total debt obligations |  | $ | 1,085,405 |  | $ | 900,255 |
One-month LIBOR was 1.57% and 0.77% as of December 31, 2017 and December 31, 2016, respectively. Principal outstanding at December 31, 2017, is repayable as follows:
Year |  | (in thousands) |
2018 |  | $ | 48,401 |
2019 |  |  | 38,537 |
2020 |  |  | 38,137 |
2021 (includes $491.0 million outstanding on revolving credit facility) |  |  | 529,374 |
2022 |  |  | 190,889 |
Thereafter |  |  | 258,405 |
|  | $ | 1,103,743 |
Virtually all of the above debt requires ongoing compliance with the covenants of each financing, including debt/equity ratios, minimum tangible net worth and minimum interest coverage ratios, and other eligibility criteria including customer and geographic concentration restrictions. The Company also has certain negative financial covenants such as liens, advances, change in business, sales of assets, dividends and stock repurchases. These covenants are tested either monthly or quarterly and the Company was in full compliance with all covenant requirements at December 31, 2017. At December 31, 2017, the Company had a revolving credit facility to finance the acquisition of equipment for lease as well as for general working capital purposes, with the amounts drawn under the facility not to exceed that which is allowed under the borrowing base as defined by the credit agreement. In April 2016, the Company entered into a Third Amended and Restated Credit Agreement which increased the revolving credit facility to $890.0 million from $700.0 million and extended the term to April 2021. This $890 million revolving credit facility has an accordion feature which would expand the entire credit facility up to $1 billion. As of December 31, 2017 and 2016, $399.0 million and $282.0 million were available under this facility, respectively. On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the revolving credit facility. Under the revolving credit facility, all subsidiaries except WEST II and WEST III jointly and severally guarantee payment and performance of the terms of the loan agreement. The guarantee would be triggered by a default under the agreement. At December 31, 2017, $330.7 million of WEST III term notes were outstanding. The assets of WEST III are not available to satisfy the Company’s obligations other than the obligations specific to WEST III. WEST III is consolidated for financial statement presentation purposes. WEST III’s ability to make distributions and pay dividends to the Company is subject to the prior payments of its debt and other obligations and WEST III’s maintenance of adequate reserves and capital. Under WEST III, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of maintenance reserve payments and lease security deposits are formulaically accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. The WEST III indenture requires that a minimum threshold of maintenance reserve and security deposit balances be held in restricted cash accounts. At December 31, 2017 and 2016, $259.0 million and $279.5 million of WEST II term notes were outstanding, respectively. The assets of WEST II are not available to satisfy the Company’s obligations other than the obligations specific to WEST II. WEST II is consolidated for financial statement presentation purposes. WEST II’s ability to make distributions and pay dividends to the Company is subject to the prior payments of its debt and other obligations and WEST II’s maintenance of adequate reserves and capital. Under WEST II, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, the WEST II indenture requires that a portion of maintenance reserve payments and all lease security deposits be held in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. In September 2016, the Company entered into an amendment (the “Amendment No. 2”) to the Amended and Restated Trust Agreement of WEST II, as amended by Trust Amendment No. 1, dated as of September 14, 2012. The Amendment No. 2 allows the Company to make additional equity contributions to fund engine maintenance expenses, to make up shortfalls in required net sale proceeds from engine dispositions and to provide additional funds in the acquisition of replacement engines for WEST II. These potential future equity contributions by the Company are voluntary. The Amendment No. 2 also increases the percentage of WEST II engines subject to disposition and modifies certain concentration limits. In July 2014, the Company closed on a loan with a ten year term totaling $13.4 million. During the second quarter of 2016, the Company closed on two additional loans totaling $4.7 million, repayable over the same initial ten year term. The interest is payable at fixed rates ranging from 2.60% to 2.97% for the initial five years of the loan term and principal and interest is paid monthly. The loans provided 100% of the funding for the purchase of a corporate aircraft and subsequent modifications and upgrades. The balance outstanding on these loans was $12.7 million and $14.5 million as December 31, 2017 and December 31, 2016, respectively. In January 2014, the Company extended the term of an existing loan that was scheduled to mature in January 2015. The loan had a term of 4 years and was subsequently repaid at the maturity date in January 2018. Interest was payable at one-month LIBOR plus 2.25% and principal and interest was paid quarterly. The loan was secured by three engines. The balance outstanding on this loan was $10.3 million and $11.7 million as of December 31, 2017 and December 31, 2016, respectively. In March 2015, the Company paid off the $23.1 million balance of two term notes at a 5% discount. This transaction resulted in the recording of a $1.2 million gain on debt extinguishment which has been included in the Consolidated Statement of Income for the year ended December 31, 2015.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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