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NOTES PAYABLE TO BANKS | 9 Months Ended
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Sep. 30, 2021
NOTES PAYABLE TO BANKS |
NOTES PAYABLE TO BANKS | 12. NOTES PAYABLE TO BANKS The Company has a revolving Credit Agreement with Bank of America and four other lenders which provides for a line of credit of up to $100 million, including a $35 million letter of credit subfacility, and a $35 million swingline subfacility. The facility contains customary terms and conditions, including restrictions on indebtedness, dividend payments, business combinations and other related items. The revolving credit facility includes a full and unconditional guarantee by the Company's 100 percent owned domestic subsidiaries whose assets equal substantially all of the consolidated assets of the Company and its subsidiaries. Certain of the Company’s minor subsidiaries are not guarantors. The Credit Agreement’s maturity date is July 26, 2023. During the third quarter of 2020, the Company entered into Amendment No. 5 to Credit Agreement (the “Amendment”). This Amendment (1) reduced the maximum amount available for borrowing under the credit facility from $125 million to $100 million, (2) decreased the minimum tangible net worth covenant level from not less than $600 million to not less than $400 million, and (3) increased the margin spreads and commitment fees payable by RPC by 37.5 and 5 basis points, respectively, at each pricing level of the applicable rate without any changes to the leverage ratios used to calculate such spreads. The Credit Agreement includes the following covenants: (i) when RPC’s trailing four quarter EBITDA (as calculated under the Credit Agreement) is equal to or greater than $50 million, a maximum consolidated leverage ratio of 2.50:1.00 and a minimum debt service coverage ratio of 2.00:1.00, and (ii) when RPC’s trailing four quarter EBITDA is less than $50 million, a minimum tangible net worth of no less than $400 million. As of September 30, 2021, the Company was in compliance with these covenants. Revolving loans under the amended revolving credit facility bear interest at one of the following two rates at the Company’s election:
| ● | the Eurodollar Rate, which is the rate per annum equal to the London Interbank Offering Rate (“LIBOR”); plus, a margin ranging from 1.5% to 2.5%, based on a quarterly consolidated leverage ratio calculation; or
| ● | the Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) Bank of America’s publicly announced “prime rate,” and (c) the Eurodollar Rate plus 1.00%; in each case plus a margin that ranges from 0.5% to 1.5% based on a quarterly consolidated leverage ratio calculation.
In addition, the Company pays an annual fee ranging from 0.20% to 0.30%, based on a quarterly consolidated leverage ratio calculation, on the unused portion of the credit facility. The Company has incurred total loan origination fees and other debt related costs associated with this revolving credit facility in the aggregate of approximately $3.4 million. These costs are being amortized to interest expense over the remaining term of the loan, and the remaining unamortized balance of $0.2 million at September 30, 2021 is classified as part of non-current other assets. As of September 30, 2021, RPC had no outstanding borrowings under the revolving credit facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaled $17.7 million; therefore, a total of $82.3 million of the facility was available. Interest incurred, which includes facility fees on the unused portion of the revolving credit facility and the amortization of loan cost, and interest paid on the credit facility were as follows for the periods indicated: ​
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​ | ​ | Three months ended | ​ | Nine months ended
​ | ​ | September 30, | ​ | September 30,
(in thousands) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Interest incurred | ​ | $ | 86 | ​ | $ | 20 | ​ | $ | 192 | ​ | $ | 173
Interest paid | ​ | ​ | 42 | ​ | ​ | 40 | ​ | ​ | 124 | ​ | ​ | 120
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