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Bank Debt | 12 Months Ended
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Dec. 31, 2015
Bank Debt [Abstract] |
Bank Debt | (4) Bank Debt To finance the August 2014 Vectren Fuels acquisition we entered into a credit agreement with PNC Bank as administrative agent for a group of several other banks. The credit agreement allows for a $250 million revolver and a $175 million term loan. Our debt at December 31, 2015 was $249 million (term-$139, revolver-$110). The credit facility is collateralized by substantially all of Sunrise’s assets and we are the guarantor. Bank fees and other costs incurred in connection with this new facility were about $6.9 million, which were deferred and are being amortized over five years. Currently, all borrowings under the credit agreement bear interest at LIBOR (43 bps at December 31, 2015) plus 3.5%. We entered into swap agreements to fix the LIBOR component of the interest rate to achieve an effective fixed rate of no greater than 5% on 100% ($175 million) of the term loan and on $100 million of the revolver. The revolver swaps step down 10% each quarter commencing March 31, 2016. At December 31, 2015, these two interest rate swaps had an estimated net fair value liability of $.8 million consisting of a long-term asset of $.4 million and a current liability of $1.2 million. Such amounts are included in other long-term assets and accounts payable and accrued liabilities, respectively. The credit agreement also imposes certain other customary restrictions and covenants as well as certain milestones we must meet in order to draw down the full amount. Any non-tax cash distributions from Savoy are required to be applied toward the debt. There are two key ratio covenants stated in our credit agreement: (i) a minimum fixed charge coverage ratio of 1.25 to 1 and (ii) a maximum leverage ratio (funded debt/EBITDA) not to exceed 2.75 to 1. At December 31, 2015, our minimum fixed charge ratio was 1.42 and our leverage ratio was 2.67. Therefore, we were in compliance with these two ratios. Due to our reduction in coal sales, we anticipate to be in non-compliance with these two ratios sometime in 2016. We are in discussions with our bank group and expect to execute an amendment to our current credit facility that will keep us in compliance through the maturity of the credit agreement. The credit agreement matures on August 29, 2019, but we have the right to prepay the loan at any time without penalty.
Future Maturities (in thousands): |  |
2016 | $ | 26,250
2017 |  | 30,625
2018 |  | 35,000
2019 |  | 157,595
Total | $ | 249,470

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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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