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DEBT OBLIGATIONS | 12 Months Ended
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Dec. 31, 2018
DEBT OBLIGATIONS |
DEBT OBLIGATIONS | 7. DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands):
|  | December 31, |  | December 31,
|  | 2018 |  | 2017
Current Borrowings |  |  |  |  |  |
China Credit Facility (5.3% at December 31, 2018) |  | $ | — |  | $ | 461
Current borrowings |  | $ | — |  | $ | 461
Long-term Debt |  |  |  |  |  |
Revolving Credit Facility, long-term (1) |  | $ | 123,010 |  | $ | 53,266
Unamortized debt issuance costs |  |  | (494) |  |  | (572)
Long-term debt |  | $ | 122,516 |  | $ | 52,694
| (1) |  | The effective rate of the Revolving Credit Facility is 3.47% at December 31, 2018.
Senior Secured Revolving Credit Facility On October 28, 2016, the Company entered into a Credit Agreement (the “Credit Agreement”) for a $125,000 revolving credit facility (the “Revolving Facility”). The Revolving Facility includes a $50,000 accordion amount and has an initial term of five years. HSBC Bank USA, National Association is the administrative agent, HSBC Securities (USA) Inc. is the sole lead arranger and sole book runner, and Keybank National Association and Wells Fargo Bank, National Association are co-syndication agents. On December 6, 2018, the Company and certain of its subsidiaries entered into a Second Amendment to Credit Agreement to exercise the $50 million accordion feature of its existing senior secured revolving credit facility and to add TCI as an additional guarantor. The Company’s credit facility, which matures in October 2021, increased capacity from $125 million to $175 million with the additional borrowing capacity being provided by the existing lenders. Other terms and conditions under the credit facility remain unchanged. Borrowings under the Revolving Facility bear interest at the LIBOR Rate (as defined in the Credit Agreement) plus a margin of 1.00% to 2.25% or the Prime Rate (as defined in the Credit Agreement) plus a margin of 0% to 1.25%, in each case depending on the Company’s ratio of total funded indebtedness (as defined in the Credit Agreement) to Consolidated trailing twelve-month EBITDA (the “Total Leverage Ratio”). At December 31, 2018, the applicable margin for LIBOR Rate borrowings was 1.25% and the applicable margin for Prime Rate borrowings was 0.50%. In addition, the Company is required to pay a commitment fee of between 0.10% and 0.25% quarterly (currently 0.125%) on the unused portion of the Revolving facility, also based on the Company’s Total Leverage Ratio. The Revolving Facility is secured by substantially all of the Company’s non-realty assets and is fully and unconditionally guaranteed by certain of the Company’s subsidiaries. Financial covenants under the Credit Agreement require the Company to maintain a minimum interest coverage ratio (based on trailing twelve-month EBITDA) of at least 3.0:1.0 at the end of each fiscal quarter. As provided under the Credit Agreement, the Company elected to temporarily increase the Total Leverage Ratio by 0.5x over the otherwise maximum during the twelve-month period following the TCI acquisition. In addition to the minimum interest coverage ratio, the Company’s Total Leverage Ratio at the end of any fiscal quarter shall not be greater than 3.5:1.0 through December 31, 2019, 3.25:1.0 through June 30, 2020 and 3.0:1.0 thereafter. The Credit Agreement also includes covenants and restrictions that limit the Company’s ability to incur additional indebtedness, merge, consolidate or sell all or substantially all its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the Credit Agreement, to which reference is made for a complete statement of the covenants, are subject to certain exceptions. The Company was in compliance with all covenants at December 31, 2018. The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, if any representation or warranty made by the Company is false or misleading in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, the occurrence of certain ERISA events, the invalidity of the loan documents or a change in control of the Company. The amounts outstanding under the Revolving Facility may be accelerated upon certain events of default. Other The China Facility provides credit of approximately $1,454 (Chinese Renminbi (“RMB”) 10,000). The China Facility is used for working capital and capital equipment needs at the Company’s China operations, and the lender may demand payment at any time. The average balance for 2018 was $345 (RMB 2,250). At December 31, 2018, there was approximately $1,454 (RMB 10,000) available under the facility. Deferred Financing Fees In connection with the Senior Secured Credit Facility, the Company incurred $745 of deferred financing costs in 2016. These costs offset long-term debt in the consolidated balance sheets. The costs are deferred and amortized over a five-year term. Amortization of these costs is charged to interest expense in the accompanying consolidated statements of income and comprehensive income using the straight-line method. Deferred financing fees for the previous credit agreement of $1,052 were written off to interest expense in 2016. In conjunction with the second amendment to the credit agreement, the Company incurred $72 of deferred financing costs. The costs are deferred and will be amortized over the remaining three-year term of the original agreement beginning in January 2019. Deferred financing costs net of accumulated amortization were $494 as of December 31, 2018.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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