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CREDIT FACILITY AND ACQUISITION DEBT | 9 Months Ended
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Sep. 30, 2021
Debt Disclosure [Abstract] |
CREDIT FACILITY AND ACQUISITION DEBT | CREDIT FACILITY AND ACQUISITION DEBT At December 31, 2020, our senior secured revolving credit facility (the “Former Credit Facility”) was comprised of: (i) a $190.0 million revolving credit facility, including a $15.0 million subfacility for letters of credit and a $10.0 million swingline, and (ii) an accordion or incremental option allowing for future increases in the facility size by an additional amount of up to $75.0 million in the form of increased revolving commitments or incremental term loans. The final maturity of the Former Credit Facility was to occur on May 31, 2023. On May 13, 2021, in connection with the issuance of the New Senior Notes (defined in Note 11), we entered into an amended and restated $150.0 million senior secured revolving credit facility (the “New Credit Facility”) with the New Credit Facility Subsidiary Guarantors (as defined below), the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent. We incurred $0.8 million in transactions costs related to the New Credit Facility, which were capitalized and will be amortized over the remaining term of the related debt using the straight-line method. On May 13, 2021, we used approximately $21.4 million of the availability under the New Credit Facility to repay the then outstanding balances under our Former Credit Facility and all commitments thereunder were terminated. In connection with the repayment in full of all amounts due thereunder, the Former Credit Facility was retired and $2.1 million of letters of credit previously issued under the Former Credit Facility were deemed issued under (and remain outstanding under) the New Credit Facility. In connection with the termination of the Former Credit Facility, for the nine months ended September 30, 2021, we recognized a loss on the write-off of $0.1 million in unamortized debt issuance costs, which was recorded in Loss on extinguishment of debt. Our obligations under the New Credit Facility are unconditionally guaranteed on a joint and several basis by the same subsidiaries which guarantee the New Senior Notes and certain of our subsequently acquired or organized domestic subsidiaries (collectively, the “Subsidiary Guarantors”). The New Credit Facility allows for future increases in the facility size in the form of increased revolving commitments or new incremental term loans by an additional amount of up to $75.0 million in the aggregate. The final maturity of the New Credit Facility will occur on May 13, 2026. The New Credit Facility is secured by a first-priority perfected security interest in and lien on substantially all of the Company’s personal property assets and those of the Subsidiary Guarantors. In addition, the New Credit Facility includes provisions which require the Company and the Subsidiary Guarantors, upon the occurrence of an event of default or in the event the Company’s actual Total Leverage Ratio is not at least 0.25 less than the required Total Leverage Ratio covenant level under the New Credit Facility, to grant additional liens on real property assets accounting for no less than 50% of the Company’s and the Subsidiary Guarantors’ funeral operations if requested by the administrative agent. The New Credit Facility contains customary affirmative covenants, including, but not limited to, covenants with respect to the use of proceeds, payment of taxes and other obligations, continuation of the Company’s business and the maintenance of existing rights and privileges, the maintenance of property and insurance, amongst others. In addition, the New Credit Facility also contains customary negative covenants, including, but not limited to, covenants that restrict (subject to certain exceptions) the ability of the Company and the Subsidiary Guarantors to incur indebtedness, grant liens, make investments, engage in mergers and acquisitions, and pay dividends and other restricted payments, and certain financial maintenance covenants. At September 30, 2021, we were subject to the following financial covenants under our New Credit Facility: (A) a Total Leverage Ratio not to exceed 5.00 to 1.00 and (B) a Fixed Charge Coverage Ratio (as defined in the New Credit Facility) of not less than 1.20 to 1.00 as of the end of any period of four consecutive fiscal quarters. These financial maintenance covenants are calculated for the Company and its subsidiaries on a consolidated basis. We were in compliance with all of the covenants contained in our New Credit Facility as of September 30, 2021. Our Credit Facility and Acquisition debt consisted of the following (in thousands):
| December 31, 2020 |  | September 30, 2021
Credit Facility | $ | 47,200 |  |  | $ | 86,900 |
Debt issuance costs, net of accumulated amortization of $819 and $1,242, respectively | (1,136) |  |  | (1,482) |
Total Credit Facility | $ | 46,064 |  |  | $ | 85,418 |
Acquisition debt | $ | 5,509 |  |  | $ | 5,089 |
Less: current portion | (1,027) |  |  | (730) |
Total acquisition debt, net of current portion | $ | 4,482 |  |  | $ | 4,359 |
At September 30, 2021, we had outstanding borrowings under the New Credit Facility of $86.9 million. We also had one letter of credit for $2.1 million under the New Credit Facility, which was increased to $2.3 million on September 1, 2021. The letter of credit will expire on November 26, 2021 and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At September 30, 2021, we had $60.8 million of availability under the New Credit Facility. Outstanding borrowings under our New Credit Facility bear interest at either a prime rate or a LIBOR rate, plus an applicable margin based upon our leverage ratio. At September 30, 2021, the prime rate margin was equivalent to 0.75% and the LIBOR rate margin was 1.75%. The weighted average interest rate on our New Credit Facility was 2.0% and 2.5% for the three and nine months ended September 30, 2021, respectively. The weighted average interest rate on our Former Credit Facility was 3.9% and 4.0% for the three and nine months ended September 30, 2020, respectively. The interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
Credit Facility interest expense | $ | 828 |  |  | $ | 383 |  |  | $ | 3,164 |  |  | $ | 1,200 |
Credit Facility amortization of debt issuance costs | 118 |  |  | 80 |  |  | 363 |  |  | 297 |
Acquisition debt consists of deferred purchase price and promissory notes payable to sellers. A majority of the deferred purchase price and notes bear no interest and are discounted at imputed interest rates ranging from 7.3% to 10.0%. Original maturities range from five to twenty years. The imputed interest expense related to our acquisition debt is as follows (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
Acquisition debt imputed interest expense | $ | 122 |  |  | $ | 90 |  |  | $ | 373 |  |  | $ | 280 |

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