NOTE 6 – LONG-TERM DEBT, CAPITAL LEASES AND FINANCING OBLIGATIONS

Long-term debt, capital leases and financing obligations consist of the following:



	March 25,		March 26,
	2017		2016
	(Dollars in thousands)
Revolving Credit Facility, LIBOR-based (a)	$	182,297	$	103,315
Note payable, non-interest bearing, due in equal installments through September 2019		60		—
Less – Current portion of long-term debt		(20)		—
Long-term debt	$	182,337	$	103,315
Obligations under capital leases and financing obligations at various interest rates, due in installments through May 2045	$	228,444	$	176,974
Less – Current portion of capital leases and financing obligations		(15,278)		(11,244)
Long-term capital leases and financing obligations	$	213,166	$	165,730

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(a)

The London Interbank Offered Rate (LIBOR) at March 25, 2017 was .98%.

In January 2016, we entered into a new five-year $600 million Revolving Credit Facility agreement with nine banks (the “Credit Facility”). The Credit Facility replaced our previous revolving credit facility, as amended, which would have expired in December 2017. Interest only is payable monthly throughout the Credit Facility’s term. The Credit Facility increased our borrowing capacity from our prior financing agreement by $350 million to $600 million, and includes an accordion feature permitting us to request an increase in availability of up to an additional $100 million, an increase of $25 million from our prior revolving credit facility. The expanded facility bears interest at 75 to 175 basis points over LIBOR. The Credit Facility requires fees payable quarterly throughout the term between .15% and .35% of the amount of the average net availability under the Credit Facility during the preceding quarter. There was $182.3 million outstanding under the Credit Facility at March 25, 2017. We were in compliance with all debt covenants as of March 25, 2017.

At March 25, 2017 and March 26, 2016, the interest rate spread paid by the Company was 100 basis points over LIBOR.

Within the Credit Facility, we have a sub-facility of $80 million for the purpose of issuing standby letters of credit. The line requires fees aggregating 87.5 to 187.5 basis points over LIBOR annually of the face amount of each standby letter of credit, payable quarterly in arrears. There was $26.5 million in an outstanding letter of credit at March 25, 2017.

The net availability under the Credit Facility at March 25, 2017 was $391.2 million.

Specific terms of the Credit Facility permit the payment of cash dividends not to exceed 50% of the prior year’s net income, and permit mortgages and specific lease financing arrangements with other parties with certain limitations. Other specific terms and the maintenance of specified ratios are generally consistent with our prior financing agreement. Additionally, the Credit Facility is not secured by our real property, although we have agreed not to encumber our real property, with certain permissible exceptions.

Long-term debt had a carrying amount and a fair value of $182.4 million as of March 25, 2017, as compared to a carrying amount and a fair value of $103.3 million as of March 26, 2016. The fair value of long-term debt was estimated based on discounted cash flow analyses using either quoted market prices for the same or similar issues, or the current interest rates offered to Monro for debt with similar maturities.

In addition, we have financed certain store properties with capital leases/financing obligations, which amount to $228.4 million and are due in installments through May 2045. We also have a $.1 million payable to the seller of an acquired business at March 25, 2017, due in equal installments through September 2019.

Aggregate debt maturities over the next five years are as follows:



	Capital Leases/
	Financing Obligations
	Aggregate		Imputed		All Other
Year Ending Fiscal March	Amount		Interest		Debt		Total
	(Dollars in thousands)

2018	$	30,960	$	(15,682)	$	20	$	15,298
2019		31,487		(14,961)		20		16,546
2020		31,503		(13,908)		20		17,615
2021		32,173		(12,683)		182,297		201,787
2022		31,513		(11,293)				20,220