XML 71 R18.htm IDEA: XBRL DOCUMENT v3.19.3
Note 12 - Long-term Debt
 9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Debt Disclosure [Text Block]
NOTE
12.
   
LONG-TERM DEBT
 
On
August 12, 2019,
Link Media Holdings, Inc., (“Link”), a wholly owned subsidiary of Boston Omaha Corporation (“BOC”), which owns and operates BOC’s billboard businesses, entered into a Credit Agreement (the “Credit Agreement”) with First National Bank of Omaha (the “Lender”) under which Link
may
borrow up to
$40,000,000
(the “Credit Facility”). The Credit Agreement provides for an initial term loan (“Term Loan
1”
), an incremental term loan (“Term Loan
2”
) and a revolving line of credit. These loans are secured by all assets of Link and its operating subsidiaries, including a pledge of equity interests of each of Link’s subsidiaries. In addition, each of Link’s subsidiaries has joined as a guarantor to the obligations under the Credit Agreement. These loans are
not
guaranteed by BOC or any of BOC’s non-billboard businesses.
 
Principal amounts under each of Term Loan
1
and Term Loan
2
are payable in monthly installments according to either a
15
-year or
25
-year amortization schedule at Link’s option. For Term Loan
1,
these payments are due commencing on the earlier of
July 1, 2020
or the
first
day of the
first
calendar month following any draw down under Term Loan
2.
For Term Loan
2,
these principal payments are due commencing on the last day of the month following the closing of Term Loan
2.
Both term loans are payable in full on
August 12, 2026. 
Term Loan
1
has a fixed interest rate of
4.25%
per annum with interest only payments due through
July 1, 2020.
Term Loan
2
has a loan availability in an amount
not
to exceed
three
times
2019
reported EBITDA reduced by the loan principal under Term Loan
1
and must be drawn before
June 30, 2020.
If utilized, Term Loan
2
will have a fixed rate of interest determined using the
seven
-year Treasury rate plus
195
basis points subject to a floor of 
4.20%
per annum.
 
The revolving line of credit loan facility has a
$5,000,000
maximum availability, provided that the outstanding principal balance of Term Loan
1,
Term Loan
2
and this revolving line of credit
may
not
exceed
$40,000,000.
Interest payments are based on the
30
day LIBOR rate plus an applicable margin ranging between
2.00
and
2.50%
dependent on Link’s consolidated leverage ratio. The revolving line of credit is due and payable on
August 11, 2021.
 
Long-term debt included within our consolidated balance sheet as of
September 30, 2019
consists of Term Loan
1
borrowings of
$18,060,000,
of which
$287,139
is classified as current.  There were
no
amounts outstanding related to the revolving line of credit and Term Loan
2
as of
September 30, 2019.  
 
During the term of the Credit Facility, Link is required to comply with the following financial covenants: A consolidated leverage ratio for any test period ending on the last day of any fiscal quarter of Link (a) beginning with the fiscal quarter ending
December 31, 2019
of greater than
3.50
to
1.00,
(b) beginning with the fiscal quarter ending
December 31, 2020
of greater than
3.25
to
1.00,
and (c) beginning with the fiscal quarter ending
December 31, 2021
and thereafter, of greater than
3.00
to
1.0;
minimum consolidated fixed charge coverage ratio of
not
less than
1.15
to
1.00
measured quarterly, based on rolling
four
quarters, with testing to commence as of
December 31, 2019
based on the
December 31, 2019
audited financial statements.
 
The Credit Agreement includes representations and warranties, reporting covenants, affirmative covenants, negative covenants, financial covenants and events of default customary for financings of this type. Upon the occurrence of an event of default the Lender
may
accelerate the loans. Upon the occurrence of certain insolvency and bankruptcy events of default the loans will automatically accelerate.