Aarons 2015 Annual Report Download - page 74

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
Following is a summary of the Company’s debt at December 31:
 

DAMI Credit Facility $41,781
$ —
Revolving Facility 75,000
69,116
Senior Unsecured Notes, 3.95%, Due in Installments through April 2018 75,000
100,000
Term Loan, Due in Installments through December 2019 109,375
121,875
Senior Unsecured Notes, 4.75%, Due in Installments through April 2021 300,000
300,000
Capital Lease Obligation:
with Related Parties 4,703
6,157
with Unrelated Parties 4,591
5,684
Other Debt —
3,250
$ 610,450
$ 606,082
DAMI Credit Facility
In connection with the October 15, 2015 acquisition of DAMI, the Company assumed the loan and security agreement, dated as of May 18, 2011 (as
amended), which provides for a secured revolving credit facility in an amount not to exceed $85.0 million in outstanding principal balance, including a letter
of credit not to exceed $2.0 million (the "DAMI credit facility"). In addition, the loan and security agreement includes an uncommitted incremental facility
increase option (an "accordion facility") which, subject to certain terms and conditions, permits DAMI at any time prior to the maturity date to request an
increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $25.0 million.
The DAMI credit facility is currently set to mature on the second anniversary of the DAMI acquisition and contains representations, warranties and covenants
consistent with those of other facilities of similar size and type. Collateral under the loan and security agreement is limited to the assets and operations of
DAMI.
Borrowings bear interest at one-month LIBOR plus 4%. The interest rate for secured revolving credit borrowings as of December 31, 2015 was 4.24%. As of
December 31, 2015, $7.3 million was available for borrowing under the DAMI credit facility.
The DAMI credit facility includes financial covenants that, among other things, require DAMI to maintain (i) an EBITDA ratio of not less than 1.7 to 1.0 and
(ii) a senior debt to capital base ratio of not more than 2.0 to 1.0. We are in compliance with these covenants at December 31, 2015. Furthermore, the DAMI
credit facility restricts DAMI's ability to transfer funds by limiting intercompany dividends to an amount not to exceed the amount of capital the Company
has invested in DAMI. The aggregate amount of such dividends made in a calendar year are limited to 75% of DAMI's net income for the immediately
preceding calendar year.
DAMI pays a non-refundable monthly unused line fee on the line of credit which ranges from .5% to .75% as determined by DAMI's average daily unused
commitments.
Revolving Credit Agreement and Term Loan
The revolving credit and term loan agreement, which expires December 9, 2019, permits the Company to borrow, subject to certain terms and conditions, on
an unsecured basis up to $225.0 million in revolving loans. The revolving credit and term loan agreement also provides for an accordion facility that permits
the Company at any time prior to the maturity date to request an increase in credit extensions thereunder (whether through additional term loans and/or
revolving credit commitments or any combination thereof) by an aggregate additional principal amount of up to $200.0 million, with such additional credit
extensions provided by one or more lenders thereunder at their sole discretion.
The revolving credit borrowings and term loans bear interest at the lower of the lender's prime rate or one-month LIBOR plus a margin ranging from 1.75% to
2.25% as determined by the Company's ratio of total debt to EBITDA, and interest is payable quarterly. The weighted-average interest rate for revolving
credit borrowings and term loans outstanding as of December 31, 2015 was approximately 2.24%. For the term loan facility, as amended, installment
payments of $3.1 million commenced on December 31, 2014 and are due quarterly, with the remaining unpaid principal balance due at maturity on
December 9, 2019.
The Company pays a commitment fee on unused balances, which ranges from .15% to .30% as determined by the Company's ratio of total debt to EBITDA.
As of December 31, 2015, $150.0 million was available for borrowings under the revolving credit agreement.
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