LINE OF CREDIT |
12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||
| LINE OF CREDIT |
LINE OF CREDIT
We have a credit agreement with Whitney Bank and JPMorgan Chase Bank N.A. that provides for an $40.0 million revolving credit facility, which was amended and restated on December 16, 2016. The amended and restated credit facility: (i) is secured by substantially all of our assets (other than real estate); (ii) extends the term of the facility from January 2, 2017 to November 29, 2018; (iii) reduces the borrowing base from $80.0 million to $40.0 million; and (iv) permits the full borrowing base to be used for issuing letters of credit and/or general corporate and working capital purposes. Under the prior facility, only $20.0 million of the $80.0 million borrowing base could be used for general corporate and working capital purposes. Given the historically low levels of borrowings under our prior credit facility and our cash position, we requested a reduction in the amount of available credit under the facility from $80.0 million to $40.0 million during negotiations with the lenders to decrease the commitment fees payable on the undrawn portion of the facility. We must comply with the following financial covenants each quarter beginning with the quarter ending December 31, 2016:
(iii) interest coverage ratio not less than 2.0 to 1.0.
The annual interest rates applicable to amounts outstanding under the amended and restated credit facility continue to remain, at the Company’s option, at either (i) a prime rate established by JPMorgan Chase Bank, N.A., or (ii) a LIBOR rate (defined in the amended and restated credit agreement) plus 2.0% per annum. In addition, the commitment fee on the undrawn portion of the facility and the letter of credit fee on undrawn stated amounts under letters of credit issued by the lenders remain at 0.50% per annum and 2.0% per annum, respectively. At December 31, 2016 we had no outstanding borrowings under the credit agreement, and we had outstanding letters of credit totaling $7.7 million. After consideration of outstanding letters of credit, the availability of the unused portion of the revolving credit agreement (as amended) for additional letters of credit and for general corporate purposes was $32.3 million. We were in compliance with our covenants at December 31, 2016.
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