Quarterly report pursuant to Section 13 or 15(d)

Financing Arrangements

v3.19.3
Financing Arrangements
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Financing Arrangements
Financing Arrangements

A summary of our borrowings as of September 30, 2019 and December 31, 2018 is set forth below (in thousands):
 
September 30, 2019
 
December 31, 2018
Senior secured term loan facility, due January 2023(+)
$
507,393

 
$
478,125

Senior secured revolving credit facility, due January 2022(+)(1)
21,015

 
54,015

Convertible senior notes due 2035(2)
82,500

 
82,500

Second Lien Notes, due June 2023(3)
178,034

 
158,450

Other debts(4)
26,792

 
1,707

Unamortized bond discounts, fair value adjustments and issue costs, net
(62,884
)
 
(65,186
)
Total carrying value of debt
752,850

 
709,611

Less: current portion, net
(16,533
)
 
(22,673
)
Total non-current
$
736,317

 
$
686,938

(+) This facility is a component of the 2017 Credit Agreement (as defined below).
(1) As of September 30, 2019, the available balance under our $85.0 million revolving credit facility is $58.9 million (net of outstanding letters of credit). The 2017 Credit Agreement provides for the issuance of letters of credit in the amount equal to the lesser of $15.0 million and the aggregate amount of the then-remaining revolving loan commitment. As of September 30, 2019, we had outstanding letters of credit of $5.1 million under the 2017 Credit Agreement. We expect to draw on the loans under our revolving credit facility (the “2017 Revolving Loans”) from time to time to fund our working capital needs and for other general corporate purposes.
(2) The principal amount outstanding of the 2.75% convertible senior notes due 2035 (the “Convertible Notes”) as set forth in the foregoing table was $82.5 million as of September 30, 2019. The carrying amount, net of debt issuance costs and associated discount, was $70.9 million and $70.4 million as of September 30, 2019 and December 31, 2018, respectively.
(3) The principal amount outstanding of the second lien notes due June 30, 2023 (the “Second Lien Notes”) as set forth in the foregoing table was $178.0 million as of September 30, 2019. The carrying amount, net of debt issuance costs and associated discount, was $149.1 million and $128.2 million as of September 30, 2019 and December 31, 2018, respectively, and it includes approximately $28.0 million of PIK interest converted to principal since issuance. The value allocated to the attached penny warrants and market warrants for financial reporting purposes was $14.9 million and $9.3 million, respectively. These qualify for classification in stockholders’ equity and are included in the condensed consolidated balance sheets within “Additional paid-in capital”.
(4) As of September 30, 2019, Other debts primarily consisted of (i) $6.2 million remaining financed amount for transponder purchases (payable in staggered dates until April 2020); and (ii) $18.9 million of finance lease liability relating to an assessed right-of-use over a satellite bandwidth capacity (refer to Note 3. Leases for further details).

On July 19, 2019, the Company entered into an amendment of its senior secured credit agreement (“2017 Credit Agreement”) and security agreement (the “2017 Credit Agreement Amendment”), which, among other things, increased the borrowing capacity of the existing senior secured term loan due in 2023 (the “Term Loan”) by $40.0 million, reduced scheduled principal repayments over the next six quarters by an aggregate amount of approximately $25.3 million and provided additional stock pledges (including the remaining 35% of the equity interests of first-tier foreign subsidiaries that was previously not pledged) as collateral. As of September 30, 2019, approximately 75% of our total consolidated assets are subject to lien under this 2017 Credit Agreement Amendment.

In relation to the 2017 Credit Agreement Amendment, we incurred total issuance costs of $3.5 million, of which $1.6 million was assessed to be eligible for capitalization and will be amortized over the remaining term of the 2017 Credit Agreement. The remaining $1.9 million was immediately recognized as expense during the quarter ended September 30, 2019. Net of fees and expenses, the 2017 Credit Agreement Amendment is expected to result in approximately $60 million of incremental liquidity until the end of 2020.

Concurrently with entering into the 2017 Credit Agreement Amendment, the Company also entered into a second amendment to the securities purchase agreement and amendment to security agreement (the “Second Lien Amendment”) relating to the Second Lien Notes, which, among other things, removed the ability to make any cash interest payments under the Second Lien Notes so long as such payments are prohibited by the terms of the 2017 Credit Agreement, added collateral for the Second Lien Notes consistent with the additional collateral provided under the 2017 Credit Agreement and modified the prepayment premium schedule to extend through maturity of the Second Lien Notes.


The aggregate contractual maturities of all borrowings subsequent to September 30, 2019, factoring in the amendment to its term loan, are as follows (in thousands):
Years Ending December 31,
Amount
2019 (remaining three months)
$
7,056

2020
30,075

2021
27,172

2022
48,187

2023
620,353

Thereafter
82,891

Total
$
815,734