raised through equity offerings subsequent to December 31, 2020. As of June 30, 2022, management believed it complied with all of the financial and non-financial covenants contained in the Credit Facility.
On August 1, 2022, the Company entered into an amendment to the Credit Facility, that, among other things: (i) added a new $150 million delayed-draw term loan, which matures on February 1, 2028; (ii) extended the maturity date of the Revolver from May 2025 to August 2026; and (iii) transitioned all LIBOR-based loans under the Credit Facility to SOFR-based loans. See Note 10 – “Subsequent Events” for additional information regarding the amendment to the Credit Facility.
The Company has entered into interest rate swaps to hedge its interest rate risk on the Term Loan and the new $150 million delayed-draw term loan. For additional information related to the interest rate swaps, see the “Derivative Instruments - Interest Rate Swaps” section herein.
During the six months ended June 30, 2022, the Company borrowed $92,500 under the Credit Facility and repaid $5,000, for a net amount borrowed of $87,500. During the six months ended June 30, 2021, the Company borrowed $133,100 under the Credit Facility and repaid $207,200 for a net amount repaid of $74,100. Interest expense incurred on the Credit Facility was $4,208 and $7,822 for the three and six months ended June 30, 2022, respectively, and $3,749 and $7,601 for the three and six months ended June 30, 2021, respectively.
As of June 30, 2022 and December 31, 2021, the Company had the following outstanding borrowings under the Credit Facility:
| | | | | | |
| | June 30, 2022 | | December 31, 2021 |
Revolver | | $ | 260,100 | | $ | 172,600 |
Term Loan | | | 350,000 | | | 350,000 |
Less: Unamortized debt issuance costs | | | (7,113) | | | (8,033) |
Credit Facility, net | | $ | 602,987 | | $ | 514,567 |
Costs incurred related to the Credit Facility, net of accumulated amortization, are netted against the Company’s “Credit Facility, net of unamortized debt issuance costs” balance in the accompanying Condensed Consolidated Balance Sheets. The Company paid $7 and $6,177 related to amendments and modifications to the Credit Facility during the six months ended June 30, 2022 and 2021, respectively. Amortization expense incurred was $464 and $927 for the three and six months ended June 30, 2022, respectively, and $427 and $776 for the three and six months ended June 30, 2021, respectively, and is included in the “Interest Expense” line item in the accompanying Condensed Consolidated Statements of Operations.
Reference Rate Reform
On March 5, 2021, the Financial Conduct Authority (“FCA”) announced that USD LIBOR will no longer be published after June 30, 2023. This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to the Secured Overnight Financing Rate (“SOFR”). Additionally, as of December 31, 2021, banks have ceased issuance of any new LIBOR debt.
The Company anticipates that LIBOR will continue to be available at least until June 30, 2023, and, as of June 30, 2022, was in discussions with its lending institutions to amend the Credit Facility to, among other things, transition all of its LIBOR-based loans under the Credit Facility to SOFR-based loans.
The Company has interest rate swaps that are indexed to LIBOR and is monitoring and evaluating the related risks. These risks arise in connection with transitioning contracts to an alternative rate, including any resulting value transfer that may occur, and are likely to vary by contract. The value of loans, securities, or derivative instruments tied to LIBOR may also be impacted if LIBOR is limited or discontinued. For some instruments the method of transitioning to an alternative reference rate may be challenging, especially if the Company cannot agree with the respective counterparty about how to make the transition.
While the Company expects LIBOR to be available in substantially its current form until at least June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate would be accelerated and magnified.
