Quarterly report pursuant to Section 13 or 15(d)

LONG-TERM DEBT

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LONG-TERM DEBT
 9 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
LONG-TERM DEBT
LONG-TERM DEBT
 
Long-term debt consists of the following (in thousands):
 
September 30,
2015
 
December 31,
2014
 
(Unaudited)
 
 
Long-term debt, net of current portion:
 
 
 
First Term Loan, maturing October 1, 2016 (as amended); quarterly payments of $1.5 million beginning October 1, 2015; interest payable monthly at a variable rate which averaged 4.75% for both periods presented
$
47,500

 
$
38,631

Revolving Loan, maturing October 1, 2016 (as amended), interest payable monthly at a variable rate which averaged 4.75% for both periods presented
500

 
2,000

Second Term Loan, maturing April 1, 2017, interest payable monthly at 14.25% per annum (13.25% prior to July 18, 2014)
20,000

 
20,000

Less current portion
(6,000
)
 
(1,337
)
 
$
62,000

 
$
59,294



First and Second Lien Credit Facilities. The First Lien Credit Facility, including the Revolving Loan, and Second Lien Credit Facility are secured by substantially all of our assets. Our principal wholly-owned subsidiaries, except for FHR-Colorado LLC which was recently formed to acquire Bronco Billy's, guarantee our obligations under the agreements. As of September 30, 2015, commensurate with the completion of the hotel at Silver Slipper Casino, we had drawn all of the proceeds of the $10 million construction term loan under the First Lien Credit Facility. The final costs related to the construction are still being resolved, hence approximately $569,000 of those proceeds remains in a trust account and will be used to fund a portion of the remaining construction costs.

Effective May 31, 2015, the Company entered into a Fourth Amendment to the First Lien Credit Facility which amended certain provisions of the First Lien Credit Agreement, including (i) extending the period for draws against the $10 million term loan associated with the hotel construction at Silver Slipper Casino and Hotel to August 31, 2015, and (ii) extending the date that the first quarterly payment of $0.25 million was due for this portion of the term loan to October 1, 2015.

On August 5, 2015 and effective as of June 30, 2015, we entered into the Fifth Amendment to the First Lien Credit Facility and Amendment No. 4 to the Second Lien Credit Facility which, amongst other items:

•
Revised certain financial covenant ratios as of June 30, 2015, and going forward through the term of the loans;
•
Extended the maturity date for the First Lien Credit Facility from June 29, 2016 to October 1, 2016;
•
Created a pricing grid to allow the interest rate on the Second Lien Credit Facility to vary with changes in our leverage; and
•
Amended the prepayment premium on the Second Lien Credit Facility.

The First and Second Lien Credit Facilities continue to contain customary restrictive covenants, including a maximum total leverage ratio, maximum first lien leverage ratio, and a fixed charge coverage ratio. These revised financial covenant ratios are as follows:

First Lien Credit Facility
 
 
Applicable Period
 
Maximum
Total Leverage
Ratio
 
Maximum
First Lien Leverage Ratio
 
Minimum
Fixed Charge Coverage Ratio
June 30, 2015 through and including September 29, 2015
 
6.85x
 
4.85x
 
1.10x
September 30, 2015 through and including December 30, 2015
 
6.75x
 
4.75x
 
1.10x
December 31, 2015 through and including March 30, 2016
 
6.35x
 
4.35x
 
1.10x
March 31, 2016 through and including June 29, 2016
 
6.15x
 
4.15x
 
1.10x
June 30, 2016 through and including September 29, 2016
 
5.85x
 
4.00x
 
1.10x
September 30, 2016 and thereafter
 
5.50x
 
3.75x
 
1.10x

Second Lien Credit Facility
 
 
Applicable Period
 
Maximum
Total Leverage
Ratio
 
Maximum
First Lien Leverage Ratio
 
Minimum
Fixed Charge Coverage Ratio
June 30, 2015 through and including September 29, 2015
 
7.10x
 
5.10x
 
1.00x
September 30, 2015 through and including December 30, 2015
 
7.00x
 
5.00x
 
1.00x
December 31, 2015 through and including March 30, 2016
 
6.60x
 
4.60x
 
1.00x
March 31, 2016 through and including June 29, 2016
 
6.40x
 
4.40x
 
1.00x
June 30, 2016 through and including September 29, 2016
 
6.10x
 
4.25x
 
1.00x
September 30, 2016 and thereafter
 
5.75x
 
4.00x
 
1.00x


We were in compliance with our covenants, as amended, as of September 30, 2015. There can be no assurances that we will remain in compliance with all covenants in all future periods or, if there is a breach, that lenders will waive such breach.

We have elected to pay interest on the First Lien Credit Facility based on the greater of the elected London Interbank Offered Rate (“LIBOR”) rate or 1.0%, plus a margin rate. As of September 30, 2015, the interest rate was 4.75% on the balance outstanding on the First Lien Credit Facility, based on the 1.0% minimum plus a 3.75% margin. In accordance with the terms of the First Lien Credit Facility, we maintain a prepaid interest rate cap for a notional amount of $14.75 million at a LIBOR cap rate of 1.5%, which terminates on June 29, 2016.