FINANCING ARRANGEMENTS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCING ARRANGEMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCING ARRANGEMENTS |
NOTE L - FINANCING ARRANGEMENTS The Company did not have any outstanding debt obligations as of December 31, 2022 and 2021.
At December 31, 2022 and 2021, total deferred financing costs were $0.5 and $1.0 million, respectively. Amortized debt issuance costs is recorded in interest expense through maturity of the related debt using the straight-line method, which approximates the effective interest method. Amortization expense was as follows (in thousands):
$150.0 million Wells Fargo Senior Secured Revolving Credit Facility On July 20, 2018, AerSale Inc. and other subsidiary borrowers signatory thereto entered in a secured amended and restated Revolving Credit Agreement (as amended to date, the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement provides for a $110.0 million aggregate amount of revolver commitments subject to borrowing base limitations and a maturity date of July 20, 2021. On March 12, 2021, the Amended and Restated Credit Agreement was amended to, among other things, provide a $150.0 million aggregate amount of revolver commitments subject to borrowing base limitations and extend, subject to certain conditions, the maturity date to March 12, 2024. The Amended and Restated Credit Agreement includes a $10 million sub facility for letters of credit and for borrowings on same-day notice referred to as “swingline loans”. The maximum amount of such commitments available at any time for borrowings and letters of credit is determined according to a borrowing base calculation equal to the sum of eligible inventory and eligible accounts receivable reduced by the aggregate amount, if any, of trade payables of the loan parties, as defined in the Amended and Restated Credit Agreement. Extensions of credit under the Amended and Restated Credit Agreement are available for working capital and general corporate purposes. The commitments under the Amended and Restated Credit Agreement terminate on March 12, 2024, at which time all outstanding amounts on the Amended and Restated Credit Agreement will be due and payable. As of December 31, 2022 and 2021, there was no outstanding balance under the Amended and Restated Credit Agreement and at December 31, 2022 the Company had $106.8 million of availability. As of December 31, 2021, there was no outstanding balance under the Amended and Restated Credit Agreement and the Company had $113.9 million of availability. The obligations of the Borrowers under the Amended and Restated Credit Agreement are guaranteed by the Company, and other subsidiaries of AerSale, Inc. may be designated as borrowers on a joint and several basis. Such obligations are also secured by substantially all of the assets of the Company. The interest rate applicable to loans outstanding on the Amended and Restated Credit Agreement is a floating rate of interest per annum of LIBOR plus a margin of 3.50%. The interest rate as of December 31, 2022 and 2021 was 9.50% and 5.25%, respectively. The Company’s ability to borrow on the Amended and Restated Credit Agreement is subject to ongoing compliance by the Company and the borrowers with various customary affirmative and negative covenants. The Amended and Restated Credit Agreement requires the Company and borrowers to meet certain financial and nonfinancial covenants. The Company was in compliance with these covenants as of December 31, 2022 and 2021. Interest expense on the Revolving Credit Agreement was as follows (in thousands):
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