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1998
Credit Facility
On
December
22,
1998,
EMCOR
and
certain
of
its
subsidiaries
amended
and
restated
the
June
19,
1996
credit
facility;
the
amended
credit
facility
provides
EMCOR
with
a
credit
facility
for
borrowings
of
up
to
$150.0
million.
The
amended
credit
facility,
which
has
an
expiration
date
of
June
30,
2002,
is
guaranteed
by
certain
direct
and
indirect
subsidiaries
of
EMCOR.
It
is
secured
by
substantially
all
of
the
assets
of
EMCOR
and
those
subsidiaries,
and
it
provides
for
borrowing
capacity
available
in
the
form
of
revolving
loans
and/or
letters
of
credit.
The
revolving
loans
bear
interest
at
(1)
a
rate
which
is
the
prime
commercial
lending
rate
announced
by
Harris
Trust
and
Savings
Bank
from
time
to
time
(8.5%
at
December
31,
1999)
plus
0%
to
0.5%,
based
on
certain
financial
tests
or
(2)
at
a
LIBOR
rate
(6.0%
at
December
31,
1999)
plus
1.25%
to
2.0%
based
on
certain
financial
tests.
The
interest
rates
in
effect
at
December
31,
1999
were
8.5%
and
7.25%,
respectively.
Letters
of
credit
fees
issued
under
the
credit
facility
ranging
from
0.5%
to
2.0%
are
charged
based
on
type
of
letters
of
credit
issued
and
certain
financial
tests.
As
of
December
31,
1999
and
1998,
EMCOR
had
approximately
$17.4
million
and
$30.2
million of letters of credit outstanding, respectively. No revolving
loans were outstanding under the 1998 Credit Facility at December
31, 1999 and 1998.
1996
Credit Facility
On
June
19,
1996,
EMCOR
and
its
subsidiary
Dyn
Specialty
Contracting,
Inc.
entered
into
a
credit
agreement
with
Harris
Trust
and
Savings
Bank
providing
EMCOR
with
a
working
capital
credit
facility
for
borrowings
up
to
$100.0
million
for
a
three-year
period.
This
agreement
was
amended
and
restated
on
December
22,
1998.
Foreign
Borrowings
In
October
1997,
EMCOR’s
Canadian
subsidiary,
Comstock
Canada
Ltd.,
renewed
a
credit
agreement
with
a
bank
providing
for
an
overdraft
facility
of
up
to
Cdn.
$0.5
million.
The
facility
is
secured
by
a
standby
letter
of
credit
and
provides
for
interest
at
the
bank’s
prime
rate
(6.5%
at
December
31,
1999).
There
were
no
borrowings
outstanding
under
this
facility
at
December
31,
1999
and
1998.
The
Canadian
subsidiary
may
utilize
EMCOR’s
1998
credit
facility
for
any
future
working
capital
requirements.
Long-term
debt in the accompanying Consolidated Balance Sheets consisted of
the following amounts as of December 31, 1999 and 1998 (in thousands):
Convertible
Subordinated Notes
On
March
18,
1998,
EMCOR
sold,
pursuant
to
an
underwritten
public
offering,
$100.0
million
principal
amount
of
5.75%
Convertible
Subordinated
Notes
(“Subordinated
Notes”).
On
March
24,
1998,
the
underwriter
of
the
Subordinated
Notes
offering
exercised
in
full
its
over-allotment
option
to
purchase
an
additional
$15.0
million
of
Subordinated
Notes,
and
accordingly,
Subordinated
Notes
in
the
additional
principal
amount
of
$15.0
million
were
issued.
The
Subordinated
Notes
will
mature
on
April
1,
2005
and
are
general,
unsecured
obligations
of
EMCOR,
subordinated
in
right
to
all
existing
and
future
Senior
Indebtedness
(as
defined
in
the
indenture
pursuant
to
which
Subordinated
Notes
were
issued
(the
“Subordinated
Indenture”)
of
EMCOR.
The
Subordinated Indenture does not contain any financial covenants
or any restrictions on the payment of dividends, the repurchase
of securities of EMCOR or the incurrence of Indebtedness (as defined
in the Subordinated Indenture) or Senior Indebtedness. Holders of
the Subordinated Notes have the right at any time to convert the
Subordinated Notes into Common Stock of EMCOR at a conversion price
of $27.34 per share.
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