Note 7 - Notes Payable

12 Months Ended

Dec. 31, 2020

7.	Notes Payable

Notes payable consists of the following (in thousands, except percentages) as of:

							December 31,			December 31,
	Current			Long-term			2020			2019
Loan with CoBank, ACB (the “Credit Facility”); variable interest rate of 4.66% and 5.95% at December 31, 2020 and 2019, respectively. Interest is monthly and paid in arrears on the last business day of each month. The Credit Facility is secured by the total assets of the subsidiary guarantors. The unpaid balance is due November 3, 2022.	$	7,415		$	58,447		$	65,862		$	70,212

Debt issuance cost		(469	)		(353	)		(822	)		(1,111	)

Notes payable, net of debt issuance cost	$	6,946		$	58,094		$	65,040		$	69,101

Associated with the Credit Facility, the Company has

$2.3

million in deferred financing cost including

$212

thousand incurred during

first

quarter

2020.

The Company and its lender for the Credit Facility amended the agreement effective

December 31, 2019,

to change covenant measurements in recognition of the Company's plans for increased investment in fiber and other network improvements intended to increase broadband speeds for its customers. Amortization expense for the deferred financing cost associated with the Credit Facility was

$502

thousand,

$452

thousand and

$476

thousand for the years ended

December 31, 2020,

2019

and

2018,

respectively, which is included in interest expense.

The revolving credit facility associated with the Company's Credit Facility had a maximum borrowing capacity of

$5.0

million on

December 31, 2020.

The revolving credit facility is available until

November 3, 2022.

There was

balance outstanding as of

December 31, 2020

2019.

The Company pays a commitment fee at an initial rate of

0.50%

per annum, payable quarterly in arrears, on the unused portion of the revolver loan under the Credit Facility. The rate declined from

0.50%

per annum to

0.38%

per annum on

October 22, 2018.

The rate fluctuated up and down during the

twelve

months ended

December 31, 2020

from

0.38%

per annum for

one hundred

and

eighty-five

days to

0.50%

per annum for

one hundred

and

eighty

days. The commitment fee expense was

$23

thousand,

$19

thousand and

$24

thousand for the years ended

December 31, 2020,

2019

and

2018,

respectively.

Maturities of notes payable for the next

four

years, are as follows (in thousands):

2021	$	7,415
2022		58,447
2023		—
2024		—
Total	$	65,862

The Company's notes payable agreements are subject to certain financial covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. As of

December 31, 2020,

the Company was in compliance with all such covenants and restrictions.

OTELCO INC. 10-K