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- seeking additional capital;
- selling assets; or
- restructuring or refinancing our indebtedness.
if we adopt an alternative strategy, the strategy may not be successful and we may continue to be unable to service our indebtedness and fund our operations.
We may not be able to refinance our indebtedness on favorable terms, if at all. Our inability to refinance
our indebtedness, including the New Notes, could materially and adversely affect our liquidity and our ongoing results of operations.
Our ability to refinance indebtedness will depend in part on our operating and financial performance, which, in turn, is subject to prevailing
economic conditions and to financial, business, legislative, regulatory and other factors beyond our control. In addition, prevailing interest rates or other factors at the time of refinancing could
increase our interest expense. A refinancing of our indebtedness could also require us to comply with more onerous covenants and further restrict our business operations. Our inability to refinance
our indebtedness or to do so upon attractive terms could materially and adversely affect our business, prospects, results of operations, financial condition and cash flows, and make us vulnerable to
adverse industry and general economic conditions.
We may be able to incur substantially more debt and take other actions that could diminish our ability to
make payments on our indebtedness, including the New Notes, when due, which could further exacerbate the risks associated with our current level of indebtedness.
Despite our indebtedness level, we may be able to incur substantially more indebtedness in the future and such indebtedness may be secured
indebtedness. The terms of the indenture governing the New Notes do not prohibit us from incurring unsecured debt and the limitation on incurring secured debt is subject to important limitations,
qualifications and exceptions. The indentures or agreements governing our current indebtedness permit us to recapitalize our debt or take a number of other actions, any of which could diminish our
ability to make payments on our indebtedness when due and further exacerbate the risks associated with our current level of indebtedness. If new debt is added to our or any of our existing and future
subsidiaries' current debt, the related risks that we now face could intensify and we may not be able to meet all our debt obligations, including repayment of the New Notes in whole or in part. If we
incur any secured debt it will be effectively senior to the New Notes to the extent of the value of the collateral securing such debt and if we incur any additional indebtedness that ranks equally
with the New Notes, the holders of that debt will be entitled to share ratably with the holders of the New Notes in any proceeds distributed in connection with any insolvency, liquidation,
reorganization, dissolution or other winding up of our business.
If we are unable to satisfy the financial and other covenants in certain of our debt agreements, our lenders
could elect to terminate the agreements and require us to repay the outstanding borrowings, or we could face other substantial costs.
The only financial covenant that currently exists under the ABL Facility is the fixed charge coverage ratio. Subject to certain limited
exceptions specified in the ABL Facility, the fixed charge coverage ratio covenant under the ABL Facility will only apply in the future if specified availability under the ABL Facility falls below
10 percent of the maximum revolver amount under the ABL Facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL Facility size may
be included when calculating specified availability under the ABL Facility. As of December 31, 2016, specified availability under the ABL Facility exceeded the required threshold and, as a
result, the maintenance covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating