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DEBT | 12 Months Ended
--- | ---
Dec. 31, 2015
Debt Disclosure [Abstract] |
DEBT |
27. | DEBT
(in thousands of $) | 2015 |  |  | 2014 |
Total long-term and short-term debt | 1,878,061 |  |  | 1,380,787 |
Less: current portion of long-term debt and short-term debt | (501,618 | ) |  | (116,431 | )
Long-term debt | 1,376,443 |  |  | 1,264,356 |
The outstanding debt as of December 31, 2015 is repayable as follows:
Year ending December 31 |
(in thousands of $) |
2016 | 501,618 |
2017 | 386,008 |
2018 | 94,968 |
2019 | 145,968 |
2020 | 124,126 |
2021 and thereafter | 625,373 |
Total | 1,878,061 |
Our debt is denominated in U.S. dollars and bears floating interest rates. The weighted average interest rate for the years ended December 31, 2015 and 2014 was 3.50% and 3.35%, respectively. At December 31, 2015 and 2014, our debt was as follows:
(in thousands of $) | 2015 |  |  | 2014 |  |  | Maturity date
Golar Arctic facility | 80,200 |  |  | 87,500 |  |  | 2019
Golar Viking facility | — |  |  | 82,000 |  |  | 2017
Golar Viking (2015) | 62,500 |  |  | — |  |  | 2020
Convertible bonds | 243,369 |  |  | 238,037 |  |  | 2017
GoFLNG Hilli facility | 50,000 |  |  | — |  |  | 2017
Hilli shareholder loans: |  |  |  |  |
- Keppel loan | 44,066 |  |  | 35,572 |  |  | 2027
- B&V loan | 5,000 |  |  | 5,000 |  |  | 2027
$1.125 billion facility: |  |  |  |  |
- Golar Seal facility | 106,612 |  |  | 117,273 |  |  | 2018/2025*
- Golar Celsius facility | 107,020 |  |  | 117,721 |  |  | 2018/2025*
- Golar Crystal facility | 111,941 |  |  | 122,602 |  |  | 2019/2026*
- Golar Penguin facility | 118,144 |  |  | 128,885 |  |  | 2019/2026*
- Golar Bear facility | 118,524 |  |  | 129,299 |  |  | 2019/2026*
- Golar Frost facility | 120,357 |  |  | 131,298 |  |  | 2019/2026*
Subtotal | 1,167,733 |  |  | 1,195,187 |  |  |
ICBC VIE loans: |  |  |  |  |
- Golar Glacier facility | 177,176 |  |  | 185,600 |  |  | 2016/2024**
- Golar Snow facility | 178,566 |  |  | — |  |  | 2016/2025**
- Golar Kelvin facility | 182,540 |  |  | — |  |  | **
- Golar Ice facility | 172,046 |  |  | — |  |  | **
Total debt | 1,878,061 |  |  | 1,380,787 |  |  |
* The commercial loan tranche matures earlier of the two dates, with the remaining balancing maturing at the latter date. ** This represents the total loan facilities drawn down by subsidiaries of ICBC which we consider as VIEs. We determined that we are the primary beneficiary of these VIEs, as we are expected to absorb the majority of the VIEs’ losses and residual gains associated with the vessels sold and leased backed from them. Accordingly, these VIEs and their related loan facilities are consolidated in our results. Golar Arctic facility In January 2008, we entered into a secured loan facility for an amount of $120.0 million, for the purpose of financing the purchase of the Golar Arctic. The facility bore interest at LIBOR plus a margin of 0.93% and is repayable in quarterly installments over a term of seven years with a final balloon payment of $86.3 million due in January 2015. In December 2014, this facility was fully repaid and we simultaneously entered into another loan facility with the same lender for $87.5 million. Under the new Golar Arctic facility, interest is at LIBOR plus a margin of 2.25% and is repayable in quarterly installments over a term of five years with a final balloon payment of $52.8 million due in December 2019. Golar Viking facility In January 2005, we entered into a $120.0 million secured loan facility with a bank for the purpose of financing the Golar Viking. This facility was refinanced in August 2007 for an amount of $120.0 million. The Golar Viking facility accrues floating interest at a rate of LIBOR plus a margin of 0.70%. The loan has a term of 10 years and is repayable in quarterly installments with a final balloon payment of $71.0 million due in August 2017. The loan is secured by a mortgage on this vessel. Following the decision to sell the Golar Viking to Equinox in December 2014, we prepaid the full outstanding amount of $82.0 million of the Golar Viking facility in February 2015. Golar Viking (2015) In December 2015, we entered into a $62.5 million secured loan facility, with certain lenders, to finance the Golar Viking upon repossession of the vessel from Equinox. The facility is repayable in quarterly installments over a term of five years with a final balloon payment of $37.8 million due in December 2020. This facility bears interest at LIBOR plus a margin of 2.5%. Convertible bonds In March 2012, we completed a private placement offering for convertible bonds, for gross proceeds of $250.0 million. On inception we recognized a liability of $221.9 million and an equity portion of $25.0 million. The liability component is recorded at its present value (discounted using an equivalent borrowing rate which does not include the conversion option) and the accretion from its initial discounted value to par. The equity component is valued as the residual of par less the liability value. The impact of this treatment over the life of the instrument is to increase the interest charge to a "normalized" interest rate as the discount on the liability unwinds over the period to settlement. The secured convertible bonds mature in March 2017 when the holder may convert the bonds into our common shares or redeem at 100% of the principal amount. The convertible bonds have an annual coupon rate of 3.75% which is payable quarterly in arrears and have a conversion price of $55.0. We declared dividends of $1.40 and $1.80 relating to the years ended December 31, 2015 and 2014, respectively. The conversion price was adjusted from $48.40 to $45.82 effective on December 31, 2015. We have secured 13.0 million of our holdings in the subordinated units of Golar Partners against our Convertible Bonds which are due to mature in March 2017. In addition, please refer to note 21 for details of our restricted cash balances. We have a right to redeem the bonds at par plus accrued interest, provided that 90% or more of the bonds issued shall have been redeemed or converted to shares. Accordingly, if the bonds were converted, 5,456,132 shares would be issued if the bonds were converted at the conversion price of $45.82 as at December 31, 2015. The bond may be converted to our ordinary shares by the holders at any time starting on the forty-first business day of the issuance until the tenth business day prior to March 7, 2017. GoFLNG Hilli facility In September 2015, in connection with the conversion of the Hilli to a FLNG, we entered into agreements with a subsidiary of CSSCL for a pre-delivery credit facility and post-delivery sale and leaseback financing. Both the pre-delivery facility and the post-delivery sale and leaseback financings are dependent upon certain conditions precedent before drawing down, in the case of the pre-delivery financing, or execution of the sale and leaseback, in the case of the post-delivery financing. Hilli pre-delivery facility Under the pre-delivery credit facility, a subsidiary of CSSCL will lend us up to $700 million or 60% of the initial project budget for the conversion of the Hilli to partly finance the costs of conversion. The credit facility is non-amortizing with the principal payable at the earlier of August 30, 2018 or sale of the converted Hilli to a subsidiary of CSSCL under the sale and leaseback arrangement (described below under “Hilli post-delivery sale and leaseback financing”). The facility bears interest at a fixed rate of 6.25% per annum. Having satisfied all conditions precedent, we completed our first drawdown on the facility. Accordingly, as of December 31, 2015, the balance outstanding under the pre-delivery facility was $50 million. Subsequent drawdowns are dependent upon reaching further conversion milestones relating to project spend. Hilli post-delivery sale and leaseback financing Pursuant to a memorandum agreement with a subsidiary of CSSCL, we have agreed to sell the converted Hilli upon satisfaction of certain conditions precedent on or before August 30, 2018, for the purchase price of $1.2 billion net of 20%. The proceeds of this sale will be used, in part, to pay off the Hilli pre-delivery financing described above. We will subsequently lease back the vessel on a bareboat charter for a term of 10 years. We have options to repurchase the vessel throughout the charter term, commencing from the fifth year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. Hilli shareholder loans Keppel loan In September 2014, our subsidiary, Golar GHK Lessors Limited ("GGHK"), entered into a Sale and Purchase Agreement with KSI Production Pte Ltd (''KSI''), a subsidiary of Keppel, to sell 10% of its ownership in Golar Hilli Corporation ("Hilli Corp") for $21.7 million. The consideration paid by KSI comprised of the equity value of the shares and a portion of the loans made by GGHK to Hilli Corp. The loan amounted to $21.7 million and is shown under "Long-term debt" in our consolidated financial statements. The loan bears interest at 6% per annum. Installment payments of 2.5% of the value of the loan is payable on a six-monthly basis beginning 12 months after final acceptance of the FLNG with a balloon payment 120 months after final acceptance. Since September 2014 through to December 31, 2015, additional cash calls have been issued to meet funding requirements relating to the conversion of the Hilli to a FLNG. However, during 2015, due to surplus cash balances it was agreed by the Hilli Corp shareholders to return an amount of surplus cash to both KSI and Golar. The amount to be returned to KSI was $9 million and resulted in a decrease in the Keppel loan by the same 1. Accordingly, as of December 31, 2015, the balance outstanding under the Keppel shareholder loan was $44.1 million. (1) The $9 million surplus cash to be returned to KSI remained outstanding as of December 31, 2015 and is captured within “Other current liabilities” (see note 26). B&V loan In November 2014, our subsidiary, GGHK, entered into a Sale and Purchase Agreement with Black & Veatch International Company (''B&V'') to sell 11 shares of the registered issued share capital of Hilli Corp for $5.0 million. The consideration paid by B&V comprised the equity value of the shares and a portion of the loans made by GGHK to Hilli Corp. The loan amounted to $5.0 million and is shown under "Long-term debt" in our consolidated financial statements. The loan bears interest at 6% per annum. Installment payments of 2.5% of the value of the loan is payable on a six-monthly basis beginning 12 months after final acceptance of the FLNG with a balloon payment 120 months after final acceptance. $1.125 billion facility In July 2013, we entered into a $1.125 billion facility to fund eight of our newbuildings. The facility bears interest at LIBOR plus a margin. The facility is divided into three tranches, with the following general terms:
Tranche | Amount | Proportion of facility | Term of loan from date of drawdown | Repayment terms
K-Sure | $449.0 million | 40% | 12 years | Six-monthly installments
KEXIM | $450.0 million | 40% | 12 years | Six-monthly installments
Commercial | $226.0 million | 20% | 5 years | Six-monthly installments, unpaid balance to be refinanced after 5 years
The K-Sure tranche is funded by a consortium of lenders of which 95% is guaranteed by a Korean Trade Insurance Corporation (or K-Sure) policy; the KEXIM tranche is funded by the Export Import Bank of Korea (or KEXIM). Repayments under the K-Sure and KEXIM tranches are due semi-annually with a twelve year repayment profile. The commercial tranche is funded by a syndicate of banks and is for a term of five years from date of drawdown with a final balloon payment of $131.0 million depending on drawdown dates on certain vessels. In the event the commercial tranche is not refinanced prior to the end of the five years, KEXIM has an option to demand repayment of the balance outstanding under the KEXIM tranche. The facility is further divided into vessel-specific tranches dependent upon delivery and drawdown, with each borrower being the subsidiary owning the respective vessel. Upon delivery of a newbuild, we have the ability to drawdown on the facility. On drawdown, the vessel will become secured against the facility. A commitment fee is chargeable on any undrawn portion of this facility. As at December 2014, all eight vessels had been delivered and the facility had been fully drawn down.
Date of drawdown | Vessel | $1.125 billion facility | Amount drawn down
October 2013 | Golar Seal* | $133.2 million | $127.9 million
October 2013 | Golar Celsius | $133.2 million | $128.4 million
May 2014 | Golar Crystal | $133.2 million | $127.9 million
September 2014 | Golar Penguin | $133.2 million | $128.9 million
September 2014 | Golar Bear | $133.2 million | $129.3 million
October 2014 | Golar Frost | $134.8 million | $131.3 million
February 2014 | Golar Igloo** | $161.3 million | $161.3 million
December 2014 | Golar Eskimo*** | $162.8 million | $162.8 million
As at December 2014 |  | $1,125 million | $1,098 million
* In March 2016, we completed the refinancing of the Seal, which provided approximately $50 million excess cash to liquidity. ** In March 2014, we sold the Golar Igloo to Golar Partners. The Golar Igloo debt of $161.3 million was assumed by Golar Partners. *** In December 2014, we entered into a sale and purchase agreement with Golar Partners to sell the companies that own and operate the Golar Eskimo. Therefore, as of December 31, 2014, we classified the Golar Eskimo debt as "Liabilities held-for-sale" in our consolidated balance sheet. In January 2015, we completed the sale of our interests in the companies that own and operate the Golar Eskimo to Golar Partners. The adjusted consideration for the sale was $388.8 million less Golar Partners’ assumption of the Golar Eskimo debt (see note 6). ICBC VIE loans The following loans relate to ICBCL lessor entities that we consolidate as variable interest entities (“VIEs”). Although we have no control over the funding arrangements of these ICBCL entities, we consider ourselves the primary beneficiary of these VIEs and we are therefore required to consolidate these loan facilities into our financial results. Refer to note 4 for additional information. Golar Glacier facility In October 2014, the special purpose vehicle ("SPV"), Hai Jiao 1401 Limited, which owns the Golar Glacier, entered into secured financing agreements for $184.8 million consisting of a senior and junior facilities which are denominated in USD. The senior loan facility of $153 million is a 10 year non-recourse loan provided by ICBC Brussels, with first priority mortgage on the Golar Glacier. The facility bears interest at LIBOR plus a margin and is repayable in semi-annual installments with a balloon payment on maturity. The short-term junior loan facility of $31.8 million is provided by ICBCIL Finance Co., a related party of ICBCL. The junior loan facility bears interest at 6% and is repayable on demand. Golar Snow facility In January 2015, the SPV, Hai Jiao 1402 Limited, which owns the Golar Snow, entered into secured financing agreements for $182.6 million consisting of senior and junior loan facilities which are denominated in USD. The senior loan facility of $160.0 million is a 10 year non-recourse loan provided by ICBC Brussels, with a first priority mortgage on the Golar Snow. The senior loan facility bears interest at LIBOR plus a margin and is repayable in semi-annual installments with a balloon payment on maturity. The junior loan facility of $22.6 million is provided by ICBCIL Finance Co., a related party of ICBCL. The junior loan facility bears interest at 6% and is repayable on demand. Golar Kelvin facility In January 2015, the SPV, Hai Jiao 1405 Limited, which owns the Golar Kelvin, entered into a secured financing agreement for $182.5 million consisting only of a junior loan facility. The junior loan facility is provided by ICBCIL Finance Co., a related party of ICBCL. The loan facility is denominated in USD and bears interest at 6% and is repayable on demand. Golar Ice facility In February 2015, the SPV, Hai Jiao 1406 Limited, which owns the Golar Ice, entered into a secured financing agreement for $172.0 million consisting only of a junior loan facility. The junior loan facility is provided by Skysea Malta Capital, a related party of ICBCL. The loan facility is denominated in USD and bears interest at 3.00% and is repayable on demand. CMBL VIE Loan In November 2015, the SPV, Sea 24 Leasing Co Ltd, which owns the Golar Tundra, entered into a secured financing agreement. The loan facility is denominated in USD, bears interest at LIBOR plus a margin and is repayable in 2016. As of December 31, 2015, we have classified the debt associated with the Golar Tundra as "Liabilities held-for-sale" in our consolidated balance sheet. See note 19 for additional detail. Debt restrictions Certain of our debts are collateralized by ship mortgages and, in the case of some debt, pledges of shares by each guarantor subsidiary. The existing financing agreements impose operating and financing restrictions which may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, make certain investments, engage in mergers and acquisitions, purchase and sell vessels, enter into time or consecutive voyage charters or pay dividends without the consent of the lenders. In addition, lenders may accelerate the maturity of indebtedness under financing agreements and foreclose upon the collateral securing the indebtedness upon the occurrence of certain events of default, including a failure to comply with any of the covenants contained in the financing agreements. Many of our debt agreements contain certain covenants, which require compliance with certain financial ratios. Such ratios include current assets: liabilities and equity ratio covenants and minimum free cash restrictions. With regards to cash restrictions, we have covenanted to retain at least $50.0 million of cash and cash equivalents on a consolidated group basis. In addition, there are cross default provisions in certain of our and Golar Partners loan and lease agreements. In addition to mortgage security, some of our debt is also collaterized through pledges of equity shares by our guarantor subsidiaries. In April 2016, we received a waiver relating to our requirement to comply with the financial covenant contained in our $1.125 billion facility relating specifically to the financing of the Golar Seal and the Golar Celsius. The covenant requires that on the second anniversary of drawdown under the facility, where we fall below a prescribed EBITDA to debt service ratio, additional cash deposits with the financial institution are required to be made or maintained. Subsequent to the year end, pursuant to the refinancing of the Golar Seal newbuild facility, this covenant is no longer applicable, and in relation to the Golar Celsius, the requisite cash deposit was made such that we were in compliance with this covenant. Except for this covenant, we were in compliance with all our covenants under our various loan agreements.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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