(5)	INDEBTEDNESS

The company failed to meet certain covenants contained in the Bank Loan Agreement, the Troms Offshore Debt agreement, and the September 2013 Senior Notes, which resulted in covenant noncompliance that would have allowed the respective lenders and/or the noteholders to declare us to be in default under each of the Funded Debt Agreements, and accelerate the indebtedness thereunder.

To avoid an acceleration of indebtedness of these agreements (and potentially the August 2011 and September 2010 Senior Notes) the company negotiated and obtained limited waivers from the necessary lenders and noteholders until
August 14, 2016 and subsequent, further extensions until September 18, 2016, October 21, 2016, November 11, 2016, January 27, 2017, March 3, 2017, March 27, 2017, and April 7, 2017. When the final waiver expired in accordance with its terms on April 7, 2017, negotiations regarding the terms of the company’s restructuring were substantially complete.

Please refer to Note (2) of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form
10-K for additional information regarding the negotiations with its Lenders and Noteholders, Restructuring Support Agreement and Reorganization and chapter 11 Proceedings.

As a result of the above, all of the company’s debt has been classified as current on its Consolidated Balance Sheets as of March 31, 2017 and March 31, 2016.

Bank Loan Agreement

In May 2015, the company amended and extended its existing bank loan agreement. The amended bank loan agreement matures in June 2019 (the “Maturity Date”) and provides for a $900 million, five-year credit facility (“credit facility”) consisting of a (i) $600 million revolving credit facility (the “revolver”) and a (ii) $300 million term loan facility (“term loan”).

Borrowings under the credit facility are unsecured and bear interest at the company’s option at (i) the greater of prime or the federal funds rate plus 0.25 to 1.00%, or (ii) Eurodollar rates, plus margins ranging from 1.25 to 2.00% based on the company’s consolidated funded debt to capitalization ratio. Commitment fees on the unused portion of the facilities range from 0.15 to 0.30% based on the company’s funded debt to total capitalization ratio. The credit facility requires that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%, and maintain a consolidated interest coverage ratio (essentially consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the four prior fiscal quarters to consolidated interest charges, including capitalized interest, for such period) of not less than 3.0 to 1.0. All other terms, including the financial and negative covenants, are customary for facilities of its type and consistent with the prior agreement in all material respects.

The company had $300 million in term loan borrowings and $600 million of revolver borrowings outstanding at March 31, 2017 and 2016. At March 31, 2017, the estimated fair market value of the term loan and the revolver was $168 million and $336 million, respectively.

Senior Debt Notes

The determination of fair value includes an estimated credit spread between our long term debt and treasuries with similar matching expirations. The credit spread is determined based on comparable publicly traded companies in the oilfield service segment with similar credit ratings. These estimated fair values are based on Level 2 inputs.

September 2013 Senior Notes

On September 30, 2013, the company executed a note purchase agreement for $500 million and issued $300 million of senior unsecured notes to a group of institutional investors. The company issued the remaining $200 million of senior unsecured notes on November 15, 2013. A summary of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2017			2016
Aggregate debt outstanding	$	500,000			500,000
Weighted average remaining life in years		6.4			7.4
Weighted average coupon rate on notes outstanding		4.86	%		4.86	%
Fair value of debt outstanding		280,000			342,746

The multiple series of notes totaling $500 million were issued with maturities ranging from approximately seven to 12 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55% and maintain a ratio of consolidated EBITDA to consolidated interest charges, including capitalized interest, of not less than 3.0 to 1.0.

August 2011 Senior Notes

On August 15, 2011, the company issued $165 million of senior unsecured notes to a group of institutional investors. A summary of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2017			2016
Aggregate debt outstanding	$	165,000			165,000
Weighted average remaining life in years		3.6			4.6
Weighted average coupon rate on notes outstanding		4.42	%		4.42	%
Fair value of debt outstanding		92,400			127,148

The multiple series of notes were originally issued with maturities ranging from approximately eight to 10 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%.

September 2010 Senior Notes

In fiscal 2011, the company completed the sale of $425 million of senior unsecured notes. A summary of the aggregate amount of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2017			2016
Aggregate debt outstanding	$	382,500			382,500
Weighted average remaining life in years		3.1			4.1
Weighted average coupon rate on notes outstanding		4.35	%		4.35	%
Fair value of debt outstanding		214,200			302,832

The multiple series of these notes were originally issued with maturities ranging from five to 12 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%.

Included in accumulated other comprehensive loss at March 31, 2016, is an after-tax loss of $1.5 million ($2.4 million pre-tax), respectively, relating to the purchase of interest rate hedges, which are cash flow hedges, in July 2010 in connection with the September 2010 senior notes offering. The interest rate hedges settled in August 2010 concurrent with the pricing of the senior unsecured notes. The hedges met the effectiveness criteria and their acquisition costs were being amortized to interest expense over the term of the individual notes matching the term of the hedges to interest expense. During the fourth quarter of fiscal 2017 the remaining other comprehensive loss related to the interest rate hedge of $1.3 million ($2.4 million pre-tax) was recognized as interest expense in accordance with ASC 815.

Troms Offshore Debt

In May 2015, Troms Offshore entered into a $31.3 million, U.S. dollar denominated, 12 year borrowing agreement originally scheduled to mature in April 2027 secured only by a company guarantee. The loan requires semi-annual principal payments of $1.3 million (plus accrued interest) and bears interest at a fixed rate of 2.92% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.50% for a total all-in rate of 4.42%). As of March 31, 2017, $27.4 million is outstanding under this agreement.

In March 2015, Troms Offshore entered into a $29.5 million, U.S. dollar denominated, 12 year borrowing agreement originally scheduled to mature in January 2027 secured only by a company guarantee. The loan requires semi-annual principal payments of $1.2 million (plus accrued interest) and bears interest at a fixed rate of 2.91% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.50% for a total all-in rate of 4.41%). As of March 31, 2017, $24.6 million is outstanding under this agreement.

A summary of U.S. dollar denominated Troms Offshore borrowings outstanding at March 31, is as follows:

(In thousands)	March 31, 2017		March 31, 2016
May 2015 notes (A)
Amount outstanding	$	27,421		30,033
Fair value of debt outstanding (Level 2)		27,395		30,062
March 2015 notes (A)
Amount outstanding	$	24,573		27,030
Fair value of debt outstanding (Level 2)		24,544		27,027

(A)

Note requires semi-annual principal payments.

In January 2014, Troms Offshore entered into a 300 million NOK, 12 year borrowing agreement originally scheduled to mature in January 2026 secured only by a company guarantee. The loan requires semi-annual principal payments of 12.5 million NOK (plus accrued interest) and bears interest at a fixed rate of 2.31% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 2.00% for a total all-in rate of 4.31%). As of March 31, 2017, 225 million NOK (approximately $26.2 million) is outstanding under this agreement.

In May 2012, Troms Offshore entered into a 204.4 million NOK denominated borrowing agreement originally scheduled to mature in May 2024 and is secured only by a company guarantee. The loan requires semi-annual principal payments of 8.5 million NOK (plus accrued interest), bears interest at a fixed rate of 3.88% plus a premium based on Tidewater’s funded indebtedness to capitalization ratio (currently equal to 2.00% for a total all-in rate of 5.88%). As of March 31, 2017, 127.8 million NOK (approximately $14.9 million) is outstanding under this agreement.

A summary of Norwegian Kroner (NOK) denominated Troms Offshore borrowings outstanding at March 31, and their U.S. dollar equivalents is as follows:

(In thousands)	March 31, 2017		March 31, 2016
4.31% January 2014 notes (A):
NOK denominated		225,000		250,000
U.S. dollar equivalent	$	26,167		30,207
Fair value in U.S. dollar equivalent (Level 2)		26,133		30,199
5.88% May 2012 notes (A):
NOK denominated		127,800		144,840
U.S. dollar equivalent	$	14,864		17,500
Fair value in U.S. dollar equivalent (Level 2)		14,793		17,479

(A)

Note requires semi-annual principal payments.

Each of the four Troms Offshore Debt tranches (two U.S. dollar denominated and two NOK denominated) require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%, and maintain a consolidated interest coverage ratio (essentially consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the four prior fiscal quarters to consolidated interest charges, including capitalized interest, for such period) of not less than 3.0 to 1.0. For information regarding a forbearance agreement and amendments to the Troms debt instruments entered into at the time the RSA was agreed upon, see Note (2) of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Summary of Debt Outstanding per Stated Maturities

The following table summarizes debt outstanding at March 31 based on stated maturities:

(In thousands)	2017		2016
3.90% September 2010 senior notes due fiscal 2018	$	44,500		44,500
3.95% September 2010 senior notes due fiscal 2018		25,000		25,000
4.12% September 2010 senior notes due fiscal 2019		25,000		25,000
4.17% September 2010 senior notes due fiscal 2019		25,000		25,000
4.33% September 2010 senior notes due fiscal 2020		50,000		50,000
4.51% September 2010 senior notes due fiscal 2021		100,000		100,000
4.56% September 2010 senior notes due fiscal 2021		65,000		65,000
4.61% September 2010 senior notes due fiscal 2023		48,000		48,000
4.06% August 2011 senior notes due fiscal 2019		50,000		50,000
4.54% August 2011 senior notes due fiscal 2022		65,000		65,000
4.64% August 2011 senior notes due fiscal 2022		50,000		50,000
4.26% September 2013 senior notes due fiscal 2021		123,000		123,000
5.01% September 2013 senior notes due fiscal 2024		250,000		250,000
5.16% September 2013 senior notes due fiscal 2026		127,000		127,000
NOK denominated notes due fiscal 2025		14,864		17,500
NOK denominated notes due fiscal 2026		26,167		30,207
USD denominated notes due fiscal 2027		24,573		27,030
USD denominated notes due fiscal 2028		27,421		30,033
Bank term loan due fiscal 2020		300,000		300,000
Revolving line of credit due fiscal 2020		600,000		600,000
	$	2,040,525		2,052,270
Less: Deferred debt issue costs		6,401		6,754
Total debt	$	2,034,124		2,045,516

Debt Costs

The company capitalizes a portion of its interest costs incurred on borrowed funds used to construct vessels. Interest and debt costs incurred, net of interest capitalized, for the years ended March 31, are as follows:

(In thousands)	2017		2016		2015
Interest and debt costs incurred, net of interest capitalized	$	75,026		53,752		50,029
Interest costs capitalized		4,829		10,451		13,673
Total interest and debt costs	$	79,855		64,203		63,702