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INDEBTEDNESS | 12 Months Ended
--- | ---
Dec. 31, 2019
Debt Disclosure [Abstract] |
INDEBTEDNESS | (4)INDEBTEDNESS The following table summarizes debt outstanding based on stated maturities:
|  | December 31, |  |  | December 31, |
(In thousands) |  | 2019 |  |  | 2018 |
Secured notes: |  |  |  |  |  |  |  |
8.00% Secured notes due August 2022 |  | $ | 224,793 |  |  |  | 349,954 |
Troms Offshore borrowings: |  |  |  |  |  |  |  |
NOK denominated notes due May 2024 |  |  | 10,260 |  |  |  | 12,241 |
NOK denominated notes due January 2026 |  |  | 20,788 |  |  |  | 22,988 |
USD denominated notes due January 2027 |  |  | 20,273 |  |  |  | 22,116 |
USD denominated notes due April 2027 |  |  | 21,545 |  |  |  | 24,157 |
|  |  | 297,659 |  |  |  | 431,456 |
Debt premium and discount, net |  |  | (8,725 | ) |  |  | 7,548 |
Less: Current portion of long-term debt |  |  | (9,890 | ) |  |  | (8,568 | )
Total long-term debt |  | $ | 279,044 |  |  |  | 430,436 |
We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Secured Notes Pursuant to the terms of the Plan, we entered into an indenture (the “Indenture”) by and among our, the wholly-owned subsidiaries named as guarantors therein (the “Guarantors”), and Wilmington Trust, National Association, as trustee and collateral agent (the “Trustee”), and issued $350.0 million aggregate principal amount of our 8.00% Senior Secured Notes due 2022 (the “Secured Notes”). We amended the Indenture pursuant to the Third Supplemental Indenture dated November 22, 2019 to allow for additional flexibility in our financial covenants, the ability to incur indebtedness, grant liens and make restricted payments. Additional revisions were made to enhance operational flexibility and streamline compliance provisions. The Secured Notes will mature on August 1, 2022. Interest on the Secured Notes accrues at a rate of 8.00% per annum and are payable quarterly in arrears on February 1, May 1, August 1, and November 1 of each year in cash. The Secured Notes are secured by substantially all of our assets and our Guarantors. As of December 31, 2019, the fair value (Level 2) of the Secured Notes was $237.6 million. The Secured Notes have a quarterly minimum trailing year interest coverage requirement that began June 30, 2019. Minimum liquidity requirements and other covenants are set forth in the Indenture and are in effect from July 31, 2017. The Indenture also contains certain customary events of default and has a make-whole provision. Until terminated under the circumstances described in this paragraph, the Secured Notes and the guarantees by the Guarantors are secured by the Collateral (as defined in the Indenture) pursuant to the terms of the Indenture and the related security documents. The Trustee’s liens upon the Collateral and the right of the holders of the Secured Notes to the benefits and proceeds of the Trustee’s liens on the Collateral will terminate and be discharged in certain circumstances described in the Indenture, including: (i) upon satisfaction and discharge of the Indenture in accordance with the terms thereof; or (ii) as to any of our Collateral or the Guarantors that is sold, transferred or otherwise disposed of by us or the Guarantors in a transaction or other circumstance that complies with the terms of the Indenture, at the time of such sale, transfer or other disposition. Secured Notes Tender Offer We are obligated to offer to repurchase the Secured Notes at par in amounts that generally approximate 65% of asset sale proceeds as defined in the Indenture. In February and December of 2018, we commenced offers to repurchase up to $24.7 million and $25.4 million, respectively, of the Secured Notes. In March 2018 and January 2019 we repurchased $0.04 million and $0.1 million, respectively, of the Secured Notes in accordance with these tender offer obligations. The $5.8 million and $26.0 million restricted cash on the balance sheet at December 31, 2019 and 2018, represent proceeds from asset sales since the date of the last tender offer and is restricted as of that date by the terms of the Indenture. Upon completion of the December 2018 tender offer in early 2019, the restriction on the non-tendered amount of restricted cash was released. The restricted cash at December 31, 2019 remains restricted until the next tender offer is complete. We completed a successful voluntary tender offer in November 2019 that resulted in the repurchase of notes with a face value of $125.0 million plus a premium of 8.5% for total repurchase price of $135.6 million. We accounted for this tender as a modification of debt and deferred the premium and other costs of $11.4 million which will be expensed under the interest method over the remaining term. Troms Offshore Debt Concurrent with the Effective Date, the Troms Offshore credit agreement was amended and restated to (i) reduce by 50% the required principal payments due from the Effective Date through March 31, 2019, (ii) modestly increase the interest rates on amounts outstanding through April 2023, and (iii) provide for security and additional guarantees, including (a) mortgages on six vessels and related assignments of earnings and insurances, (b) share pledges by Troms Offshore and certain subsidiaries of Troms Offshore, and (c) guarantees by certain subsidiaries of Troms Offshore. The Troms Offshore borrowings continue to require semi-annual principal payments and bear interest at fixed rates based, in part, on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio. In May 2015, Troms Offshore entered into a $31.3 million, U.S. dollar denominated, 12 year borrowing agreement scheduled to mature in April 2027. The loan requires semi-annual principal and interest payments 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 1.00% and a 1.00% sub-tranche premium (for a total all-in rate of 4.92%). As of December 31, 2019, $21.5 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 scheduled to mature in January 2027. The loan requires semi-annual principal and interest payments 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 1.00% and a 1.00% sub-tranche premium (for a total all-in rate of 4.91%). As of December 31, 2019, $20.3 million is outstanding under this agreement. A summary of U.S. dollar denominated Troms Offshore borrowings outstanding is as follows:
|  | December 31, |  |  | December 31, |
(In thousands) |  | 2019 |  |  | 2018 |
Notes due April 2027 |  |  |  |  |  |  |  |
Amount outstanding |  | $ | 21,545 |  |  |  | 24,157 |
Fair value of debt outstanding (Level 2) |  |  | 21,546 |  |  |  | 24,157 |
Notes due January 2027 |  |  |  |  |  |  |  |
Amount outstanding |  | $ | 20,273 |  |  |  | 22,116 |
Fair value of debt outstanding (Level 2) |  |  | 20,278 |  |  |  | 22,115 |
In January 2014, Troms Offshore entered into a 300 million Norwegian kroner (NOK) denominated, 12 year borrowing agreement scheduled to mature in January 2026. The loan requires semi-annual principal and interest payments 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 1.25% and a 1.00% sub-tranche premium (for a total all-in rate of 4.56%). As of December 31, 2019, 181.3 million NOK (approximately $20.8 million) is outstanding under this agreement. In May 2012, Troms Offshore entered into a 204.4 million NOK denominated borrowing agreement scheduled to mature in May 2024. The loan requires semi-annual principal and interest payments and bears interest at a fixed rate of 3.88% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio currently equal to 1.25% and a 1.00% sub-tranche premium (for a total all-in rate of 6.13%). As of December 31, 2019, 89.5 million NOK (approximately $10.3 million) is outstanding under this agreement. A summary of NOK denominated Troms Offshore borrowings outstanding and their U.S. dollar equivalents is as follows:
|  | December 31, |  |  | December 31, |
(In thousands) |  | 2019 |  |  | 2018 |
Notes due January 2026 |  |  |  |  |  |  |  |
NOK denominated |  |  | 181,250 |  |  |  | 200,000 |
U.S. dollar equivalent |  | $ | 20,788 |  |  | $ | 22,988 |
Fair value in U.S. dollar equivalent (Level 2) |  |  | 20,792 |  |  |  | 22,988 |
Notes due May 2024 |  |  |  |  |  |  |  |
NOK denominated |  |  | 89,460 |  |  |  | 106,500 |
U.S. dollar equivalent |  | $ | 10,260 |  |  | $ | 12,241 |
Fair value in U.S. dollar equivalent (Level 2) |  |  | 10,259 |  |  |  | 12,239 |
GulfMark Term Loan Facility Upon consummation of the business combination, we repaid the $100.0 million outstanding balance of GulfMark’s Term Loan Facility plus accrued interest and an early extinguishment penalty. The repayment of this term loan facility resulted in the recognition of a loss on early extinguishment of debt of $8.1 million for the year ended December 31, 2018. In addition, a related undrawn revolving credit facility with $25.0 million of borrowing capacity was also terminated immediately upon closure of the GulfMark merger. Debt Costs We capitalize a portion of our interest costs incurred on borrowed funds used to construct vessels. Interest and debt costs incurred, net of interest capitalized are as follows:
|  | Successor |  |  |  | Predecessor |
|  |  |  |  |  |  |  |  |  | Period from |  |  |  | Period from |
|  | Year |  |  | Year |  |  | August 1, 2017 |  |  |  | April 1, 2017 |
|  | Ended |  |  | Ended |  |  | through |  |  |  | through |
(In thousands) |  | December 31, 2019 |  |  | December 31, 2018 |  |  | December 31, 2017 |  |  |  | July 31, 2017 |
Interest and debt costs incurred, net of interest capitalized |  | $ | 29,068 |  |  | $ | 30,439 |  |  |  | 13,009 |  |  |  |  | 11,179 |
Interest costs capitalized |  |  | — |  |  |  | 521 |  |  |  | 101 |  |  |  |  | 601 |
Total interest and debt costs |  | $ | 29,068 |  |  | $ | 30,960 |  |  |  | 13,110 |  |  |  |  | 11,780 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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