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Debt And Interest Expense | 12 Months Ended
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Dec. 31, 2018
Debt Disclosure [Abstract] |
Debt And Interest Expense | Debt and Interest Expense Senior Notes As of December 31, 2018, the Company had senior notes outstanding of $1.79 billion, net of unamortized issuance costs. All of the outstanding senior notes were issued at par and are senior unsecured obligations of the Company. Interest is payable on each of the senior notes semi-annually. Each of the senior notes issuances is redeemable, in whole or in part, at the Company’s option at times and redemption prices specified in the indentures. The following table summarizes information related to our Senior notes (in thousands, except interest rates):
|  |  |  |  | As of December 31,
|  |  |  |  | 2018 |  | 2017
|  | Issuance Date | Maturity Date | Interest Rate | Principal
Senior notes due 2023 |  | April 16, 2013 | May 1, 2023 | 4.625 | % | $ | 750,000 |  |  | $ | 750,000 |
Senior notes due 2025 |  | March 27, 2015 | April 1, 2025 | 5.250 | % | 500,000 |  |  | 500,000 |
Senior notes due 2027 |  | July 5, 2017 | July 15, 2027 | 4.750 | % | 550,000 |  |  | 550,000 |
Unamortized issuance costs |  |  |  |  | (14,953 | ) |  | (17,471 | )
Total senior notes |  |  |  |  | $ | 1,785,047 |  |  | $ | 1,782,529 |
The indenture governing the 2023 Senior Notes contains covenants that limit the ability of the Company and/or its restricted subsidiaries, under certain circumstances, to, among other things: (i) pay dividends or make distributions on, or redeem or repurchase, its capital stock; (ii) make certain investments; (iii) create liens on assets; (iv) enter into sale/leaseback transactions and (v) merge or consolidate or sell all or substantially all of its assets. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, may permit or, in certain circumstances, require the principal, premium, if any, accrued and unpaid interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. The Company has remained in compliance with these covenants and no events of default have occurred over the term of the Notes. 2015 Credit Facility On March 31, 2015, the Company entered into a credit agreement for a $200.0 million committed senior unsecured revolving credit facility (the “2015 Credit Facility”). The 2015 Credit Facility includes financial covenants requiring that the Company’s interest coverage ratio not be less than 3.0 to 1.0 for any period of four consecutive quarters and the Company’s leverage ratio not exceed 2.5 to 1.0. As of December 31, 2018, there were no borrowings outstanding under the facility and the Company was in compliance with the financial covenants. The 2015 Credit Facility expires on April 1, 2020 at which time any outstanding borrowings are due. Verisign may from time to time request lenders to agree on a discretionary basis to increase the commitment amount by up to an aggregate of $150.0 million. Subordinated Convertible Debentures In August 2007, Verisign issued $1.25 billion principal amount of 3.25% subordinated convertible debentures due August 15, 2037, in a private offering. At issuance, the Company calculated the carrying value of the liability component as the present value of its cash flows using a borrowing rate for similar non-convertible debt with no contingent payment options, adjusted for the fair value of the contingent interest feature. The table below presents the carrying amounts of the liability and equity components as of December 31, 2017.
Debt discount upon issuance (net of issuance costs of $14,449) | $ | 686,221 |
Deferred taxes associated with the debt discount upon issuance | (267,225 | )
Carrying amount of equity component | $ | 418,996 |
Principal amount of Subordinated Convertible Debentures | $ | 1,250,000 |
Unamortized discount of liability component | (612,303 | )
Unamortized debt issuance costs associated with the liability component | (10,081 | )
Carrying amount of liability component | $ | 627,616 |
On February 15, 2018, the Company called for the redemption of all the outstanding Subordinated Convertible Debentures with a redemption date of May 1, 2018. Substantially all of the holders elected to convert their debentures, and on May 1, 2018, the Company settled the $1.25 billion principal value in cash, and issued 26.1 million shares of common stock for the $3.17 billion excess of the conversion value over the principal amount. Of the total consideration transferred to settle the debentures, $651.3 million was allocated to the liability component, and the remaining $3.77 billion was allocated to the equity component. The fair value of the liability component exceeded the $644.7 million carrying value, and therefore, resulted in a loss of $6.6 million upon extinguishment of the Subordinated Convertible Debentures in the second quarter of 2018. The following table presents the components of the Company’s interest expense:
| Year Ended December 31,
2018 |  | 2017 |  | 2016
| (In thousands)
Contractual interest on Subordinated Convertible Debentures | $ | 20,015 |  |  | $ | 47,432 |  |  | $ | 40,625 |
Contractual interest on Senior Notes | 87,063 |  |  | 73,638 |  |  | 60,938 |
Amortization of debt discount on the Subordinated Convertible Debentures | 4,236 |  |  | 12,012 |  |  | 11,094 |
Amortization of debt issuance costs and other interest expense | 3,531 |  |  | 3,254 |  |  | 2,907 |
Total interest expense | $ | 114,845 |  |  | $ | 136,336 |  |  | $ | 115,564 |

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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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