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Debt | 3 Months Ended
--- | ---
Mar. 31, 2015
Debt Disclosure [Abstract] |
DEBT | DEBT Long-term debt and capital lease obligations at March 31, 2015 and December 31, 2014 are as follows:
| March 31, 2015 |  | December 31, 2014
In thousands | Current |  | Non-Current |  | Current |  | Non-Current
3.25% Convertible Senior Notes due 2028 | $ | — |  |  | $ | 712 |  |  | $ | 5,334 |  |  | $ | — |
7.875% Senior Notes due 2021, net(1) | — |  |  | 425,935 |  |  | — |  |  | 427,603 |
Short-term Credit Agreement, net(2) | 49,753 |  |  | — |  |  | — |  |  | — |
San Bartolomé Letter of Credit | 8,321 |  |  | 9,892 |  |  | 4,481 |  |  | 10,304 |
Capital lease obligations | 7,645 |  |  | 11,240 |  |  | 7,683 |  |  | 13,141 |
| $ | 65,719 |  |  | $ | 447,779 |  |  | $ | 17,498 |  |  | $ | 451,048 |
(1) Net of unamortized debt issuance costs and premium received of $7.0 million and $7.3 million as of March 31, 2015 and December 31, 2014, respectively. (2) Net of unamortized debt issuance costs of $0.2 million as of March 31, 2015. 7.875% Senior Notes due 2021 During the three months ended March 31, 2015, the Company repurchased $2.0 million in aggregate principal amount of its 7.875% Senior Notes due 2021 (the "Senior Notes"), resulting in a balance of $432.9 million at March 31, 2015. 3.25% Convertible Senior Notes due 2028 Per the indenture governing the 3.25% Convertible Senior Notes due 2028 (the “Convertible Notes”), the Company announced on February 12, 2015 that it was offering to repurchase all of the Convertible Notes. During the three months ended March 31, 2015, the Company repurchased $4.6 million in aggregate principal amount, leaving a balance of $0.7 million at March 31, 2015. The Convertible Notes are classified as non-current liabilities at March 31, 2015 as a result of the expiration of the holders' option to require the Company to repurchase the notes on March 15, 2015. Short-term Credit Agreement On March 31, 2015, the Company entered into a Credit Agreement (the "Credit Agreement") with The Bank of Nova Scotia. The Credit Agreement provides for a $50.0 million loan (the “Loan”) to the Company, the proceeds of which are expected to be used to finance working capital and general corporate purposes of the Company and its subsidiaries, and which has a term of one year. The Loan currently bears interest at a rate equal to an adjusted Eurocurrency rate plus a margin of 2.50% (which increases incrementally on the first day of each fiscal quarter commencing July 1, 2015 up to a maximum of 4.50%). Voluntary prepayments of the Loan under the Credit Agreement are permitted without prepayment premium or penalty, subject to notice requirements and payment of accrued interest. The Credit Agreement requires net cash proceeds of debt or equity issuances, bank facilities, asset sales and casualty insurance recoveries (in each case, subject to certain exceptions) to be applied as a mandatory prepayment of the Loan. Amounts repaid on the Loan may not be re-borrowed. The Loan is secured by a pledge of the Company’s stock in Wharf Resources (U.S.A.), Inc. and by the grant of security in substantially all of the assets of Wharf and its subsidiaries. If the Loan has not been repaid in full by January 1, 2016, the Company will be required to pledge its equity interests in certain of its other subsidiaries as additional collateral for the Loan. There was an outstanding balance of $50.0 million under the Credit Agreement at March 31, 2015. The Credit Agreement contains customary representations and warranties, events of default, and affirmative and negative covenants. The Credit Agreement also contains financial covenants that require (i) the Company’s ratio of consolidated debt (net of cash) to adjusted EBITDA to be not greater than 3.50 to 1.00 at any time, and (ii) that the Company maintain cash and cash equivalents of at least $100.0 million at all times. For purposes of the Credit Agreement, the adjusted EBITDA covenant is determined using actual 2015 results on an annualized basis and has been calculated on a pro forma basis to include the impact of the Wharf acquisition for the three months ended March 31, 2015. The Company was in compliance with the covenants under the Credit Agreement at March 31, 2015. Lines of Credit At March 31, 2015, San Bartolomé had two outstanding lines of credit. The first line of credit is for $12.0 million bearing interest at 6.0% per annum, maturing in 270 days. The second line of credit is for $15.0 million bearing interest at 6.0% per annum, maturing in three years. Both lines of credit are secured with machinery and equipment. There was an aggregate outstanding balance of $18.2 million on both lines of credit at March 31, 2015. Palmarejo Gold Production Royalty Obligation On January 21, 2009, Coeur Mexicana entered into a gold production royalty transaction with a subsidiary of Franco-Nevada Corporation under which the subsidiary of Franco-Nevada Corporation purchased a royalty covering 50% of the life of mine gold to be produced from its Palmarejo silver and gold mine in Mexico. The royalty agreement provides for a minimum obligation to be paid monthly on a total of 400,000 ounces of gold, or 4,167 ounces per month over an initial eight year period. Each monthly payment is an amount equal to the greater of 4,167 ounces of gold or 50% of actual gold production multiplied by the excess of the monthly average market price of gold above $412 per ounce, subject to a 1% annual inflation compounding adjustment. Payments under the royalty agreement are made in cash or gold bullion. During the three months ended March 31, 2015 and 2014, the Company paid $10.4 million and $14.7 million, respectively. At March 31, 2015, payments had been made on a total of 327,586 ounces of gold with further payments to be made on an additional 72,414 ounces of gold. The Company used an implicit interest rate of 30.5% to discount the original royalty obligation, based on the fair value of the consideration received projected over the expected future cash flows at inception of the obligation. The discounted obligation is accreted to its expected future value over the expected minimum payment period based on the implicit interest rate. The Company recognized accretion expense of $2.0 million and $3.2 million for the three months ended March 31, 2015 and 2014, respectively. At March 31, 2015 and December 31, 2014, the remaining minimum obligation under the royalty agreement was $29.9 million and $34.0 million, respectively. Interest Expense Interest expense consists of the following:
|  | Three months ended March 31,
In thousands |  | 2015 |  | 2014
3.25% Convertible Senior Notes due 2028 |  | $ | 37 |  |  | $ | 43 |
7.875% Senior Notes due 2021 |  | 8,562 |  |  | 6,464 |
San Bartolomé Line of Credit |  | 272 |  |  | — |
Revolving Credit Facility |  | — |  |  | 179 |
Loss on Revolving Credit Facility |  | — |  |  | 3,035 |
Capital lease obligations |  | 298 |  |  | 59 |
Accretion of Palmarejo gold production royalty obligation |  | 2,031 |  |  | 3,196 |
Amortization of debt issuance costs |  | 405 |  |  | 498 |
Accretion of debt premium |  | (105 | ) |  | (36 | )
Capitalized interest |  | (735 | ) |  | (384 | )
Total interest expense, net of capitalized interest |  | $ | 10,765 |  |  | $ | 13,054 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
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- Details
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