Long-Term Debt

3 Months Ended

Mar. 31, 2021

Note 5 - Long-Term Debt

The following table summarizes the Company’s total outstanding balance on its revolving credit facility, Senior Secured Notes net of unamortized discount and deferred financing costs, and Senior Unsecured Notes, net of unamortized deferred financing costs, as of March 31, 2021, and December 31, 2020:


	As of March 31, 2021		As of December 31, 2020
	(in thousands)
Revolving credit facility	$	135,000	$	93,000
Senior Secured Notes (1)	464,222		460,656
Senior Unsecured Notes (1)	1,661,429		1,660,663
Total	$	2,260,651	$	2,214,319

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(1) Senior Secured Notes and Senior Unsecured Notes are defined below.

Credit Agreement

The Company’s Credit Agreement provides for a senior secured revolving credit facility with a maximum loan amount of $2.5 billion. As of March 31, 2021, the borrowing base and aggregate lender commitments under the Credit Agreement were $1.1 billion. The next scheduled borrowing base redetermination date is October 1, 2021.

The Credit Agreement is scheduled to mature on September 28, 2023. The maturity date could, however, occur earlier on August 16, 2022, if the Company has not completed certain repurchase, redemption, or refinancing activities associated with its 6.125% Senior Notes due 2022 (“2022 Senior Notes”), and does not have certain unused availability for borrowing under the Credit Agreement, as outlined in the Credit Agreement.

Interest and commitment fees associated with the revolving credit facility are accrued based on a borrowing base utilization grid set forth in the Credit Agreement as presented in Note 5 - Long-Term Debt in the 2020 Form 10-K. At the Company’s election, borrowings under the Credit Agreement may be in the form of Eurodollar, Alternate Base Rate (“ABR”), or Swingline loans. Eurodollar loans accrue interest at LIBOR, plus the applicable margin from the utilization grid, and ABR and Swingline loans accrue interest at a market-based floating rate, plus the applicable margin from the utilization grid. Commitment fees are accrued on the unused portion of the aggregate lender commitment amount at rates from the utilization grid and are included in the interest expense line item on the accompanying statements of operations.

The Credit Agreement specifies that if LIBOR is no longer a widely used benchmark rate, or if it is no longer used for determining interest rates for loans in the United States, a replacement interest rate that fairly reflects the cost to the lenders of funding loans shall be established by the Administrative Agent, as defined in the Credit Agreement, in consultation with the Company. Please refer to Note 1 - Summary of Significant Accounting Policies for discussion of FASB ASU 2020-04, which provides guidance related to reference rate reform.

The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of April 21, 2021, March 31, 2021, and December 31, 2020:


	As of April 21, 2021		As of March 31, 2021		As of December 31, 2020
	(in thousands)
Revolving credit facility (1)	$	76,500	$	135,000	$	93,000
Letters of credit (2)	—		—		42,000
Available borrowing capacity	1,023,500		965,000		965,000
Total aggregate lender commitment amount	$	1,100,000	$	1,100,000	$	1,100,000

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(1) Unamortized deferred financing costs attributable to the revolving credit facility are presented as a component of the other noncurrent assets line item on the accompanying balance sheets and totaled $3.9 million and $4.3 million as of March 31, 2021, and December 31, 2020, respectively. These costs are being amortized over the term of the revolving credit facility on a straight-line basis.

(2) Letters of credit outstanding reduce the amount available under the revolving credit facility on a dollar-for-dollar basis.

Senior Notes

Senior Secured Notes. Senior Secured Notes, net of unamortized discount and deferred financing costs, included within the Senior Notes, net line item on the accompanying balance sheets as of March 31, 2021, and December 31, 2020, consisted of the following:


	As of March 31, 2021
	Principal Amount		Unamortized Debt Discount		Unamortized Deferred Financing Costs		Net
	(in thousands)
1.50% Senior Secured Convertible Notes due 2021	$	65,485	$	914	$	87	$	64,484
10.0% Senior Secured Notes due 2025	446,675		36,085		10,852		399,738
Total	$	512,160	$	36,999	$	10,939	$	464,222

	As of December 31, 2020
	Principal Amount		Unamortized Debt Discount		Unamortized Deferred Financing Costs		Net
	(in thousands)
1.50% Senior Secured Convertible Notes due 2021	$	65,485	$	1,828	$	175	$	63,482
10.0% Senior Secured Notes due 2025	446,675		37,943		11,558		397,174
Total	$	512,160	$	39,771	$	11,733	$	460,656

The 1.50% Senior Secured Convertible Notes due 2021 (“2021 Senior Secured Convertible Notes”) and the 10.0% Senior Secured Notes due 2025 (“2025 Senior Secured Notes,” and together with the 2021 Senior Secured Convertible Notes, the “Senior Secured Notes”) are senior obligations of the Company, secured on a second-priority basis, ranking junior to the Company’s obligations under the Credit Agreement and equal in priority to one another. The Senior Secured Notes rank senior in right of payment with all of the Company’s existing and any future unsecured senior or subordinated debt.

Beginning January 1, 2021, until the maturity date, holders may convert their 2021 Senior Secured Convertible Notes at any time based on a conversion rate of 24.6914 shares of the Company’s common stock per $1,000 principal amount of the 2021 Senior Secured Convertible Notes, which is equal to an initial conversion price of approximately $40.50 per share, subject to adjustment. The if-converted value of the 2021 Senior Secured Convertible Notes did not exceed the principal amount as of March 31, 2021, or through the filing of this report. The Company has elected to settle the 2021 Senior Secured Convertible Notes obligation, due July 1, 2021, in cash and intends to settle the obligation using borrowings under its revolving credit facility. The remaining debt discount and debt-related issuance costs are being amortized to the principal value of the 2021 Senior Secured Convertible Notes as interest expense through the maturity date. Interest expense recognized on the 2021 Senior Secured Convertible Notes related to the stated interest rate and amortization of the debt discount totaled $1.2 million and $2.9 million for the three months ended March 31, 2021, and 2020, respectively. The Company may not redeem the 2021 Senior Secured Convertible Notes prior to the maturity date.

The Company may redeem some or all of its 2025 Senior Secured Notes prior to their maturity at redemption prices based on a premium, plus accrued and unpaid interest as described in the indenture governing the 2025 Senior Secured Notes.

Please refer to Note 5 - Long-Term Debt in the 2020 Form 10-K for additional detail on the Company’s Senior Secured Notes and capped call transactions associated with the 2021 Senior Secured Convertible Notes.

Senior Unsecured Notes. Senior Unsecured Notes, net of unamortized deferred financing costs, included within the Senior Notes, net line item on the accompanying balance sheets as of March 31, 2021, and December 31, 2020, consisted of the following:


	As of March 31, 2021						As of December 31, 2020
	Principal Amount		Unamortized Deferred Financing Costs		Principal Amount, Net		Principal Amount		Unamortized Deferred Financing Costs		Principal Amount, Net
	(in thousands)
6.125% Senior Notes due 2022	$	212,403	$	743	$	211,660	$	212,403	$	855	$	211,548
5.0% Senior Notes due 2024	277,034		1,448		275,586		277,034		1,576		275,458
5.625% Senior Notes due 2025	349,118		2,634		346,484		349,118		2,792		346,326
6.75% Senior Notes due 2026	419,235		3,795		415,440		419,235		3,970		415,265
6.625% Senior Notes due 2027	416,791		4,532		412,259		416,791		4,725		412,066
Total	$	1,674,581	$	13,152	$	1,661,429	$	1,674,581	$	13,918	$	1,660,663

The senior unsecured notes listed above (collectively referred to as “Senior Unsecured Notes,” and together with the Senior Secured Notes, “Senior Notes”) are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and any future unsecured senior debt and are senior in right of payment to any future subordinated debt. The Company may redeem some or all of its Senior Unsecured Notes prior to their maturity at redemption prices based on a premium, plus accrued and unpaid interest as described in the indentures governing the Senior Unsecured Notes.

During the three months ended March 31, 2020, the Company repurchased a total of $40.7 million in aggregate principal amount of its 2022 Senior Notes in open market transactions for a total settlement amount, excluding accrued interest, of $28.3 million. In connection with the repurchase, the Company recorded a gain on extinguishment of debt of $12.2 million for the three months ended March 31, 2020. This amount included discounts realized upon repurchase of $12.4 million partially offset by approximately $235,000 of accelerated unamortized deferred financing costs. The Company canceled all repurchased 2022 Senior Notes upon settlement.

Please refer to Note 5 - Long-Term Debt in the 2020 Form 10-K for additional detail on the Company’s Senior Unsecured Notes.

Covenants

The Company is subject to certain financial and non-financial covenants under the Credit Agreement and the indentures governing the Senior Notes that, among other terms, limit the Company’s ability to incur additional indebtedness, make restricted payments including dividends, sell assets, with respect to the Company’s restricted subsidiaries, permit the consensual restriction on the ability of such restricted subsidiaries to pay dividends or indebtedness owing to the Company or to any other restricted subsidiaries, create liens that secure debt, enter into transactions with affiliates, and merge or consolidate with another company. The Company was in compliance with all covenants under the Credit Agreement and the indentures governing the Senior Notes as of March 31, 2021, and through the filing of this report.

Please refer to Note 5 - Long-Term Debt in the 2020 Form 10-K for additional detail on the Company’s covenants under the Credit Agreement and indentures governing the Senior Notes.

Capitalized Interest

Capitalized interest costs totaled $4.3 million and $2.7 million for the three months ended March 31, 2021, and 2020, respectively. The amount of interest the Company capitalizes generally fluctuates based on the amount borrowed, the Company’s capital program, and the timing and amount of costs associated with capital projects that are considered in progress. Capitalized interest costs are included in total costs incurred.