Long-term debt

Long-term debt consists of the following at year-end:



	2018			2017
2027 Notes	$	265,000		$	265,000
2023 Notes	348,069			348,069
Capital lease obligations	6,503			4,539
Other long-term borrowings	16,676			22,900
Subtotal	636,248			640,508
Discount on 2023 Notes	(3,156		)	(3,804		)
Premium on 2023 Notes	1,187			1,438
Deferred financing costs	(4,019		)	(4,641		)
Total	630,260			633,501
Current portion of long-term debt	3,836			4,359
Long-term debt, excluding current portion	$	626,424		$	629,142

2027, 2023 and 2016 Notes:

The following table presents additional information related to the 2027, 2023 and 2016 Notes (the "Notes"):



				Principal as of December 31,
	Annual interest rate		Currency	2018		2017		Maturity
2027 Notes	5.875	%	USD	$	265,000	$	265,000	April 4, 2027
2023 Notes	6.625	%	USD	348,069		348,069		September 27, 2023



	Interest Expense (i)						DFC Amortization (i)						Amortization of Discount, net (i)
	2018		2017		2016		2018		2017		2016		2018		2017		2016
2027 Notes	$	15,569	$	11,547	$	—	$	299	$	224	$	—	$	—	$	—	$	—
2023 Notes	23,060		23,885		28,516		323		610		943		397		752		1,157
2016 Notes	—		—		6,668		—		—		391		—		—		(266		)


(i)	These charges are included within "Net interest expense" in the consolidated statements of income.

On July 13, 2011 and April 24, 2012, the Company issued Brazilian reais notes due in 2016 (the "2016 Notes") amounting to BRL 675,000. Periodic payments of principal were not required and interest was paid semi-annually beginning on January 13, 2012. The Company incurred $3,699 of financing costs related to these issuances, which were capitalized as deferred financing costs ("DFC") and were amortized over the life of the notes.

The following table presents information related to the purchase and repayments of the principal of the 2016 Notes:



		Amount
Date	Redemption price	BRL	$
November 25, 2015	93.75%	40,000	9,995
November 30, 2015	93.75%	7,039	1,715
January 29, 2016	97.75%	1,180	288
April 21, 2016	100.00%	421,765	118,797
May 5, 2016	97.00%	4,025	1,106
July 13, 2016	100.00%	200,991	60,965
Total		675,000	192,866

On September 27, 2013, the Company issued senior notes for an aggregate principal amount of $473.8 million, which are due in 2023 (the "2023 Notes"). Periodic payments of principal are not required and interest is paid semi-annually commencing on March 27, 2014. The Company incurred $3,313 of financing costs related to the cash issuance of 2023 Notes, which were capitalized as DFC and are being amortized over the life of the notes.

On June 1, 2016, the Company launched a cash tender offer to purchase $80,000 of its outstanding 2023 Notes, at a redemption price equal to 98%, which expired on June 28, 2016. The holders who tendered their 2023 Notes prior to June 14, received a redemption price equal to 101%. As a consequence of this transaction, the Company redeemed 16.90% of the outstanding principal. The total payment was $80,800 (including $800 of early tender payment) plus accrued and unpaid interest.

2027, 2023 and 2016 Notes (continued):

The results related to the cash tender offer and the accelerated amortization of the related DFC were recognized as interest expense within the consolidated statement of income.

Furthermore, on March 16, 2017, the Company launched another cash tender offer to purchase $80,000 of its outstanding 2023 Notes, at a redemption price equal to 104%, which expired on April 12, 2017. The holders who tendered their 2023 Notes prior to March 29, 2017, received a redemption price equal to 107%. As a consequence of this transaction, the Company redeemed 11.6% of the outstanding principal. The total payment was $48,885 (including $3,187 of early tender payment) plus accrued and unpaid interest. The results related to the cash tender offer and the accelerated amortization of the related DFC were recognized as interest expense within the consolidated statement of income.

In April 2017, the Company issued senior notes for an aggregate principal amount of $265 million, which are due in 2027 (the “2027 Notes”). Periodic payments of principal are not required and interest is paid semi-annually commencing on October 4, 2017. The proceeds from the issuance of the 2027 Notes were used to repay the Secured Loan Agreement, unwind the related derivative instruments (described in Note 13), pay the principal and premium on the 2023 Notes (in connection with the aforementioned tender offer) and for general purposes. The Company incurred $3,001 of financing costs related to the issuance of 2027 Notes, which were capitalized as DFC and are being amortized over the life of the notes.

The Notes are redeemable, in whole or in part, at the option of the Company at any time at the applicable redemption price set forth in the indenture governing them. The Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of the Company’s subsidiaries. The Notes and guarantees (i) are senior unsecured obligations and rank equal in right of payment with all of the Company’s and guarantors’ existing and future senior unsecured indebtedness; (ii) will be effectively junior to all of the Company’s and guarantors’ existing and future secured indebtedness to the extent of the value of the Company’s assets securing that indebtedness; and (iii) are structurally subordinated to all obligations of the Company’s subsidiaries that are not guarantors.

The indenture governing the Notes limits the Company’s and its subsidiaries’ ability to, among other things, (i) create certain liens; (ii) enter into sale and lease-back transactions; and (iii) consolidate, merge or transfer assets. In addition, the indenture governing the 2027 Notes, limits the Company’s and its subsidiaries’ ability to: incur in additional indebtedness and make certain restricted payments, including dividends. These covenants are subject to important qualifications and exceptions. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, and interest on all of the then-outstanding Notes to be due and payable immediately.

The 2023 Notes are listed on the Luxembourg Stock Exchange and trade on the Euro MTF Market.

Secured Loan Agreement

On March 29, 2016, the Company’s Brazilian subsidiary signed a $167,262 Secured Loan Agreement (the "Loan") with five off-shore lenders namely: Citibank N.A., Itaú BBA International plc, Santander (Brasil) S.A., Cayman Islands Branch, Bank of America N.A. and JP Morgan Chase Bank, N.A. Each loan under the agreement bore interest at the following annual interest rates:



Lender		Annual Interest Rate
Citibank N.A.		3M LIBOR + 2.439%
Itaú BBA International plc		5.26%
Banco Santander (Brasil) S.A., Cayman Islands Branch		4.7863%
Bank of America N.A.		3M LIBOR + 4.00%
JP Morgan Chase Bank, N.A.		3M LIBOR + 3.92%

Secured Loan Agreement (continued)

In order to fully convert each loan of the agreement into BRL, the Brazilian subsidiary entered into five cross-currency interest rate swap agreements with the local subsidiaries of the same lenders. Consequently, the loans were fully converted into BRL amounting to BRL 613,850. Refer to Note 13 for more details.

Considering the cross-currency interest rate swap agreements, the final interest rate of the Loan was the Interbank Market reference interest rate (known in Brazil as “CDI”) plus 4.50% per year. Interest payments were made quarterly, beginning June 2016 and principal payments were made semi-annually, beginning September 2017.

The Loan would have matured on March 30, 2020 and periodic payments of principal were required. Prepayments were allowed without penalty. On April 11, 2017, the Company repaid the Loan with a total payment of $169.7 million including the outstanding principal, plus accrued and unpaid interest and certain transaction costs.

The Company incurred $3,243 of financing costs related to the issuance of the Loan, which were capitalized as DFC and were amortized over the life of the Loan. As a consequence of the repayment, the remaining DFC were recognized as interest expense in the consolidated statement of income.

The following table presents information related to the Secured Loan Agreement:



Interest Expense (i) (ii)						DFC Amortization (ii)						Other Costs (ii) (iii)
2018		2017		2016		2018		2017		2016		2018		2017		2016
$	—	$	2,570	$	6,519	$	—	$	3,251	$	814	$	—	$	2,249	$	—


(i)	These charges do not include the effect of the cross-currency interest rate swap agreements mentioned in Note 13, amounting to a loss of $6,921 and $18,177, during fiscal years 2017 and 2016, respectively. Including these effects the total interest cost amounts to $9,491 and $24,696, respectively.


(ii)	These charges are included within "Net interest expense" in the consolidated statement of income.


(iii)	Transaction costs related to the repayment of the Loan.

Other required disclosure

At December 31, 2018, future payments related to the Company’s long-term debt are as follows:



	Principal			Interest			Total
2019	$	3,836		$	40,537		$	44,373
2020	3,355			40,243			43,598
2021	3,298			39,941			43,239
2022	3,493			39,598			43,091
2023	351,074			39,314			390,388
Thereafter	271,192			57,175			328,367
Total payments	636,248			256,808			893,056
Interest	—			(256,808		)	(256,808		)
Discount on 2023 Notes	(3,156		)	—			(3,156		)
Premium on 2023 Notes	1,187			—			1,187
Deferred financing cost	(4,019		)	—			(4,019		)
Long-term debt	$	630,260		$	—		$	630,260