SENIOR NOTES

On May 31, 2018, we completed the issuance of $325.0 million in aggregate principal amount of our Senior Notes and related guarantees in a private offering under Rule 144A and Regulation S of the Securities Act.

We received proceeds of $320.1 million, net of a 1.5% debt discount of $4.9 million, of which we used $291.4 million to repay our existing indebtedness under our Former Credit Agreement. We incurred $1.4 million in transaction costs related to the Senior Notes. See Note 12 to the Consolidated Financial Statements included herein for further discussion of the repayment of our Former Credit Agreement.

The Senior Notes bear interest at 6.625% per year. Interest on the Senior Notes began to accrue on May 31, 2018 and is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2018 to holders of record on each May 15 and November 15 preceding an interest payment date. The Senior Notes mature on June 1, 2026, unless earlier redeemed or purchased. The Senior Notes are unsecured, senior obligations and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by certain of our existing subsidiaries.

The debt discount of $4.9 million and the debt issuance costs of $1.4 million are being amortized using the effective interest method over the remaining term of 80 months of the Senior Notes. The effective interest rate on the unamortized debt discount for both the three and nine months ended September 30, 2018 and 2019 was 6.87%. The effective interest rate on the unamortized debt issuance costs for both the three and nine months ended September 30, 2018 and 2019 was 6.69%.

The carrying value of the Senior Notes at December 31, 2018 and September 30, 2019 is reflected on our Consolidated Balance Sheet as follows (in thousands):



	December 31, 2018			September 30, 2019
Long-term liabilities:
Principal amount	$	325,000		$	325,000
Debt discount, net of accumulated amortization of $273 and $639, respectively	(4,602		)	(4,236		)
Debt issuance costs, net of accumulated amortization of $77 and $180, respectively	(1,290		)	(1,187		)
Carrying value of the Senior Notes	$	319,108		$	319,577

The fair value of the Senior Notes, which are Level 2 measurements, was $334.0 million at September 30, 2019.

Interest expense on the Senior Notes included contractual coupon interest expense of $5.4 million for both the three months ended September 30, 2018 and 2019 and $7.2 million and $16.1 million for the nine months ended September 30, 2018 and 2019, respectively. Amortization of the debt discount on the Senior Notes was $116,000 and $124,000 for the three months ended September 30, 2018 and 2019, respectively and $154,000 and $366,000 for the nine months ended September 30, 2018 and 2019, respectively. Amortization of debt issuance costs on the Senior Notes was $33,000 and $35,000 for the three months ended September 30, 2018 and 2019, respectively and $44,000 and $103,000 for the nine months ended September 30, 2018 and 2019, respectively.