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Debt | 12 Months Ended
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Dec. 31, 2020
Debt |
Debt | Note 10 Debt ​ Debt consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31, |
​ |  | 2020 |  | 2019 |
​ | ​ | (In thousands) |
5.00% senior notes due September 2020 (1) | ​ | $ | — | ​ | $ | 282,046 | ​
4.625% senior notes due September 2021 (2) | ​ |  | 86,329 | ​ |  | 634,588 | ​
5.50% senior notes due January 2023 | ​ |  | 28,443 | ​ |  | 501,003 | ​
5.10% senior notes due September 2023 | ​ |  | 121,077 | ​ |  | 336,810 | ​
0.75% senior exchangeable notes due January 2024 | ​ |  | 279,700 | ​ |  | 472,603 | ​
5.75% senior notes due February 2025 | ​ | ​ | 610,818 | ​ |  | 781,502 | ​
6.50% senior priority guaranteed notes due February 2025 | ​ |  | 50,485 | ​ | ​ | — | ​
9.00% senior priority guaranteed notes due February 2025 | ​ | ​ | 192,032 | ​ | ​ | — | ​
7.25% senior guaranteed notes due January 2026 | ​ | ​ | 559,978 | ​ |  | — | ​
7.50% senior guaranteed notes due January 2028 | ​ | ​ | 389,609 | ​ |  | — | ​
2012 revolving credit facility (1) | ​ |  | — | ​ | ​ | 355,000 | ​
2018 revolving credit facility | ​ |  | 672,500 | ​ | ​ | — | ​
​ | ​ | ​ | 2,990,971 | ​ | ​ | 3,363,552 | ​
Less: deferred financing costs | ​ | ​ | 22,270 | ​ | ​ | 30,332 | ​
Long-term debt | ​ | $ | 2,968,701 | ​ | $ | 3,333,220 | ​
​
(1) | The 5.00% senior notes due September 2020 and 2012 Revolving Credit Facility were classified as long-term as of December 31, 2019 because we had the ability and intent to repay these obligations utilizing our 2018 Revolving Credit Facility.
​
(2) | The 4.625% senior notes due September 2021 are classified as long-term because we have the ability and intent to repay this obligation utilizing our 2018 Revolving Credit Facility.
​ As of December 31, 2020, the principal amount and maturities of our primary debt for each of the five years after 2020 and thereafter are as follows: ​
​ | ​ | ​ | ​ | ​
​ |  | Paid at Maturity |
​ | ​ | (In thousands) |
2021 | ​ | $ | 86,500 | (1)
2022 | ​ |  | — | ​
2023 | ​ |  | 822,361 | (2)
2024 | ​ |  | 324,322 | (3)
2025 | ​ |  | 853,335 | (4)
Thereafter | ​ |  | 949,587 | (5)
​ | ​ | $ | 3,036,105 | ​
(1) | Represents our 4.625% senior notes due September 2021.
​
(2) | Represents our 5.50% senior notes due January 2023, 5.10% senior notes due September 2023 and our 2018 Revolving Credit Facility due October 2023.
​
(3) | Represents our 0.75% senior notes due January 2024.
​
(4) | Represents our 5.75% senior notes due February 2025, 6.5% senior priority guaranteed notes due February 2025 and our 9.0% senior priority guaranteed notes due February 2025.
​
(5) | Represents our 7.25% senior notes due January 2026 and our 7.50% senior notes due January 2028.
​ Nabors Delaware’s various fixed rate debt securities comprised of our 4.625%, 5.50%, 5.10%, and 5.75% senior unsecured notes are fully and unconditionally guaranteed by us. The notes rank equal in right of payment to all Nabors Delaware’s existing and future senior unsubordinated debt. The notes rank senior in right of payment to all Nabors Delaware’s existing and future senior subordinated and subordinated debt. Our guarantee of the notes is unsecured and ranks equal in right of payment to all our unsecured and unsubordinated indebtedness from time to time outstanding. The notes are subject to redemption by Nabors Delaware, in whole or in part, at any time generally at a redemption price equal to the greater of (i) 100% of the principal amount of the notes then outstanding to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of principal and interest, determined in the manner set forth in the applicable indenture. In the event of a change in control triggering event, as defined in the indenture, the holders of notes may require Nabors Delaware to purchase all or any part of each note in cash equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase, except to the extent Nabors Delaware has exercised its right to redeem the notes. The notes have customary covenants, including limitations on the incurrence of liens and entering into sale and leaseback transactions as well as customary events of default. ​ During 2020, the proceeds from the 7.25% and 7.50% Senior Guaranteed Notes Due January 2026 and 2028 offering were primarily used to repurchase $952.9 million aggregate principal amount of certain of Nabors Delaware’s senior notes that were tendered in the January 2020 Tender Offers pursuant to an offer to purchase and consent solicitation. The aggregate principal amount repurchased included approximately (i)$407.7 million of our 5.50% senior notes due 2023, (ii) $379.7 million of our 4.625% senior notes due 2021 and (iii) $165.5 million of our 5.10% senior notes due 2023. In connection with the January 2020 Tender Offers, we recognized a net loss of $2.7 million. ​ During 2020, 2019 and 2018, we repurchased $372.0 million (excluding the January 2020 Tender Offers), $468.3 million, and $873.0 million aggregate principal amount of our senior unsecured notes for approximately $300.9 million, $461.1 million and $906.5 million, respectively, in cash, reflecting principal, accrued and unpaid interest. In connection with such repurchases, during 2020 and 2019, we recognized a net gain of approximately $69.2 million and $11.5 million, respectively. During 2018, we recognized net losses of approximately $5.3 million, which represents the premiums paid in connection with these repurchases or redemptions. In January 2021, we repurchased $23.0 million aggregate principal amount of debt for approximately $15.1 million. ​ ​ ​ ​ Exchange Transactions ​ During the fourth quarter of 2020, we entered into a series of public and private exchange transactions in which Nabors Delaware exchanged newly issued 6.5% Senior Priority Guaranteed Notes due 2025 (the “6.5% Exchange Notes”) and 9.0% Senior Priority Guaranteed Notes due 2025 (the “9.0% Exchange Notes,” and collectively, the “Exchange Notes”) for various amounts of existing outstanding notes. Nabors Delaware did not receive any cash proceeds from the issuance of the Exchange Notes. ​ Collectively from the series of exchanges, Nabors Industries, Inc. issued $50.5 million aggregate principal amount of the 6.5% Exchange Notes and $192.0 million aggregate principal amount of new 9.0% Exchange Notes in exchange for $526.8 million aggregate principal amount of various Nabors Delaware’s outstanding Notes. ​ We recorded a gain of $161.8 million in connection with the Exchange Transactions, which was accounted for in accordance with ASC 470-60, Troubled Debt Restructuring by Debtors. Under ASC 470-60, a gain is recorded in an amount equal to the sum of the future undiscounted payments (principal and interest) related to the new Exchange Notes plus the costs incurred in connection with the transaction, less the carrying value of the notes that were exchanged. In relation to the transactions, we recorded $71.6 million related to future contractual interest payments on the new Exchange Notes, and have included this amount in accrued liabilities and other long-term liabilities. ​ The aggregate principal amounts and recognized gain for such transactions were as follows (in thousands): ​
​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ |  | 2020
Exchanged: | ​ | ​
4.625% senior notes due September 2021 | ​ | $ | 38,209
5.50% senior notes due January 2023 | ​ | ​ | 3,733
5.10% senior notes due September 2023 | ​ |  | 19,422
0.75% senior exchangeable notes due January 2024 | ​ |  | 250,678
5.75% senior notes due February 2025 | ​ |  | 164,368
7.25% senior guaranteed notes due January 2026 | ​ |  | 40,022
7.50% senior guaranteed notes due January 2028 | ​ | ​ | 10,391
Aggregate principal amount exchanged | ​ |  | 526,823
Aggregate principal amount of debt issued in exchanges | ​ | ​ | 242,517
Aggregated net gain (loss) | ​ | ​ | 161,808
Per share amount of the aggregate gain | ​ | ​ | 19.30
​ In January 2021, Nabors Delaware completed additional exchange transactions whereby (i) $35.0 million aggregate principal amount of its 0.75% Exchangeable Notes and (ii) $5.0 million of its 5.75% Senior Notes were exchanged for an additional issuance of $26.05 million of 9.0% Exchange Notes. ​ 6.50% and 9.00% Senior Priority Guaranteed Notes due February 2025 ​ In connection with the exchange transactions discussed above, in the fourth quarter of 2020, Nabors Delaware issued $50.5 million aggregate principal amount of 6.5% Exchange Notes in a private exchange transaction in exchange for $115.0 million aggregate principal amount of Nabors Delaware’s outstanding 0.75% Exchangeable Notes and $192.0 million aggregate principal amount of 9.0% Exchange Notes in a public exchange transaction in exchange for $411.8 million aggregate principal amount of various series of our and Nabors Delaware’s outstanding debt securites. The Exchange Notes are guaranteed by (i) the Company, (ii) each of the subsidiaries of the Company that guarantee the 2026/2028 Notes and (iii) certain lower tier subsidiaries of the Company that guarantee Nabors Delaware’s 2018 Revolving Credit Facility. The guarantees of the Exchange Notes by the Lower Tier Guarantors are contractually subordinate in right of payment to such subsidiaries’ guarantee of certain senior guaranteed debt, including obligations under our 2018 Revolving Credit Facility. ​ Nabors Delaware did not receive any cash proceeds from the issuance of the Exchange Notes. The Exchange Notes bear interest at an annual rate of 9.0% and will mature on February 1, 2025. ​ In January 2021, Nabors Delaware completed additional exchange transactions whereby $35 million aggregate principal amount of its 0.75% Exchangeable Notes and $5 million of its 5.75% Senior Notes were exchanged for $26.05 million of the 9.0% Exchange Notes. ​ 7.25% and 7.50% Senior Guaranteed Notes Due January 2026 and 2028 ​ In January 2020, Nabors completed a private placement of $600.0 million aggregate principal amount of the 2026 Notes and $400.0 million aggregate principal amount of the 2028 Notes (collectively the “2026/2028 Notes”). The 2026/2028 Notes bear interest at an annual rate of 7.25% and 7.50%, respectively. The 2026/2028 Notes are fully and unconditionally guaranteed by the 2026/2028 Notes Guarantors. ​ 0.75% Senior Exchangeable Notes Due January 2024 ​ In January 2017, Nabors Delaware issued $575.0 million in aggregate principal amount of 0.75% exchangeable senior unsecured notes due 2024, which are fully and unconditionally guaranteed by Nabors. The notes bear interest at a rate of 0.75% per year payable semiannually on January 15 and July 15 of each year, beginning on July 15, 2017. The exchangeable notes are bifurcated for accounting purposes into debt and equity components of $411.2 million and $163.8 million, respectively, based on the relative fair value at the issuance date. ​ The exchangeable notes are exchangeable, under certain conditions, at an initial exchange rate of .795 common shares of Nabors per $1,000 principal amount of exchangeable notes (equivalent to an initial exchange price of approximately $1,257.81 per common share). Upon any exchange, Nabors Delaware will settle its exchange obligation in cash. ​ In connection with the Exchange Transactions, approximately $250.7 million of the aggregate principal amount of the exchangeable notes were exchanged for new Exchange Notes, leaving approximately $324.3 million in aggregate principal amount outstanding as of December 31, 2020. ​ 2018 Revolving Credit Facility ​ In October 2018, Nabors Delaware and Nabors Drilling Canada Limited (“Nabors Canada” and together with Nabors Delaware, the “Borrowers”) entered into a credit agreement dated October 11, 2018 by and among the Borrowers, the Guarantors identified therein, HSBC Bank Canada, as the Canadian lender (the “Canadian Lender”) the issuing banks and other lenders party thereto (the “US Lenders” and, together with the Canadian Lender, the “Lenders”) and Citibank, N.A., as administrative agent solely for the U.S. Lenders (as may be amended, restated, supplemented or otherwise modified from time to time, the “2018 Revolving Credit Facility”). The 2018 Revolving Credit Facility originally had a borrowing capacity of $1.267 billion and is fully and unconditionally guaranteed by Nabors and certain of its wholly owned subsidiaries. The 2018 Revolving Credit Facility matures at the earlier of (a) October 11, 2023 and (b) July 19, 2022, if any of Nabors Delaware’s existing 5.50% senior notes due January 2023 remain outstanding as of such date. The 2018 Revolving Credit Facility contains certain affirmative and negative covenants. Amendment No. 1 to the 2018 Revolving Credit Facility provided for additional currencies in which letters of credit could be issued. On December 13, 2019, Amendment No. 2 was entered into which reduced the borrowing capacity to $1.0136 ($981.6 million for Nabors Delaware and $32.0 million for Nabors Canada), and replaced the net funded debt to capitalization covenant with a covenant to maintain net funded indebtedness at no greater than 5.5 times EBITDA. Amendment No. 3 to the 2018 Revolving Credit Facility was entered into on March 3, 2020, in order to permit letters of credit from the Canadian Lender on the portion of the facility dedicated to Canadian borrowings. ​ In September 2020, Amendment No. 4 was entered into in order to revise certain of the covenant and collateral requirements under the 2018 Revolving Credit Facility. Amendment No. 4 provides the Lenders with a first lien security interest in certain drilling rigs located in the U.S. and Canada and replaces the existing covenant to maintain net funded debt at no greater than 5.5 times EBITDA with a new covenant to maintain minimum liquidity of no less than $160.0 million at any time. Minimum liquidity is defined to mean, generally, a consolidated cash balance consisting of (a) the aggregate amount of unrestricted cash and cash equivalents maintained in a deposit account U.S. or Canadian branch of a commercial bank, plus (b) the lesser of $75 million or an amount equal to 75% of the aggregate amount of unrestricted cash and cash equivalents held in deposit account of a commercial bank outside of the U.S. or Canada, plus (c) available commitments under the 2018 Revolving Credit Facility. Additionally, the “asset to debt coverage” ratio was revised such that during any period in which Nabors Delaware fails to maintain an investment grade rating from at least two ratings agencies, the guarantors under the facility and their respective subsidiaries will be required to maintain an asset to debt coverage of at least 4.25:1, which was the case as of the date of this report. As of December 31, 2020, we had $672.5 million outstanding under our 2018 Revolving Credit Facility and the net book value of the collateralized assets under the 2018 Revolving Credit Facility was $1.3 billion. The weighted average interest rate on borrowings under the 2018 Revolving Credit Facility at December 31, 2020 was 3.53%. In order to make any future borrowings under the 2018 Revolving Credit Facility, Nabors and certain of its wholly owned subsidiaries are subject to compliance with the conditions and covenants contained therein, including compliance with applicable financial ratios. ​ As of the date of this report, we were in compliance with all covenants under the 2018 Revolving Credit Facility. We expect to remain in compliance with all covenants under the 2018 Revolving Credit Facility during the twelve month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable. ​ 2012 Revolving Credit Facility ​ We repaid all outstanding amounts under the 2012 Revolving Facility in April 2020 and have terminated the facility. ​ Short-Term Borrowings ​ We had 18 letter-of-credit facilities with various banks as of December 31, 2020. Availability and borrowings under our letter-of-credit facilities are as follows: ​
​ | ​ | ​ | ​ | ​
​ |  | December 31, |
​ | ​ | 2020 |
​ | ​ | (In thousands) |
Credit available | ​ | $ | 630,552 | ​
Less: Letters of credit outstanding, inclusive of financial and performance guarantees | ​ |  | 114,984 | ​
Remaining availability | ​ | $ | 515,569 | ​
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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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