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Convertible Senior Notes | 9 Months Ended
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Sep. 30, 2017
Convertible Senior Notes | Note 6 — Convertible Senior Notes In July 2013, the Company sold an aggregate of $100.0 million principal amount of 4.25% Convertible Senior Notes due 2018 (the “2018 Notes”). The 2018 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on August 1 and February 1 of each year at a rate of 4.25% per annum and will mature on August 1, 2018. The initial and still current conversion rate for the 2018 Notes is 114.3674 shares of JAKKS common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $8.74 per share of common stock, subject to adjustment in certain events. Upon conversion, the 2018 Notes will be settled in shares of the Company’s common stock. Holders of the 2018 Notes may require that the Company repurchase for cash all or some of their notes upon the occurrence of a fundamental change (as defined in the 2018 Notes). In 2016, the Company repurchased and retired an aggregate of approximately $6.1 million principal amount of the 2018 Notes. In addition, approximately $0.1 million of the unamortized debt issuance costs were written off and a nominal gain was recognized in conjunction with the retirement of the 2018 Notes. During the first quarter of 2017, the Company exchanged and retired $39.1 million principal amount of the 2018 Notes at par for $24.1 million in cash and approximately 2.9 million shares of its common stock. During the second quarter of 2017, the Company exchanged and retired $12.0 million principal amount of the 2018 Notes at par for $11.6 million in cash and 112,400 shares of its common stock, and approximately $0.1 million of the unamortized debt issuance costs were written off and a $0.1 million gain was recognized in conjunction with the exchange and retirement of the 2018 Notes. In August 2017, the Company agreed with Oasis Management and Oasis Investments II Master Fund Ltd., the holder of approximately $21.5 million face amount of its 4.25% Convertible Senior Notes due in 2018, to extend the maturity date of these notes to November 1, 2020. In addition, the interest rate was reduced to 3.25% per annum and the conversion rate was increased to 328.0302 shares of the Company's common stock per $1,000 principal amount of notes, among other things. After execution of a definitive agreement for the modification and final approval by the other members of the Company's Board of Directors and Oasis' Investment Committee the transaction closed on November 7, 2017. Accordingly, as this debt was refinanced after September 30, 2017 however prior to the report issuance date of November 9, 2017, this $21.5 million has been classified as long term debt with the remaining principal amount of $21.2 million classified as short term debt. In June 2014, the Company sold an aggregate of $115.0 million principal amount of 4.875% Convertible Senior Notes due 2020 (the “2020 Notes”). The 2020 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on June 1 and December 1 of each year at a rate of 4.875% per annum and will mature on June 1, 2020. The initial and still current conversion rate for the 2020 Notes is 103.7613 shares of the Company’s common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $9.64 per share of common stock, subject to adjustment in certain events. Upon conversion, the 2020 Notes will be settled in shares of the Company’s common stock. Holders of the 2020 Notes may require that the Company repurchase for cash all or some of their notes upon the occurrence of a fundamental change (as defined in the 2020 Notes). In January 2016, the Company repurchased and retired an aggregate of $2.0 million principal amount of the 2020 Notes. In addition, approximately $0.1 million of the unamortized debt issuance costs were written off and a $0.1 million gain was recognized in conjunction with the retirement of the 2020 Notes. The fair value of the 2018 Notes as of September 30, 2017 and December 31, 2016 was approximately $41.4 million and $83.7 million, respectively, based upon the most recent quoted market price. The fair value of the 2020 Notes as of September 30, 2017 and December 31, 2016 was approximately $88.6 million and $89.3 million, respectively, based upon the most recent quoted market price. The fair value of the convertible senior notes is considered to be a Level 2 measurement on the fair value hierarchy. Convertible senior notes consist of the following (in thousands):
|  | September 30, 2017 |  |  | December 31, 2016 |
|  | Principal Amount |  |  | Debt Issuance Costs |  |  | Net Amount |  |  | Principal Amount |  |  | Debt Issuance Costs |  |  | Net Amount |
4.25% convertible senior notes (due 2018) |  | $ | 42,728 |  |  | $ | 298 |  |  | $ | 42,430 |  |  | $ | 93,865 |  |  | $ | 1,098 |  |  | $ | 92,767 |
4.875% convertible senior notes (due 2020) |  |  | 113,000 |  |  |  | 2,169 |  |  |  | 110,831 |  |  |  | 113,000 |  |  |  | 2,760 |  |  |  | 110,240 |
Total |  | $ | 155,728 |  |  | $ | 2,467 |  |  | $ | 153,261 |  |  | $ | 206,865 |  |  | $ | 3,858 |  |  | $ | 203,007 |
Amortization expense classified as interest expense related to debt issuance costs was $0.4 million and $0.4 million for the three months ended September 30, 2017 and 2016, respectively, and $1.5 million and $1.5 million for the nine months ended September 30, 2017 and 2016, respectively.

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- Definition Convertible Senior Debentures Disclosure. + References No definition available. + Details
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