) LONG-TERM DEBT

Our long-term debt at September 30, 2015 and December 31, 2014 consisted of the following:

	September 30, 2015		December 31, 2014
	(In thousands)
Senior Notes Due 2022	$	500,000	$	500,000
Multicurrency Facility Agreement		23,000		44,000
		523,000		544,000
Debt Premium		638		732
Total	$	523,638	$	544,732

The following is a summary of scheduled debt maturities by year:

Year	Debt Maturity
	(In thousands)
2015	$	-
2016		-
2017		-
2018		-
2019		23,000
Thereafter		500,000
Total	$	523,000

Senior Notes Due 2022

On March 12, 2012, we issued $300.0

million aggregate principal amount of 6.375% senior notes due 2022. On December 5, 2012, we issued an additional $200.0

million of senior notes with substantially the same terms as the previous $300.0

million issuance (together with the original issue, the “Senior Notes”). The Senior Notes pay interest semi-annually on March 15 and September 15. Prior to March 15, 2017, we may redeem some or all of the Senior Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. The make-whole premium is based on U.S. treasuries plus 50 basis points. On and after March 15, 2017, we may redeem some or all of the Senior Notes at the redemption prices (expressed as percentages of principal amount) equal to 103.188% for the twelve-month period beginning March 15, 2017, 102.125% for the twelve-month period beginning March 15, 2018, 101.063% for the twelve-month period beginning March 15, 2019 and 100.000% beginning March 15, 2020, plus accrued and unpaid interest to the redemption date. In conjunction with the Senior Notes offering, we incurred $12.7

million in debt issuance costs which are included in our balance sheet under deferred costs and other assets and are being amortized into interest cost over the life of the Senior Notes using the effective interest method.

At September 30, 2015, the fair value of the Senior Notes, based on quoted market prices, was approximately $306.3

million, compared to a carrying amount of $500.6

million.

Multicurrency Facility Agreement

On September 26, 2014, we entered into a Multicurrency Facility Agreement (the “Multicurrency Facility Agreement”) among us, as guarantor, one of our indirect wholly-owned subsidiaries, as borrower (the “Borrower”), and a group of financial institutions, as lenders (the “Lenders”). This facility has a scheduled maturity date of September 26, 2019 and commits the Lenders to provide revolving loans up to $300.0 million at any one time outstanding, subject to certain terms and conditions, and contains sublimits for swingline loans and the issuance of letters of credit. The Borrower has the option to request increases in the aggregate commitments under the facility to an aggregate principal amount not to exceed $400.0 million, also subject to certain terms and conditions. Revolving loans under the Multicurrency Facility Agreement will accrue interest at LIBOR, plus an applicable margin, and swingline loans will accrue interest at the alternate base rate margin. The applicable margin will be based on our most recent capitalization ratio. The fee for unused commitments is 37.5 basis points per annum.

In February 2015, we entered into an amendment to the Multicurrency Facility Agreement that reduced the requirement under the interest coverage ratio covenant. In return for the reduction, the Lenders imposed certain financial restrictions, including limiting our ability make certain payments for dividends, acquisitions or share repurchases. We paid an additional $1.0 million in fees and our unused commitment fee rate increased to 50 basis points.

In July 2015, we entered into an amendment to the Multicurrency Facility Agreement that, among other changes, (a) reduced the interest coverage ratio requirements applicable to certain periods, (b) changed the required collateral to lenders’ commitments ratio for certain periods, (c) added a new mechanism for curing defaults on financial covenants and (d) removed a requirement that we take delivery of certain vessels. In return for the amendment, the lenders required that we agree to certain changes, including (u) increasing the commitment fee during certain periods to 75 basis points, (v) reducing commitments under the facility from $300.0 million to $200.0 million, (w) increasing the rate of interest accruing under the facility to LIBOR plus a margin, which is currently 2.75%, (x) adding a new covenant that liquidity not be less than $50.0 million, (y) reducing the amounts of business acquisitions, collateral dispositions, capital expenditures, joint ventures, distributions to equity holders and indebtedness permitted during certain periods and (z) subjecting certain affiliate parties that are not obligors to the Multicurrency Facility Agreement’s limitations on business acquisitions, capital expenditures and joint ventures during certain periods. We paid an additional $1.0 million in fees to close this amendment which is being capitalized and amortized over the remaining term of the Multicurrency Facility Agreement. In addition, since we reduced our overall borrowing capacity under the Multicurrency Facility Agreement, we were required to expense a portion of the debt issue costs that were being deferred on our consolidated balance sheet. In conjunction with closing the amendment, we charged $1.8 million to interest expense in the third quarter of 2015.

We have unamortized fees paid to the arrangers, the agent and the security trustee totaling $4.4 million at September 30, 2015, which fees are being amortized into interest cost on a straight-line basis over the life of the Multicurrency Facility Agreement. The weighted average interest rate applicable to amounts outstanding at September 30, 2015 was 2.95%.

The Multicurrency Facility Agreement, as amended, is secured by certain vessels of the Borrower. The collateral that secures the loans under the Multicurrency Facility Agreement may also secure all of the Borrower’s obligations under any hedging agreements between the Borrower and any Lender or other hedge counterparty to the Multicurrency Facility Agreement.

We unconditionally guaranteed all existing and future indebtedness and liabilities of the Borrower arising under the Multicurrency Facility Agreement and other related loan documents. Such guarantee may also cover obligations of the Borrower arising under any hedging arrangements. The Multicurrency Facility Agreement is subject to certain financial covenants. At September 30, 2015, we were in compliance with all the covenants and had $23.0 million borrowed and outstanding. The unused borrowing capacity under the Multicurrency Facility Agreement, after giving effect to standby letters of credit, was $175.1 million.

If the current industry conditions remain the same, it is possible that we will not be in compliance with certain covenants by mid-year 2016. We intend to work with the Lenders to negotiate amendments or waivers, if required, before we actually breach any covenants. A likely result of any amendment or waiver would be additional restrictions from the Lenders and a potential reduction in the amounts available for borrowing under the facility. There can be no assurance that we would be able to negotiate acceptable terms in the facility agreements should a breach occur.

Norwegian Facility Agreement

On June 20, 2013, we entered into an amendment to our December 27, 2012 agreement (the “Norwegian Facility Agreement”) among us, as guarantor, one of our indirect wholly-owned subsidiaries, as borrower (the “Norwegian Borrower”), and a Norwegian bank as lead lender (the “Norwegian Lender”). The amendment was established to adjust certain covenants and to allow us to begin to draw on available credit. The Norwegian Facility Agreement has a scheduled maturity date of September 30, 2017 and commits the Norwegian Lender to provide loans up to an aggregate principal amount of 600.0 million NOK (approximately $70.4 million at September 30, 2015) at any one time outstanding, subject to certain terms and conditions. We paid fees to the Norwegian Lender totaling $1.3 million, which are being amortized into interest cost over the life of the Norwegian Facility Agreement using the effective interest method. On October 23, 2014, we entered into an additional amendment to the Norwegian Facility Agreement which extended the scheduled maturity date from September 30, 2017 to September 30, 2019 and revised certain financial covenants. Loans under the Norwegian Facility Agreement accrue interest at Norwegian InterBank Offered Rate, plus an applicable margin based on our capitalization ratio. The fee for unused commitments is 50 basis points per annum.

In February 2015, we entered into an amendment to the Norwegian Facility Agreement that reduced the requirement under the covenant governing the interest coverage ratio. In return for the reduction, the lenders required that we agree to certain financial restrictions, including limiting our ability make certain payments for dividends, acquisitions or share repurchases. We paid an additional $0.2 million in fees.

In July 2015, we entered into an amendment to the Norwegian Facility Agreement that, among other changes, (a) modified the interest coverage ratio requirements applicable to certain periods to conform to the interest coverage ratio requirements applicable to the same periods as set forth in the Multicurrency Facility Agreement, as amended and described above, (b) added a new covenant that liquidity not be less than $50.0 million and (c) increased the commitment fee. The borrowing capacity under Norwegian Facility Agreement did not change. We paid an additional $0.1 million in fees. Our unused commitment fee rate increased to 65 basis points.

The Norwegian Facility Agreement, as amended, is secured by certain vessels of the Norwegian Borrower. The collateral that secures the loans under the Norwegian Facility Agreement may also secure all of the Norwegian Borrower’s obligations under any hedging agreements between the Norwegian Borrower and the Norwegian Lender or other hedge counterparty to the Norwegian Facility Agreement.

We unconditionally guaranteed all existing and future indebtedness and liabilities of the Norwegian Borrower arising under the Norwegian Facility Agreement and other related loan documents. Such guarantee may also cover obligations of the Norwegian Borrower arising under any hedging arrangements described above. The Norwegian Facility Agreement is subject to certain financial covenants. At September 30, 2015, we had no amounts borrowed and outstanding and were in compliance with all the covenants under this agreement.

If the current industry conditions remain the same, it is possible that we will not be in compliance with certain covenants by mid-year 2016. We intend to work with the Lenders to negotiate an amendments or waivers, if required, before we actually breach any covenants. A likely result of any amendment or waiver would be additional restrictions from the Lenders and a potential reduction in the amounts available for borrowing under the facility. There can be no assurance that we would be able to negotiate acceptable terms in the facility agreements should a breach occur.