Debt

6 Months Ended

Jun. 30, 2011

6. DEBT

Debt consisted of the following (dollars in thousands):


	June 30,		December 31,
	2011		2010
Bank credit facility	$	1,250,400	$	1,169,000
9 ¹/₈% senior notes due 2019		350,000		350,000

	$	1,600,400	$	1,519,000
Less: Current portion		12,000		12,000

Total long-term debt	$	1,588,400	$	1,507,000

Bank Credit Facility

As of June 30, 2011, we maintained a $1.467 billion bank credit facility (the “credit facility”), comprised of:

•

$304.2 million of revolving credit commitments, which expire in the amounts of $79.0 million and $225.2 million on September 30, 2011 and December 31, 2014, respectively;

•

$620.8 million of outstanding Term Loan C borrowings, which mature on January 31, 2015;

•

$294.8 million of outstanding Term Loan D borrowings, which mature on March 31, 2017; and

•

$247.5 million of outstanding Term Loan E borrowings, which mature on October 23, 2017.

As of June 30, 2011, we had $207.4 million of unused revolving credit commitments, after giving effect to $87.4 million of outstanding loans and $9.4 million of letters of credit issued to various parties as collateral, all of which were unused and available to be borrowed and used for general corporate purposes.

The credit agreement governing the credit facility requires us to maintain a senior leverage ratio (as defined) of no more than 6.0 to 1.0 and an interest coverage ratio (as defined) of no less than 2.0 to 1.0. For all periods through June 30, 2011, we were in compliance with all of the covenants under the credit agreement and, as of June 30, 2011, our senior leverage ratio and interest coverage ratio were 4.4 to 1.0 and 2.8 to 1.0, respectively.

Interest Rate Exchange Agreements

We use interest rate exchange agreements, or interest rate swaps, with various banks that fixes the variable portion of borrowings under the credit facility. We believe this reduces the potential volatility in our interest expense that would otherwise result from changes in market interest rates. Our interest rate swaps have not been designated as hedges for accounting purposes, and have been accounted for on a mark-to-market basis as of, and for, the three and six months ended June 30, 2011, and 2010. As of June 30, 2011:

•

We had current interest rate swaps which fix the variable portion of $700 million of borrowings under the credit facility at a rate of 2.9%. Our current interest rate swaps are scheduled to expire in the amounts of $100 million, $400 million and $200 million during the years ending December 31, 2011, 2012 and 2014, respectively; and

•

We had forward-starting interest rate swaps which will fix the variable portion of $600 million of borrowings under the credit facility at a rate of 3.0%. Our forward-starting interest rate swaps are scheduled to commence in the amounts of $100 million, $400 million and $100 million during the years ending December 31, 2011, 2012 and 2014, respectively.

As of June 30, 2011, the average interest rate on outstanding borrowings under the credit facility, including the effect of our interest rate swaps, was 4.9%, as compared to 5.2% as of the same date last year.

Senior Notes

As of June 30, 2011, we had $350.0 million of senior notes outstanding. The indenture governing our senior notes requires a total leverage ratio (as defined) of no more than 8.5 to 1.0. As of June 30, 2011, we were in compliance with all of the covenants under the indenture, and our total leverage ratio was 5.8 to 1.0.

Debt Ratings

Our future access to the debt markets and the terms and conditions we receive are influenced by our debt ratings. Our corporate credit ratings are B1, with a stable outlook, by Moody’s, and B+, with a stable outlook, by Standard and Poor’s. Any future downgrade to our credit ratings could result in higher interest rates on future debt issuance than we currently experience, or adversely impact our ability to raise additional funds.

There are no covenants, events of default, borrowing conditions or other terms in our credit agreement or senior note indenture that are based on changes in our credit rating assigned by any rating agency.

Fair Value

As of June 30, 2011, the fair values of our senior notes and outstanding debt under our credit facility are as follows (dollars in thousands):


9¹/₈% senior notes due 2019	$	371,000


Bank credit facility	$	1,217,757