6. DEBT AND LINES OF CREDIT

The Company and its subsidiaries are subject to the following debt arrangements:



	Total Debt Outstanding
	March 31, 2017			December 31, 2016
	(In thousands)
8.75% Notes	$	350,000		$	350,000
Term Loan	323,061			323,883
San Juan Loan	85,410			95,000
WMLP Term Loan	308,116			306,189
Revolver	—			—
WMLP Revolver	—			—
Capital lease obligations	48,592			55,061
Other debt	11,903			16,464
Total debt	1,127,082			1,146,597
Less debt discount and issuance costs, net	(34,940		)	(37,531		)
Less current installments	(72,710		)	(86,272		)
Long-term debt, less current installments	$	1,019,432		$	1,022,794

The following table presents remaining aggregate contractual debt maturities of all long-term debt:



	March 31, 2017
	(In thousands)
2017	$	64,858
2018	328,181
2019	19,415
2020	340,261
2021	22,750
Thereafter	351,617
Total debt	$	1,127,082

Covenant Compliance

Our lending arrangements contain, among other terms, events of default and various affirmative and negative covenants, financial covenants and cross-default provisions. Should we be unable to comply with any future debt-related covenant, we will be required to seek a waiver of such covenant to avoid an event of default. Covenant waivers and modifications may be expensive to obtain, or, potentially, unavailable.

We are in compliance with all covenants and conditions under our debt agreements as of March 31, 2017. Our continuing ability to meet our obligations and comply with these financial covenants depends on our ability to generate adequate cash flows. Based on our quarterly projections, including the impact of lost or diminished coal sales at certain of our mines, we anticipate that we will maintain compliance with the financial covenants and have sufficient liquidity to meet our obligations as they become due within one year after the date of the filing of our Quarterly Report.

8.75% Notes

Pursuant to our senior note indenture, dated as of December 16, 2014, by and among the Company, the guarantors named therein, and U.S. Bank National Association, as trustee and notes collateral agent (the “Indenture”), our senior secured 8.75% Notes mature on January 1, 2022 and pay interest semiannually on January 1 and July 1 of each year at a fixed 8.75% interest rate (“8.75% Notes”). The 8.75% Notes are a primary obligation of the Company and are guaranteed by Westmoreland Energy LLC, Westmoreland Mining LLC and Westmoreland Resources, Inc. and their respective subsidiaries (other than Absaloka Coal, LLC, Westmoreland Risk Management, Inc. and certain other immaterial subsidiaries), referred to as the “Guarantors.” The 8.75% Notes are not guaranteed by Westmoreland Canada LLC or any of its subsidiaries, WSJ or any of its subsidiaries, or Westmoreland Resources GP, LLC or WMLP, referred to as the “Non-guarantors.” As of March 31, 2017, we were in compliance with all covenants of the 8.75% Notes.

Term Loan

Pursuant to our credit agreement, dated as of December 22, 2014, by and among the Company, the lenders from time to time party thereto, and Bank of Montreal, as administrative agent, as amended, our term loan (“Term Loan”) matures on December 16, 2020 and accrues interest on a quarterly basis at a variable interest rate which is set at our election at (i) the one-, two-, three- or six-month London Interbank Offered Rate (“LIBOR”) plus 6.50% or (ii) a base rate (determined with reference to the highest of the prime rate, the Federal Funds Rate plus 0.05%, or three-month LIBOR plus 1.00%) plus 5.50%. As of March 31, 2017, the interest rate was 7.50%. The Term Loan is a primary obligation of the Parent and is guaranteed by the Guarantors. As of March 31, 2017, we were in compliance with all covenants of the Term Loan.

San Juan Loan

Pursuant to the loan agreement, dated as of February 1, 2016, by and among WSJ and the remaining Westmoreland San Juan Entities as guarantors, and NM Capital Utility Corporation (an affiliate of Public Service Company of New Mexico, part owner of SJGS) as lender, we financed the San Juan Acquisition in part with a senior secured $125.0 million term loan (“San Juan Loan”). The San Juan Loan matures on February 1, 2021 and pays interest and principal on a quarterly basis at an interest rate of (i) 7.25% (the “Margin Rate”) plus (ii) (A) the LIBOR for a three month period plus (B) a statutory reserve rate, which such Margin Rate increasing incrementally during each year of the San Juan Loan term. As of March 31, 2017, the cash interest rate is 8.29%. It is a primary obligation of WSJ, is guaranteed by SJCC, and is secured by substantially all of SJCC’s assets. The San Juan Loan has no prepayment penalties. The agreements governing the San Juan Loan include representations and warranties and covenants regarding the ownership and operation of SJCC and the properties acquired in the San Juan Acquisition and standard special purpose bankruptcy remote entity covenants designed to preserve the separateness from the Company of each of (i) WSJ, (ii) WSJ’s direct parent company, Westmoreland San Juan Holdings, Inc., (iii) SJCC and (iv) SJTC (collectively, the “Westmoreland San Juan Entities”). Obligations under the San Juan Loan are recourse only to the Westmoreland San Juan Entities and their assets. Neither the Company nor its subsidiaries (other than the Westmoreland San Juan Entities) is an obligor under the San Juan Loan in any respect. The agreement governing the San Juan Loan requires that all revenues of the Westmoreland San Juan Entities, aside from payments on certain leases, are deposited into a cash management collection account swept monthly for operating expenses, capital expenditures, and loan payment and prepayment. The assets and credit of SJCC are not available to satisfy the debts and other obligations of the Company other than those of the Westmoreland San Juan Entities. As of March 31, 2017, we were in compliance with all covenants of the San Juan Loan.

WMLP Term Loan

Pursuant to the financing agreement, dated as of December 31, 2014, by and among Oxford Mining Company, LLC, WMLP and each of its subsidiaries, lenders from time to time party thereto, and U.S. Bank National Association, as administrative agent, the term loan of WMLP (“WMLP Term Loan”) matures on December 31, 2018 and pays interest on a quarterly basis at a variable rate equal to the LIBOR floor of (1.15%) plus 8.5% or the reference rate as defined in the financing agreement. As of March 31, 2017, the cash interest rate is 9.65%. The WMLP Term Loan is a primary obligation of Oxford Mining Company, LLC, a wholly owned subsidiary of WMLP, is guaranteed by WMLP and its subsidiaries, and is secured by substantially all of WMLP’s and its subsidiaries’ assets. At March 31, 2017, we were in compliance with all covenants of the WMLP Term Loan.

The WMLP Term Loan also provides for Paid-In-Kind Interest (“PIK Interest”) at a variable rate between 1.00% and 3.00% based on our consolidated total net leverage ratio as defined in the financing agreement. The rate of PIK Interest is recalculated on a quarterly basis with the PIK Interest added quarterly to the then-outstanding principal amount of the WMLP Term Loan under the financing agreement. PIK Interest under the financing agreement was $2.3 million for the three months ended March 31, 2017. The outstanding WMLP Term Loan amount represents the principal balance of $289.7 million, plus PIK Interest of $18.4 million.

Revolver

Pursuant to the second amended and restated loan and security agreement, dated as of December 16, 2014, by and among the Company and certain of its subsidiaries, lenders party thereto, and The PrivateBank and Trust Company, as administrative agent (the “Revolver”), the Company’s Revolver has a total aggregate borrowing capacity of $60.0 million between June 15th and August 31st of each year, with an aggregate borrowing capacity of $50.0 million outside of these periods subject to borrowing base calculations as defined in the agreement. The availability of the Revolver consists of a $30.0 million sub-facility ($35.0 million with the seasonal increase) available to our U.S. borrowers and a $20.0 million sub-facility ($25.0 million with the seasonal increase) available to our Canadian borrowers. The Revolver may support an equal amount of letters of credit, with outstanding letter of credit balances reducing availability under the Revolver. At March 31, 2017, availability on the Revolver was $33.4 million which reflects $9.9 million in outstanding letters of credit. We had no borrowings on the Revolver. The Revolver has a maturity date of December 31, 2018. We were in compliance with all covenant requirements of the Revolver as of March 31, 2017.

On March 13, 2017, the Company executed a consent and ninth amendment to our Revolver (“Ninth Amendment”). The Ninth Amendment contained a consent from the Revolver lenders to grant a first priority security interest in the assets of the Company’s Genesee mine in favor of customer at the Genesee mine. Additionally, the Ninth Amendment adjusted the fixed charge coverage ratio calculation by amending the allocation schedule of cash interest payments between Canada and the U.S., and detailed modifications to the calculation of that ratio upon the occurrence of certain events, including the accelerated repayment of the loan and lease receivable arrangement at our Genesee mine.

On May 9, 2017, the Company executed a tenth amendment to our Revolver (“Tenth Amendment”). The Tenth Amendment adjusted the fixed charge coverage ratio calculation by further modifying the treatment of the accelerated repayment of the loan and lease receivable arrangement at our Genesee mine from March 24, 2017, and removing certain testing periods from the U.S. and Canadian fixed charge coverage ratio calculation so long as the Company meets certain liquidity requirements.

WMLP Revolver

Pursuant to the loan and security agreement, dated as of October 23, 2015, by and among WMLP and its subsidiaries, lenders party thereto, and The PrivateBank and Trust Company, as administrative agent (the “WMLP Revolver”), the WMLP Revolver permits WMLP to borrow up to the aggregate principal amount of $15.0 million subject to borrowing base restrictions as defined in the agreement. The WMLP Revolver also allows letters of credit in an aggregate outstanding amount of up to $10.0 million, which reduces availability under the WMLP Revolver on a dollar-for-dollar basis. At March 31, 2017, availability under the WMLP Revolver was $14.7 million. The WMLP Revolver has a maturity date of December 31, 2017. We were in compliance with all covenant requirements of the WMLP Revolver as of March 31, 2017.

Capital lease obligations

The Company engages in leasing transactions for equipment utilized in its mining operations. During the three months ended March 31, 2017, the Company entered into $0.5 million of new capital leases.