Debt and obligations under capital lease

(a) Long-term debt and obligations under capital lease

Long-term debt and obligations under capital lease consist of the following:



	March 31, 2014	December 31, 2013
	$’000	$’000

Loans from banks and other parties collateralized by tangible and intangible personal property (excluding real estate) with a maturity of seven years (December 31, 2013 - one to nine years), with a weighted average interest rate of 4.52% (December 31, 2013 - 4.22%)	551,725	543,567
Obligations under capital lease	62	14

Total long-term debt and obligations under capital lease	551,787	543,581

Less: Current portion	5,527	71,011

Non-current portion of long-term debt and obligations under capital lease	546,260	472,570

On March 21, 2014, OEH entered into a $551,955,000 secured term loan and a $105,000,000 revolving credit facility, the proceeds of which were used to repay all outstanding funded debt apart from the debt of Charleston Center LLC, a consolidated VIE, and the debt of OEH’s unconsolidated joint venture companies.

The term loan consists of two tranches, a $345,000,000 U.S. dollar tranche and a €150,000,000 euro-denominated tranche (equivalent to $206,955,000 at drawdown). The dollar tranche bears interest at a rate of LIBOR plus 3% per annum, and the euro tranche bears interest at a rate of EURIBOR plus 3.25% per annum. Both tranches are subject to a 1% interest rate floor. The term loan matures in seven years and the annual mandatory amortization is 1% of the principal amount.

The revolving credit facility has a maturity of five years and bears interest at a rate of LIBOR plus 2.75% per annum, with a commitment fee of 0.4% paid on the undrawn amount.

The term loan and revolving credit facility are secured by pledges of shares in certain Company subsidiaries and by security interests in tangible and intangible personal property. There are no mortgages over real estate.

The following is a summary of the aggregate maturities of consolidated long-term debt, including obligations under capital lease, at March 31, 2014:



		$’000

Remainder of 2014		4,148
2015		5,533
2016		5,533
2017		5,534
2018		5,521
2019		5,517
2020 and thereafter		520,001

Total long-term debt and obligations under capital lease		551,787

The Company has guaranteed $551,725,000 of the long-term debt of its subsidiary companies as at March 31, 2014 (December 31, 2013 - $384,818,000).

Deferred financing costs related to the above outstanding long-term debt were $12,679,000 at March 31, 2014 (December 31, 2013 - $11,080,000) and are amortized to interest expense over the term of the corresponding long-term debt.

A loss on extinguishment of debt of $14,506,000 was recognized in the three months ended March 31, 2014 (March 31, 2013 - $Nil). The loss comprised costs associated with the March corporate debt refinancing, including $8,926,000 write-off of unamortized deferred financing costs, $3,985,000 swap cancellation costs and $1,330,000 of fees to prepay OEH’s previous loans.

The debt of Charleston Center LLC, a consolidated VIE, of $95,700,000 at March 31, 2014 (December 31, 2013 - $96,150,000) is non-recourse to OEH and separately disclosed on the condensed consolidated balance sheets. The debt, entered into in October 2010, was extended at Charleston Center LLC’s option in October 2013 to give a revised maturity of October 2014, with a further one year extension option available to the borrower, and the interest rate is at LIBOR plus a margin of 3.50% per annum.

(b) Revolving credit and working capital facilities

OEH had approximately $107,265,000 of revolving credit and working capital facilities at March 31, 2014 (December 31, 2013 - $3,021,000) of which €4,000,000 (equivalent to $5,513,000 at March 31, 2014) has been allocated to an existing letter of credit and $101,752,000 was available (December 31, 2013 - $2,883,000).