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:



	June 30, 2015	December 31, 2014
	$’000	$’000

Loans from banks and other parties collateralized by tangible and intangible personal property and real estate with a maturity of four to 13 years (2014 - five to 14 years), with a weighted average interest rate of 4.28% (2014 - 4.35%)	603,333	620,106
Obligations under capital lease	79	129

Total long-term debt and obligations under capital lease	603,412	620,235

Less: Current portion	5,380	5,549
Less: Discount on secured term loan	2,255	2,451

Non-current portion of long-term debt and obligations under capital lease	595,777	612,235

On March 21, 2014, Belmond 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 Belmond’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 euro-denominated tranche was repriced in June 2015 to a rate of EURIBOR plus 3% per annum.

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.

In August 2014, Charleston Center LLC refinanced a secured loan of $83,200,000 with a new $86,000,000 loan secured on its real and personal property. The loan has a five year maturity and bears interest at a rate of LIBOR plus 2.12% per annum. This loan has no amortization and is non-recourse to Belmond.

The following is a summary of the aggregate maturities of consolidated long-term debt, including obligations under capital lease, at June 30, 2015:



		$’000

Remainder of 2015		2,686
2016		5,386
2017		5,380
2018		5,391
2019		91,396
2020		5,407
2021 and thereafter		487,766

Total long-term debt and obligations under capital lease		603,412

The Company has guaranteed $505,895,000 of the long-term debt of its subsidiary companies as at June 30, 2015 (December 31, 2014 - $522,561,000).

Deferred financing costs related to the above outstanding long-term debt were $12,847,000 at June 30, 2015 (December 31, 2014 - $13,095,000) and are amortized to interest expense over the term of the corresponding long-term debt. These costs are included in Other assets on the condensed consolidated balance sheets.

A loss on extinguishment of debt of $Nil was recognized in the six months ended June 30, 2015 (June 30, 2014 - loss of $14,506,000). The loss in the six months ended June 30, 2014 comprised costs associated with the March corporate debt refinancing.

The tables above include the debt of Charleston Center LLC, a consolidated VIE, of $97,438,000 at June 30, 2015 (December 31, 2014 - $97,545,000). This amount includes the $86,000,000 refinanced in August 2014 and is non-recourse to Belmond. Deferred financing costs related to this debt were $823,000 at June 30, 2015 (December 31, 2014 - $922,000).

(b) Revolving credit and working capital facilities

Belmond had approximately $106,191,000 of revolving credit and working capital facilities at June 30, 2015 (December 31, 2014 - $107,004,000) of which $106,191,000 was available (December 31, 2014 - $101,486,000).