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, 2017	December 31, 2016
	$’000	$’000

Loans from banks and other parties collateralized by tangible and intangible personal property and real estate with a maturity of two to seven years (2016 - two to five years), with a weighted average interest rate of 4.19% (2016 - 4.27%)	657,549	602,083
Obligations under capital lease	28	19

Total long-term debt and obligations under capital lease	657,577	602,102

Less: Current portion	51,242	5,284
Less: Discount on secured term loan	1,372	1,515
Less: Debt issuance costs	8,257	9,535

Non-current portion of long-term debt and obligations under capital lease	596,706	585,768

As at June 30, 2017, Belmond was financed with a $499,569,000 secured term loan and a $105,000,000 revolving credit facility.

The term loan had two tranches, a U.S. dollar tranche ($333,788,000 currently outstanding) and a euro-denominated tranche (€145,125,000 currently outstanding, equivalent to $165,781,000 as at June 30, 2017). The dollar tranche bore interest at a rate of LIBOR plus 3% per annum, and the euro tranche bore interest at a rate of EURIBOR plus 3% per annum. Both tranches were subject to a 1% interest rate floor. The term loan was scheduled to mature in 2021 and the annual mandatory amortization was 1% of the principal amount.

The revolving credit facility was scheduled to mature in March 2019 and bore interest at a rate of LIBOR plus 2.75% per annum, with a commitment fee of 0.4% to be paid on the undrawn amount. During the three and six months ended June 30, 2017, Belmond made a drawdown of $45,000,000 on its revolving credit facility in connection with the acquisition of Cap Juluca. See Note 3. No amounts were drawn during the three and six months ended June 30, 2016.

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

In June 2016, Charleston Center LLC amended its secured loan of $86,000,000 increasing the amount of the loan to $112,000,000 but retaining the original 2019 maturity. The interest rate on the new loan is LIBOR plus 2.35% per annum, has no amortization and is non-recourse to Belmond. The additional proceeds were used to repay a 1984 development loan from a municipal agency in the principal amount of $10,000,000 and accrued interest of $16,819,000. In connection with the early repayment of the loan, Belmond negotiated a discount that resulted in a net gain reported in the statement of consolidated operations during the year ended December 31, 2016 of $1,200,000 upon extinguishment of debt, including the payment of a tax indemnity to our partners of $2,800,000 in respect of their income from the discount arising on the cancellation of indebtedness.

On July 3, 2017, Belmond entered into an amended and restated credit agreement for its secured credit facilities. See Note 24 for further information. The amended and restated credit agreement consist of (i) a seven-year $603,434,000 secured term loan that matures on July 3, 2024 and (ii) a $100,000,000 revolving credit facility that matures on July 3, 2022. As a result of executing the amended and restated credit agreement, the outstanding debt balance as at June 30, 2017 has been refinanced on a long-term basis and these extended maturity terms are reflected in the debt maturity profiles below. The $45,000,000 drawdown on the revolving credit facility is presented within current liabilities to reflect the fact that it was repaid on July 3, 2017 as part of this transaction.

The following is a summary of the aggregate maturities of consolidated long-term debt, including obligations under capital lease, at June 30, 2017, taking into consideration the execution of the amended and restated credit agreement on July 3, 2017:



		$’000

Remainder of 2017		48,153
2018		6,307
2019		118,326
2020		6,329
2021		6,094
2022		6,045
2023		6,045
2024 and thereafter		460,278

Total long-term debt and obligations under capital lease		657,577

The Company had guaranteed $499,569,000 of the long-term debt of its subsidiary companies as at June 30, 2017 (December 31, 2016 - $488,985,000).

The tables above include the debt of Charleston Center LLC of $112,980,000 at June 30, 2017 (December 31, 2016 - $113,098,000). The debt is non-recourse to Belmond and includes $112,000,000 which was refinanced in June 2016.

Debt issuance costs related to the above outstanding long-term debt were $8,257,000 at June 30, 2017 (December 31, 2016 - $9,535,000), including $720,000 at June 30, 2017 (December 31, 2016 - $888,000) related to the debt of Charleston Center LLC, a consolidated VIE, and are amortized to interest expense over the term of the corresponding long-term debt.

(b) Revolving credit and working capital facilities

Belmond had approximately $105,570,000 of revolving credit and working capital facilities at June 30, 2017 (December 31, 2016 - $105,525,000) of which $60,570,000 was available (December 31, 2016 - $105,525,000).