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Debt and obligations under capital lease
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Debt and obligations under capital lease
Debt and obligations under capital lease
 
(a)    Long-term debt and obligations under capital lease

Long-term debt and obligations under capital lease consists of the following:
 
 
2017
 
2016
December 31,
 
$’000
 
$’000
 
 
 
 
 
Loans from banks and other parties collateralized by tangible and intangible personal property and real estate with a maturity of 20 months to seven years (2016 - two to five years), with a weighted average interest rate of 4.11% (2016 - 4.27%)
 
724,208

 
602,083

Obligations under capital lease
 
22

 
19

 
 
 
 
 
Total long-term debt and obligations under capital leases
 
724,230

 
602,102

 
 
 
 
 
Less: Current portion
 
6,407

 
5,284

Less: Discount on secured term loan
 
3,092

 
1,515

Less: Debt issuance costs
 
13,979

 
9,535

 
 
 
 
 
Non-current portion of long-term debt and obligations under capital lease
 
700,752

 
585,768


 
On July 3, 2017, Belmond entered into an amended and restated credit agreement (defined below), which had previously consisted of (a) a seven-year $551,955,000 term loan facility consisting of a $345,000,000 U.S. dollar tranche and a €150,000,000 euro-denominated tranche (equivalent to $206,955,000 at drawdown), scheduled to mature on March 21, 2021; and (b) a $105,000,000 revolving credit facility scheduled to mature on March 21, 2019.

In April 2017, Belmond made a drawdown of $45,000,000 on its prior revolving credit facility in connection with the acquisition of Cap Juluca, which was repaid following the amendment and restatement of the credit agreement on July 3, 2017 (the "Amended and Restated Credit Agreement"). See Note 4.
The Amended and Restated Credit Agreement provides the Company with (i) a seven-year $603,434,000 secured term loan (the "Term Loan Facility") that matures on July 3, 2024 and (ii) a $100,000,000 revolving credit facility (the "Revolving Credit Facility") that matures on July 3, 2022 (together the "Secured Credit Facilities").

As at December 31, 2017, Belmond was financed with a $609,955,000 Term Loan Facility and a $100,000,000 Revolving Credit Facility which is undrawn.

The Term Loan Facility has two tranches, a U.S. dollar tranche ($398,000,000 currently outstanding) and a euro-denominated tranche (€178,105,000 currently outstanding, equivalent to $213,352,000 as at December 31, 2017). The dollar tranche bears interest at a rate of LIBOR plus 2.75% per annum, and the euro tranche bears interest at a rate of EURIBOR plus 3.00% per annum. Both tranches are subject to a 0% interest rate floor. 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 2.50% per annum, with a commitment fee of 0.4% paid on the undrawn amount. The Revolving Credit Facility is undrawn at December 31, 2017.
The Secured Credit Facilities 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 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 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 statements 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 its partners in respect of their allocation of income from the discount arising on the cancellation of indebtedness.
 
The following is a summary of the aggregate maturities of long-term debt, including obligations under capital lease, at December 31, 2017:
Year ended December 31,
 
$’000
 
 
 
2018
 
6,407

2019
 
118,428

2020
 
6,428

2021
 
6,193

2022
 
6,144

2023
 
6,144

2024 and thereafter
 
574,486

 
 
 
Total long-term debt and obligations under capital lease
 
724,230


 
The Company has guaranteed $611,351,000 of the long-term debt of its subsidiary companies as at December 31, 2017 (2016 -$488,985,000).
 
The tables above include the debt of Charleston Center LLC of $112,857,000 at December 31, 2017 (2016 - $113,098,000). The debt is non-recourse to Belmond and includes $112,000,000 which was refinanced in June 2016.

A loss on modification of debt of $682,000 (2016 - $Nil) was recognized in the year ended December 31, 2017. The loss consisted of unamortized debt issuance costs relating to the Amended and Restated Credit Agreement.

Debt issuance costs related to the above outstanding long-term debt were $13,979,000 at December 31, 2017 (2016 - $9,535,000), including $533,000 at December 31, 2017 (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 $100,598,000 of revolving credit and working capital facilities at December 31, 2017 (2016 - $105,525,000) of which $100,598,000 was available (2016 - $105,525,000).