Debt

3 Months Ended

Mar. 31, 2020

Debt

Debt

Note 6 Debt

Debt consisted of the following:

	March 31,		December 31,
	2020		2019
	(In thousands)
5.00% senior notes due September 2020 (1)	$	239,791	$	282,046
4.625% senior notes due September 2021		221,032		634,588
5.50% senior notes due January 2023		46,410		501,003
5.10% senior notes due September 2023		166,001		336,810
0.75% senior exchangeable notes due January 2024		478,305		472,603
5.75% senior notes due February 2025		775,186		781,502
7.25% senior notes due January 2026		600,000		—
7.50% senior notes due January 2028		400,000		—
2012 Revolving credit facility (1)		300,000		355,000
2018 Revolving credit facility		200,000		—
		3,426,725		3,363,552
Less: current portion		—		—
Less: deferred financing costs		38,711		30,332
	$	3,388,014	$	3,333,220

(1) The 5.00% senior notes due September 2020 and 2012 Revolving Credit Facility have been classified as long-term because we have the ability and intent to repay these obligations utilizing our revolving credit facility (see 2018 Revolving Credit Facility below).

During the three months ended March 31, 2020, we repurchased $1.1 billion aggregate principal amount outstanding of our senior unsecured notes for approximately $1.1 billion in cash, including principal, and $11.2 million in accrued and unpaid interest. Approximately $952.9 million of notes were purchased in the tender offers and consent solicitations described below and the remainder were purchased in the open market. In connection with these repurchases, we recognized a net gain of approximately $15.7 million for the three months ended March 31, 2020 and is included in other, net in our condensed consolidated statement of income (loss).

Subsequent to March 31, 2020 through the date of this report, we repurchased $154.9 million aggregate principal amount outstanding of various series of our senior unsecured notes for approximately $132.9 million in cash, reflecting principal, accrued and unpaid interest.

7.25% and 7.50% Senior Notes Due January 2026 and 2028

In January 2020, Nabors completed a private placement of $600.0 million aggregate principal amount of senior guaranteed notes due 2026 (the “2026 Notes”) and $400.0 million aggregate principal amount of senior guaranteed notes due 2028 (the “2028 Notes” and, together with the 2026 Notes, the “Notes”). The 2026 and 2028 Notes will bear interest at an annual rate of 7.25% and 7.50%, respectively. The Notes are fully and unconditionally guaranteed by certain of Nabors’ indirect wholly-owned subsidiaries.

The proceeds from this offering were primarily used to repurchase $952.9 million aggregate principal amount of certain of Nabors Delaware’s senior notes that were tendered pursuant to an offer to purchase and consent solicitation. The aggregate principal amount repurchased included approximately $407.7 million of our 5.50% senior notes due 2023 (the “5.50% Notes”), $379.7 million of our 4.625% senior notes due 2021 (the “4.625% Notes”) and $165.5 million of our 5.10% senior notes due 2023 (the “5.10% Notes”).

2018 Revolving Credit Facility

On December 13, 2019, Nabors Delaware and Nabors Drilling Canada Limited (“Nabors Canada” and together with Nabors Delaware, the “Borrowers”) entered into Amendment No. 2 (the “Second Amendment”) to the existing credit agreement dated October 11, 2018 (as amended, including such amendment, the “2018 Revolving Credit Facility”) by and among the Borrowers, the Guarantors identified therein, HSBC Bank Canada, as the Canadian lender (the “Canadian Lender”) the issuing banks and other lenders party thereto (the “US Lenders” and, together with the Canadian Lender,

the “Lenders”) and Citibank, N.A., as administrative agent solely for the U.S. Lenders. Amendment No. 3 to the 2018 Revolving Credit Facility was entered into on March 3, 2020, in order to permit letters of credit from the Canadian Lender on the portion of the facility dedicated to Canadian borrowings. The 2018 Revolving Credit Facility has a borrowing capacity of $1.0136 billion and is fully and unconditionally guaranteed by Nabors and certain of its wholly owned subsidiaries. The 2018 Revolving Credit Facility matures at the earlier of (a) October 11, 2023 and (b) July 19, 2022, if any of Nabors Delaware’s existing 5.50% senior notes due January 2023 remain outstanding as of such date. Certain lenders have committed to provide Nabors Delaware an aggregate principal amount of $981.6 million under the 2018 Revolving Credit Facility, which may be drawn in U.S. dollars, and the Canadian Lender has committed to provide Nabors Canada an aggregate principal amount of $32.0 million in U.S. dollar equivalent, which can be drawn upon in either U.S. or Canadian dollars. The 2018 Revolving Credit Facility contains certain affirmative and negative covenants, including a financial covenant requiring Nabors to maintain net funded debt to EBITDA (as defined in the Second Amendment) at no greater than 5.5 times EBITDA. Additionally, during any period in which Nabors Delaware fails to maintain an investment grade rating from at least two ratings agencies, the guarantors under the facility and their respective subsidiaries will be required to maintain an asset to debt coverage ratio (as defined in the 2018 Revolving Credit Facility) of at least 2.50:1. As of March 31, 2020, we had $200 million outstanding under our 2018 Revolving Credit Facility. The weighted average interest rate on borrowings at March 31, 2020 was 3.67%. In order to make any future borrowings under the 2018 Revolving Credit Facility, Nabors and certain of its wholly owned subsidiaries are subject to compliance with the conditions and covenants contained therein, including compliance with applicable financial ratios.

As of March 31, 2020, we were in compliance with all covenants under the 2018 Revolving Credit Facility. If we fail to perform our obligations under the covenants, including financial covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facilities could be declared immediately due and payable. We expect to remain in compliance with all covenants under the 2018 Revolving Credit Facility during at least the twelve month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect.

2012 Revolving Credit Facility

In connection with entering into the 2018 Revolving Credit Facility, Nabors Delaware entered into Amendment No. 3 to its credit agreement (as amended, including such amendment, the “2012 Revolving Credit Facility”). The 2012 Revolving Credit Facility had a capacity of $666.25 million, of which we had $300.0 million outstanding as of March 31, 2020. The weighted average interest rate on borrowings at March 31, 2020 was 3.02%. The 2012 Revolving credit Facility was due to expire in July 2020, however subsequent to the balance sheet date, we have repaid all outstanding amounts and have terminated the facility.