Debt

9 Months Ended

Sep. 30, 2020

Debt

Debt

Note 6 Debt

Debt consisted of the following:

	September 30,		December 31,
	2020		2019
	(In thousands)
5.00% senior notes due September 2020 (1)	$	—	$	282,046
4.625% senior notes due September 2021		128,403		634,588
5.50% senior notes due January 2023		32,176		501,003
5.10% senior notes due September 2023		140,467		336,810
0.75% senior exchangeable notes due January 2024		489,901		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)		—		355,000
2018 Revolving credit facility		752,265		—
		3,318,398		3,363,552
Less: current portion		—		—
Less: deferred financing costs		28,095		30,332
	$	3,290,303	$	3,333,220

(1) As of December 31, 2019, the 5.00% senior notes due September 2020 and 2012 Revolving Credit Facility were classified as long-term because we had the ability and intent to repay these obligations utilizing our revolving credit facility (see 2018 Revolving Credit Facility below).

During the nine months ended September 30, 2020, we repurchased $1.32 billion aggregate principal amount outstanding of our senior unsecured notes for approximately $1.26 billion in cash, including principal, and $13.2 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 $65.8 million for the nine months ended September 30, 2020 and is included in other, net in our condensed consolidated statement of income (loss).

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 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

In October 2018, Nabors Delaware and Nabors Drilling Canada Limited (“Nabors Canada” and together with Nabors Delaware, the “Borrowers”) entered into a credit agreement dated October 11, 2018 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. The 2018 Revolving Credit Facility originally had a borrowing capacity of $1.267 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.. The 2018 Revolving Credit Facility contains certain affirmative and negative covenants. Amendment No. 1 to the 2018 Revolving Credit Facility provided for additional currencies in which letters of credit could be issued. On December 13, 2019, Amendment No. 2 was entered into which reduced the borrowing capacity to $1.0136 ($981.6 million for Nabors Delaware and $32.0 million for Nabors Canada), and replaced the net funded debt to capitalization covenant with a covenant to maintain net funded indebtedness at no greater than 5.5 times EBITDA. 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.

On September 2020, Amendment No. 4 was entered into in order to revise certain of the covenant and collateral requirements under the 2018 Revolving Credit Facility. Amendment No. 4 provides the Lenders with a first lien security interest in certain drilling rigs located in the U.S. and Canada and replaces the existing covenant to maintain net funded debt at no greater than 5.5 times EBITDA with a new covenant to maintain minimum liquidity of no less than $160.0 million at any time. Additionally, the “asset to debt coverage” ratio was revised such that 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 of at least 4.25:1. As of September 30, 2020, we had $752 million outstanding under our 2018 Revolving Credit Facility and the net book value of the collateralized assets under the 2018 Revolving Credit Facility was $1.4 billion. As of September 30, 2020, there was a $50.6 million reduction in total available borrowing capacity under the 2018 Revolving Credit Facility due to the minimum liquidity requirement. The weighted average interest rate on borrowings under the 2018 Revolving Credit Facility at September 30, 2020 was 3.48%. 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 September 30, 2020, we were in compliance with all covenants under the 2018 Revolving Credit Facility. See Note 2—Summary of Significant Accounting Policies for additional information regarding future covenant compliance.

2012 Revolving Credit Facility

We repaid all outstanding amounts under the 2012 Revolving Credit Facility in April 2020 and have terminated the facility.