DEBT

A summary of the Company’s debt as of September 30, 2016 and December 31, 2015 was as follows (in thousands):



	September 30, 2016			December 31, 2015
Convertible debt:
2018 Notes	$	50,389		$	61,632
2019 Notes	148,072			149,500
Total debt	198,461			211,132
Add:
Fair value of embedded derivative	—			82
Less:
Unamortized debt discount	(6,498		)	(8,749		)
Debt issuance costs	(312		)	(450		)
Long-term portion of debt	$	191,651		$	202,015

The Company was in compliance with all debt covenants as of September 30, 2016 and December 31, 2015.

Convertible Senior Subordinated Notes -2018 Notes—As of September 30, 2016, the Company had $50.4 million aggregate principal amount outstanding of 6.00% Convertible Senior Subordinated Notes due 2018 ("2018 Notes"). The 2018 Notes bear interest at a fixed rate of 6.00% per year, payable semiannually in arrears on August 1 and February 1 of each year. The 2018 Notes are convertible into the Company’s common stock and may be settled as described below. The 2018 Notes will mature on February 1, 2018, unless earlier repurchased or converted. The Company may not redeem the 2018 Notes prior to maturity.

The 2018 Notes are convertible at the option of the holders at any time prior to the close of business on the scheduled trading day immediately preceding February 1, 2018 into shares of the Company’s common stock at the then-applicable conversion rate. The conversion rate is initially 121.1240 shares of common stock per $1,000 principal amount of 2018 Notes (equivalent to an initial conversion price of approximately $8.26 per share of common stock). With respect to any conversion prior to November 1, 2016 (other than conversions in connection with certain fundamental changes where the Company may be required to increase the conversion rate as described below), in addition to the shares deliverable upon conversion, holders are entitled to receive an early conversion payment equal to $83.33 per $1,000 principal amount of 2018 Notes surrendered for conversion that may be settled, at the Company’s election, in cash or, subject to satisfaction of certain conditions, in shares of the Company’s common stock.

Convertible Senior Subordinated Notes - 2019 Notes— As of September 30, 2016, the Company had $148.1 million aggregate principal amount outstanding of 5.00% Convertible Senior Subordinated Notes due 2019 ("2019 Notes"). The 2019 Notes bear interest at a fixed rate of 5.00% per year, payable semiannually in arrears on April 1 and October 1 of each year. The 2019 Notes are convertible into the Company's common stock and may be settled early as described below. The 2019 Notes will mature on October 1, 2019, unless earlier repurchased or converted. The Company may not redeem the 2019 Notes prior to maturity.

The 2019 Notes are convertible at the option of the holders on any day prior to and including the scheduled trading day prior to October 1, 2019. The 2019 Notes will initially be convertible at a conversion rate of 75.7576 shares of the Company's Common Stock per $1,000 principal amount of 2019 Notes (equivalent to an initial conversion price of $13.20 per share of the Company's Common Stock), subject to adjustment upon the occurrence of certain events. With respect to any conversion prior to January 1, 2018 (other than conversions in connection with certain fundamental changes where the Company may be required to increase the conversion rate as described below), in addition to the shares deliverable upon conversion, holders are entitled to receive an early conversion payment equal to $83.33 per $1,000 principal amount of 2019 Notes surrendered for conversion that may be settled, at the Company’s election, in cash or shares of the Company's common stock.

Debt Conversion —During the nine months ended September 30, 2016, the Company exchanged 2018 and 2019 Notes totaling approximately $12.7 million by issuing 3,459,567 new shares (including 1,544,039 inducement shares) of the Company's common stock. The Company recorded a non-cash debt conversion expense of approximately $3.2 million and $5.0 million related to the exchange in the three and nine months ended September 30, 2016, respectively. As of September 30, 2016 accrued liabilities included accrued debt conversion liabilities of $1.1 million for the exchange of Notes that were agreed to as of September 30, 2016, and Notes payable was reduced by $3.8 million when the final transaction settled in October 2016.

SVB Standby Letter of Credit and Loan and Security Agreement—In the second quarter of 2016, the Company and Silicon Valley Bank entered into an agreement ("SVB Agreement") that provides for a $12.9 million letter of credit facility (the “Facility”) denominated in U.S. dollars or a foreign currency. On April 29, 2016, Silicon Valley Bank issued a standby letter of credit (“SVB SLOC”) to support a bank guarantee issued on behalf of the Company to BNDES in connection with the loan agreement entered into in 2013 between BNDES and the Solazyme Bunge JV. The SVB SLOC is being supported by a bank confirmation issued by the Bank of Nova Scotia (the “Scotia Bank Confirmation”) on behalf of Silicon Valley Bank. The Company is required to pay fees of 1.5% and 0.7% of the collateral per annum related to the SVB SLOC and the Scotia Bank Confirmation, respectively. The Company is also required to pay a fee of 1.99% of the collateral per annum for the issuance of the bank guarantee to BNDES. The Company is subject to customary events of default under the SVB Agreement. The Company has not recorded any liability for this guarantee as of September 30, 2016, as the probability of performance is considered to be not sufficient to justify a liability.

Under the SVB Agreement, the Company is subject to financial covenants and covenants related to our 2018 Notes and 2019 Notes, as well as customary negative covenants. The SVB Agreement also contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default.