DEBT

(Dollars in thousands)



	2012		2011
Revenue bonds, fixed rate 5.9% to 7.75%, due 2014 through 2026	$	144,627	$	149,745
7.5% Senior Notes, due 2019	148,241		147,984
Debentures, 6.95%, due 2015	22,493		22,490
Medium-term notes, fixed rate 8.75% to 8.89%, due 2016 through 2022	27,250		43,750
Term loans, fixed rate 2.95% due 2017 and 3.70% due 2020	12,000		—
Interest rate swaps	2,952		2,409
Other notes	13		25
	357,576		366,403
Less current installments on long-term debt	8,413		21,661
Long-term debt	$	349,163	$	344,742

In 2012, $16.5 million of medium-term notes and $5.2 million of revenue bonds matured and were redeemed. In 2011, $5.0 million of medium-term notes matured and were redeemed.

On December 11, 2012, we entered into a new unsecured credit agreement that superseded our previous secured credit agreement. This new bank credit facility, which expires on December 11, 2017, provides for a revolving line of credit of up to $250 million, including a $40 million subfacility for letters of credit and a $15 million subfacility for swing line loans. Usage under either or both subfacilities reduces availability under the revolving line of credit. Subject to certain conditions and agreement of the lenders, the bank credit facility may be increased by up to an additional $100 million. As of December 31, 2012, there were no borrowings outstanding under the revolving line of credit, and approximately $1.9 million of the letter of credit subfacility was being used to support several outstanding letters of credit. Available borrowing capacity at December 31, 2012 was $248.1 million.

Pricing is set according to the type of borrowing. Eurodollar Rate Loans are issued at a rate equal to the British Bankers Association LIBOR Rate, while Base Rate Loans are issued at a rate equal to the Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1.00%, (b) the British Bankers Association LIBOR Rate that would then be applicable to a new Eurodollar Rate Loan with a one month Interest Period plus 1.00%, and (c) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The interest rates we pay for borrowings under either type of loan include an additional Applicable Rate, which can range from 1.25% to 2.50% for Eurodollar loans and from 0.25% to 1.50% for Base Rate loans, depending on the current Leverage Ratio, as defined below. As of December 31, 2012, we were able to borrow under the bank credit facility with the additional applicable rate of 2.00% for Eurodollar Rate Loans and 1.00% for Base Rate Loans, with commitment fees of 0.3% on the unused balance of the bank credit facility.

The bank credit facility contains financial maintenance covenants establishing a minimum interest coverage ratio, a minimum timberland coverage ratio and a maximum leverage ratio. We will be permitted to pay distributions to our stockholders under the terms of the bank credit facility so long as we remain in pro forma compliance with the financial maintenance covenants.

The table below sets forth the financial covenants in the bank credit facility and our status with respect to these covenants as of December 31, 2012:



	COVENANT REQUIREMENT			ACTUAL AT DECEMBER 31, 2012
Minimum Interest Coverage Ratio	3.00	to	1.00	4.64	to	1.00
Minimum Timberland Coverage Ratio	3.00	to	1.00	5.39	to	1.00
Maximum Leverage Ratio	5.00	to	1.00 *	3.03	to	1.00

* Commencing January 1, 2015, the Maximum Leverage Ratio will decrease to 4.50 to 1.00.

On December 18, 2012, we entered into a $12 million term loan to fund two timberland acquisitions. The term loan consists of two $6 million tranches, with rates of 2.95% on the 2017 maturity and 3.70% on the 2020 maturity. The term loan contains the same covenants as those in the new credit agreement.

On November 3, 2009, we sold $150 million aggregate principal amount of 7.5% senior notes. The terms of the notes limit our ability and the ability of any subsidiary guarantors to borrow money, pay dividends, redeem or repurchase capital stock, enter into sale and leaseback transactions, and create liens. With respect to the limitation on dividends and the repurchase of our capital stock, these restricted payments are permitted as follows:


•	We may use 100% of our Funds Available for Distribution, or FAD, for the period January 1, 2010 through the end of the quarter preceding the payment date, less cumulative restricted payments previously made from FAD during that period, to make restricted payments. Our cumulative FAD less our dividends paid was $30.8 million at December 31, 2012.


•	If our cumulative FAD, less cumulative restricted payments previously made from FAD, is insufficient to cover a restricted payment, then we are permitted to make payments from a basket amount, which was approximately $90.1 million at December 31, 2012.

•

If our cumulative FAD less our aggregate restricted payments made from FAD is insufficient to cover a restricted payment and we have depleted the basket, we may still make a restricted payment, so long as, after giving effect to the payment, our ratio of indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and basis of real estate sold, or EBITDDA, from continuing operations for the preceding four full fiscal quarters does not exceed 4.25 to 1.00.

FAD, as defined in the indenture governing the senior notes, is earnings from continuing operations, plus depreciation, depletion and amortization, plus basis of real estate sold, and minus capital expenditures. For purposes of this definition, capital expenditures exclude all expenditures relating to direct or indirect timberland purchases in excess of $5 million.

Scheduled payments due on long-term debt during each of the five years subsequent to December 31, 2012, are as follows:

(Dollars in thousands)



2013	$	8,413
2014	21,000
2015	22,500
2016	5,000
2017	11,000