NOTE 9. DEBT

(Dollars in thousands)	2017			2016
Term loans	$	343,500		$	349,500
Senior notes		150,000			150,000
Revenue bonds		65,735			65,735
Medium-term notes		17,250			22,250
Long-term principal		576,485			587,485
Interest rate swaps		(373	)		247
Debt issuance costs		(2,321	)		(3,015	)
Unamortized discounts		(472	)		(729	)
Total long-term debt (includes current portion)		573,319			583,988
Less current portion of long-term debt		(14,263	)		(11,032	)
Long-term debt	$	559,056		$	572,956

TERM LOANS

We repaid $6 million of our term loans in 2017. The remaining term loans include eight tranches consisting of the following:

•

one $6 million tranche with a rate of 3.70% maturing in 2020;

•

three $40 million tranches maturing each year from 2019 through 2021 at variable rates based on three-month LIBOR plus a spread between 1.65% and 1.90% (term loan variable rates are based on three-month LIBOR of 1.34%, which is the rate incurred during the fourth quarter of 2017);

•

two $40 million tranches with rates of 4.29% maturing in 2022 and 4.49% maturing in 2023;

•

one tranche of $110 million with a rate of 4.64% maturing in 2024; and

•

one tranche of $27.5 million with a rate of 2.15% plus three-month LIBOR maturing in 2026.

SENIOR NOTES

In 2009, we sold $150 million aggregate principal amount of 7.50% senior notes due in 2019. The terms of these 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.

MEDIUM-TERM NOTES AND REVENUE BONDS

The medium-term notes were originally issued during 1991 and 1992 with fixed rates of 8.75% to 8.89% due 2018 through 2022. Repayment of $5 million of our medium-term notes occurred in 2017.

In 2016, we repaid $42.6 million of revenue bonds. The bonds carried a rate of 5.90% and matured in 2026. In 2016, we also refinanced $65.7 million of revenue bonds at a rate of 2.75%. The original bonds, which carried a rate of 6.00%, were extinguished and a new debt obligation was simultaneously issued. The principal balance and maturity date in 2024 remain unchanged.

DEBT ISSUANCE COSTS

Debt issuance costs represent the capitalized direct costs incurred related to the issuance of debt. These costs are amortized to interest expense over the terms of the respective borrowings.

DEBT MATURITIES

Scheduled principal payments due on long-term debt as of December 31, 2017 are as follows:

(Dollars in thousands)
2018	$	14,250
2019		190,000
2020		46,000
2021		40,000
2022		43,000
Thereafter		243,235
Total	$	576,485

Principal repayments on long-term debt occur at maturity. Our debt obligations are of equal priority.

CREDIT AGREEMENT

In 2014, we entered into an amended and restated credit agreement with an expiration date of February 12, 2020. The credit agreement provides for a revolving line of credit with an initial aggregate principal amount not to exceed $250 million, which may be increased by up to an additional $250 million. It also includes a sublimit of $40 million for the issuance of standby letters of credit and a sublimit of $25 million for swing line loans. Usage under either or both subfacilities reduces availability under the revolving line of credit. As of December 31, 2017, there were no borrowings outstanding under the revolving line of credit, and approximately $0.9 million of the letter of credit subfacility was being used to support several outstanding letters of credit. Available borrowing capacity at December 31, 2017 was $249.1 million.

Pricing is set according to the type of borrowing. LIBOR 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 rate of interest in effect for such day as publicly announced from time to time by KeyBank as its “prime rate” and (c) the sum of the LIBOR that would apply to a one month Interest Period plus 1.00%. The interest rates we pay for borrowings under either type of loan include an additional Applicable Rate, which can range from 0.875% to 1.70% for LIBOR loans and from 0% to 0.70% for Base Rate loans, depending on our current credit rating. As of December 31, 2017, we were able to borrow under the bank credit facility with the additional applicable rate of 1.50% for LIBOR Loans and 0.50% for Base Rate Loans, with facility fees of 0.25% on the $250 million of the bank credit facility.

On February 14, 2018, we entered into a second amended and restated credit agreement (the Amended Credit Agreement) with an expiration date of April 14, 2023. The Amended Credit Agreement increases our revolving line of credit to $380 million, which may be increased by up to an additional $420 million. It also includes a sublimit of $75 million for the issuance of standby letters of credit and a sublimit of $25 million for swing line loans. Usage under either or both subfacilities reduces availability under the revolving line of credit. Pricing is consistent with the 2014 amended and restated credit agreement. The interest coverage ratio and leverage ratio financial covenants are unchanged. The limitation on timberland acre sales was eliminated.