Debt, net

Debt consists of:



	March 31, 2018		December 31, 2017
	(In thousands)
3.75% convertible senior notes due 2020, net of discount	$	109,327	$	108,139
Other indebtedness — 5.50% interest rate	498		290
	$	109,825	$	108,429

Secured Letter of Credit Agreement

On October 5, 2017, we entered into a Letter of Credit Facility Agreement with lenders providing for a $30,000,000 secured standby letter of credit facility (the "LC Facility"). The LC Facility is secured by $30,000,000 in cash deposited with the administrative agent. In addition, we have $10,000,000 on deposit with a participating lender. These deposits are classified as restricted cash on our consolidated balance sheets. At March 31, 2018, $21,003,000 was outstanding under the LC Facility.

Public Unsecured Debt

On October 5, 2017, we had $120,000,000 aggregate principal amount of 3.75% convertible senior notes due 2020 ("Convertible Notes"). The completion of the Merger constituted a fundamental change in the indenture governing the Convertible Notes and, as a result, we offered to purchase all or any part of every holder’s Convertible Notes for a price in cash equal to 100% of the aggregate principal amount of the Convertible Notes, plus accrued and unpaid interest, if any, to the date of repurchase. As a result, we purchased $1,077,000 of the aggregate principal amount of the Convertible Notes in November 2017. Also, prior to the Merger, upon conversion of the Convertible Notes each holder was entitled to receive 40.8351 shares of former Forestar common stock per $1,000 principal amount of notes surrendered for conversion. In connection with the Merger, the conversion ratio was adjusted in accordance with the indenture governing the Convertible Notes such that each holder is now entitled to receive $579.77062 in cash and 8.17192 shares of new Forestar common stock per $1,000 principal amount of notes surrendered for conversion. At March 31, 2018, the principal amount of the Convertible Notes was $118,923,000 and the unamortized debt discount was $8,657,000. The effective interest rate on the liability component was 8% and the carrying amount of the equity component was $16,847,000. We intend to settle the principal amount of the Convertible Notes in cash upon conversion, with any excess conversion value to be settled in shares of our common stock.

Deferred Fees

At March 31, 2018 and December 31, 2017, we had $939,000 and $1,058,000 in unamortized deferred financing fees which were deducted from our debt. Amortization of deferred financing fees was $119,000 and $330,000 in the three months ended March 31, 2018 and 2017 and was included in interest expense.