11. Unsecured Senior Notes

The following table is a summary of our unsecured senior notes outstanding as of December 31, 2016 and 2015 (dollars in thousands):


						Remaining
	Coupon		Effective		Maturity	Period of		Carrying Value at December 31,
	Rate		Rate (1)		Date	Amortization		2016		2015
2017 Convertible Notes	3.75	%	5.86	%	10/15/2017	0.8	years	$	411,885	$	431,250
2018 Convertible Notes	4.55	%	6.10	%	3/1/2018	1.2	years		599,981		599,981
2019 Convertible Notes	4.00	%	5.35	%	1/15/2019	2.0	years		341,363		341,363
2021 Senior Notes	5.00	%	5.32	%	12/15/2021	5.0	years		700,000		—
Total principal amount									2,053,229		1,372,594
Unamortized discount—Convertible Notes									(26,135)		(47,351)
Unamortized discount—Senior Notes									(9,728)		—
Unamortized deferred financing costs									(5,822)		(1,448)
Carrying amount of debt components								$	2,011,544	$	1,323,795
Carrying amount of conversion option equity components recorded in additional paid-in capital								$	45,988	$	46,343

(1)

Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option on our convertible notes, the value of which reduced the initial liability and was recorded in additional paid‑in‑capital.

Senior Notes Due 2021

On December 16, 2016, we issued $700.0 million of 5.00% Senior Notes due 2021 (the “2021 Notes”). The 2021 Notes mature on December 15, 2021. Prior to September 15, 2021, we may redeem some or all of the 2021 Notes at a price equal to 100% of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable date of redemption. On and after September 15, 2021, we may redeem some or all of the 2021 Notes at a price equal to 100% of the principal amount thereof. In addition, we may redeem up to 35% of the 2021 Notes at the applicable redemption prices using the proceeds of certain equity offerings.

Convertible Senior Notes

On October 8, 2014, we issued $431.3 million of 3.75% Convertible Senior Notes due 2017 (the “2017 Notes”). On February 15, 2013, we issued $600.0 million of 4.55% Convertible Senior Notes due 2018 (the “2018 Notes”). On July 3, 2013, we issued $460.0 million of 4.00% Convertible Senior Notes due 2019 (the “2019 Notes”). We recognized interest expense of $57.1 million, $58.0 million and $49.4 million during the years ended December 31, 2016, 2015 and 2014, respectively, from our unsecured convertible senior notes (collectively, the “Convertible Notes”). The following table details the conversion attributes of our Convertible Notes outstanding as of December 31, 2016 (amounts in thousands, except rates):


	December 31, 2016			Conversion Spread Value - Shares (3)
	Conversion	Conversion		For the Year Ended December 31,
	Rate (1)	Price (2)		2016	2015	2014
2017 Notes	41.7397	$	23.96	—	—	—
2018 Notes	47.2712	$	21.15	1,097	—	1,221
2019 Notes	49.9717	$	20.01	1,600	97	2,211
				2,697	97	3,432

(1)

The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of Convertible Notes converted, as adjusted in accordance with the indentures governing the Convertible Notes (including the applicable supplemental indentures) as a result of the spin-off of our former SFR segment to our stockholders in January 2014 and cash dividend payments.

(2)

As of December 31, 2016, 2015 and 2014, the market price of the Company’s common stock was $21.95, $20.56 and $23.24 per share, respectively.

(3)

The conversion spread value represents the portion of the convertible senior notes that are “in-the-money”, representing the value that would be delivered to investors in shares upon an assumed conversion.

The if-converted value of the 2018 Notes and 2019 Notes exceeded their principal amount by $22.7 million and $33.1 million, respectively, at December 31, 2016 since the closing market price of the Company’s common stock of $21.95 per share exceeded the implicit conversion prices of $21.15 and $20.01 per share, respectively. However, the if‑converted value of the 2017 Notes was less than its principal amount by $34.6 million at December 31, 2016 since the closing market price of the Company’s common stock was less than the implicit conversion price of $23.96.

The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As such, only the conversion spread value, if any, is included in the computation of diluted EPS.

Under the repurchase program approved by our board of directors (refer to Note 17), we repurchased $19.4 million aggregate principal amount of our 2017 Notes during the year ended December 31, 2016 and $118.6 million aggregate principal amount of our 2019 Notes during the year ended December 31, 2015 for $19.9 million and $136.3 million, respectively, plus transaction expenses of $0.1 million during the year ended December 31, 2015. The repurchase price was allocated between the fair value of the liability component and the fair value of the equity component of the convertible security. The portion of the repurchase price attributable to the equity component totaled $0.4 million and $17.7 million, respectively, and was recognized as a reduction of additional paid-in capital during the years ended December 31, 2016 and 2015. The remaining repurchase price was attributable to the liability component. The difference between this amount and the net carrying amount of the liability and debt issuance costs was reflected as a loss on extinguishment of debt in our consolidated statement of operations. For the years ended December 31, 2016 and 2015, the loss on extinguishment of debt totaled $0.6 million and $5.9 million, respectively, consisting principally of the write-off of unamortized debt discount. There were no repurchases of Convertible Notes during the year ended December 31, 2014.

Conditions for Conversion

Prior to April 15, 2017 for the 2017 Notes, September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, the Convertible Notes will be convertible only upon satisfaction of one or more of the following conditions: (1) the closing market price of the Company’s common stock is at least 110%, in the case of the 2017 Notes, or 130%, in the case of the 2018 Notes and the 2019 Notes, of the conversion price of the respective Convertible Notes for at least 20 out of 30 trading days prior to the end of the preceding fiscal quarter, (2) the trading price of the Convertible Notes is less than 98% of the product of (i) the conversion rate and (ii) the closing price of the Company’s common stock during any five consecutive trading day period, (3) the Company issues certain equity instruments at less than the 10‑day average closing market price of its common stock or the per‑share value of certain distributions exceeds the market price of the Company’s common stock by more than 10% or (4) other specified corporate events (significant consolidation, sale, merger, share exchange, fundamental change, etc.) occur.

On or after April 15, 2017, in the case of the 2017 Notes, September 1, 2017, in the case of the 2018 Notes, and July 15, 2018, in the case of the 2019 Notes, holders may convert each of their Convertible Notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.