6. Long-Term Debt

Long-term debt consisted of the following (dollars in thousands):



	Average Interest Rate		Final	September 30,		December 31,
	September 30, 2017		Maturity	2017		2016
Term loan A-1	5.06	%	May 4, 2022	$	88,875	$	—
Term loan A-2	5.31		May 4, 2023		228,563		—
Term loan retired	NA		NA		—		290,138
Debt issue costs and issue discount					(5,837)		(5,439)
					311,601		284,699
Current					10,250		3,000
Noncurrent				$	301,351	$	281,699

In February 2017, the Company entered into a delayed draw credit agreement for new term loans and a new revolving credit facility. The new facility fully funded the repayment of the existing term loan and replacement of the existing revolving credit on May 4, 2017. Included in the new facility is a term loan A-1 for $90.0 million with quarterly principal payments of $1.1 million with the balance due at maturity in May 2022. Interest, payable at least quarterly, is at the Alternate Base Rate plus a margin of 2.75% or a Eurocurrency rate plus a margin of 3.75%. In addition, the facility provides for a second term loan A-2 for $230.0 million with quarterly principal payments of $1.4 million for the first eight quarters and $2.9 million per quarter thereafter with the balance due at maturity in May 2023. Interest, payable at least quarterly, is at the Alternate Base Rate plus a margin of 3.0% or a Eurocurrency rate plus a margin of 4.0%.

The new facility also provides for a line of credit in the amount of $30.0 million with maturity in May 2022. A commitment fee is payable quarterly to the lender under the facility. Interest on the line of credit is at the Alternate Base Rate plus a margin of 2.75% or a Eurocurrency rate plus a margin of 3.75%. There were no drawings as of or for the periods ended September 30, 2017 on the new line of credit.

The interest rate margins on the facility are subject to a decrease of 0.25% with a defined improvement in the Company’s leverage ratio. The obligations under the bank facilities are guaranteed by the Company and each subsidiary with certain exceptions. In addition, the bank credit facilities are collateralized by substantially all of the Company’s assets.

The bank credit facilities contain various negative and affirmative covenants that restrict, among other things, incurrence of additional indebtedness, limitations on the amount of dividends that can be paid, redemptions of stock, other distributions to shareholders and sales of assets. In addition, there are financial covenants consisting of a debt coverage ratio, leverage ratio and a maximum level of capital expenditures.

The Company incurred $6.3 million in underwriting fees, original issue discount and legal costs in 2017 in conjunction with the new debt facility. Such costs and the existing debt original issue discount, deferred financing costs, underwriting fees and legal costs were accounted for in accordance with accounting standards for extinguishment of debt instruments. The Company compared each syndicated lenders’ loan under the old term loan with the syndicated lenders’ loan under the new term loans. All loans under the new term loan were deemed substantially different. As such, the Company deferred the costs of the new debt as a reduction of the carrying value of the new debt. In addition, the Company recognized the repayment of the existing debt instruments as a debt extinguishment incurring a loss on early extinguishment of debt of $4.8 million.

The Company had an existing revolving credit facility which was repaid and terminated on May 4, 2017. Drawings for the nine months ended September 30, 2017 amounted to $10.0 million. Such draws were used primarily to fund the construction of the SEA-US submarine cable system described in Note 11. There were no amounts drawn as of or for the nine months ended September 30, 2016.

One of the syndicated lenders in both the new term loan and the term loan retired is a cooperative bank owned by its customers. Annually, this bank distributes patronage in the form of cash and stock in the cooperative based on the Company’s average outstanding loan balance. The Company recognizes the patronage, generally as declared, as a reduction of interest expense. The stock component is recognized at its stated cost basis with the accumulated stock investment included in other noncurrent assets. The investment balance as of September 30, 2017 was not significant.

Maturities

The annual requirements for principal payments on long-term debt as of September 30, 2017 are as follows (dollars in thousands):


Year ended December 31,
2017 (remaining months)	$	2,563
2018		10,250
2019		13,125
2020		16,000
2021		16,000
Thereafter		259,500
	$	317,438

Capitalized Interest

Interest capitalized by the Company amounted to $0.5 million and $0.4 million for the three months ended September 30, 2017 and 2016, respectively. Interest capitalized by the Company amounted to $1.6 million and $1.1 million for the nine months ended September 30, 2017 and 2016, respectively.