LONG-TERM DEBT

Our long-term debt consisted of the following (in thousands):



	September 30, 2012		December 31, 2011
SemGroup corporate revolving credit facility	$	189,500	$	82,000
Rose Rock credit facility	—		—
SemLogistics credit facility	—		23,180
SemMexico credit facility	2,072		4,046
Capital leases	93		109
Total long-term debt	$	191,665	$	109,335
less: current portion of long-term debt	2,096		26,058
Noncurrent portion of long-term debt	$	189,569	$	83,277

SemGroup corporate credit agreement

Our revolving credit facility had a capacity of $300 million at September 30, 2012. The capacity was reduced from $320 million to $300 million during the first quarter of 2012 following the close of Rose Rock’s IPO. This capacity may be used either for cash borrowings or letters of credit, although the maximum letter of credit capacity is $250 million. At September 30, 2012, we had outstanding cash borrowings of $189.5 million on this facility and outstanding letters of credit of $2.1 million.

At September 30, 2012, $90 million of our outstanding cash borrowings incurred interest at the Eurodollar rate and $99.5 million incurred interest at the alternate base rate (“ABR”). The interest rate in effect at September 30, 2012, on $50 million of Eurodollar rate borrowings was 3.23%, calculated as LIBOR of 0.7334% plus a margin of 2.5%. The interest rate in effect at September 30, 2012, on $40 million of Eurodollar rate borrowings was 2.96%, calculated as LIBOR of 0.46060% plus a margin of 2.5%. The interest rate in effect at September 30, 2012, on the $99.5 million of ABR borrowings was 4.75%, calculated as the prime rate of 3.25% plus a margin of 1.5%.

At September 30, 2012, the commitment rate in effect on letters of credit was 2.5%. In addition, a fronting fee of 0.25% is charged on outstanding letters of credit. A commitment fee of 0.5% is charged on any unused capacity on the revolving credit facility.

At September 30, 2012, $3.7 million in capitalized loan fees, net of accumulated amortization, was recorded in other noncurrent assets, which is being amortized over the life of the loan.

We recorded interest expense related to the SemGroup revolving credit facility of $1.7 million and $4.9 million for the three months and nine months ended September 30, 2012, respectively, including amortization of debt issuance costs.

At September 30, 2012, we were in compliance with the terms of the credit agreement.

Rose Rock credit facility

At September 30, 2012, there were no revolving cash borrowings on Rose Rock’s $150 million revolving credit facility. We had $38.2 million in outstanding letters of credit, and the rate in effect was 2.25%. In addition, a fronting fee of 0.25% is charged on outstanding letters of credit. A commitment fee that ranges from 0.375% to 0.50%, depending on a leverage ratio specified in the credit agreement, is charged on any unused capacity of the revolving credit facility. We had $8.4 million of Secured Bilateral Letters of Credit outstanding and the interest rate in effect on $2.7 million of Secured Bilateral Letters of Credit was 1.75%. The interest rate in effect on $5.7 million of Secured Bilateral Letters of Credit was 2.00%. Secured Bilateral Letters of Credit are external to the facility and do not reduce revolver availability. At September 30, 2012, we were in compliance with the terms of the credit agreement.

In September 2012, we amended the credit agreement such that the revolving credit facility may under certain conditions be increased by up to an additional $400 million. The previous agreement provided for an increase of up to $200 million.

We recorded $0.5 million and $1.4 million of interest expense during the three months and nine months ended September 30, 2012, respectively, including amortization of debt issuance costs.

At September 30, 2012, $1.6 million in capitalized loan fees, net of accumulated amortization, was recorded in other noncurrent assets, which is being amortized over the life of the facility.

SemLogistics credit facilities

SemLogistics entered into a credit agreement in December 2010, which included a £15 million term loan and a £15 million revolving credit facility. This facility was terminated in March 2012.

At December 31, 2011, unamortized debt issuance costs of $0.8 million were included in other noncurrent assets. This balance was amortized to interest expense during first quarter 2012.

During February 2011, we entered into three interest swap agreements. The intent of the swaps was to offset a portion of the variability in interest payments due under the term loan. These swaps were terminated in March 2012 with a loss on closure of $0.4 million, including a reclass of $0.3 million from accumulated other comprehensive income to earnings.

SemMexico facilities

During 2010, SemMexico entered into a credit agreement that allowed SemMexico to borrow up to 80 million Mexican pesos at any time through June 2011. Borrowings on this facility are required to be repaid with monthly payments through May 2013. At September 30, 2012, borrowings of 26.7 million Mexican pesos (U.S. $2.1 million at the September 30, 2012 exchange rate) were outstanding on this facility. Borrowings are unsecured and bear interest at the bank prime rate in Mexico plus 1.5%. At September 30, 2012, the interest rate in effect was 6.30%, calculated as 1.5% plus the bank prime rate of 4.80%.

SemMexico also has outstanding letters of credit of 292.8 million Mexican pesos at September 30, 2012 (U.S. $22.8 million at the September 30, 2012 exchange rate). Fees are generally charged on outstanding letters of credit at a rate of 0.46%.

On June 13, 2012, SemMexico entered into an additional revolving credit agreement that allows SemMexico to borrow up to 44 million Mexican pesos (U.S. $3.4 million at the September 30, 2012 exchange rate) at any time during the term of the facility, which matures in June 2015. Borrowings are unsecured and bear interest at the bank prime rate in Mexico plus 2.0%. At September 30, 2012, there were no outstanding borrowings on this facility.

On July 13, 2012, SemMexico entered into an additional credit agreement that allows SemMexico to borrow up to 56 million Mexican pesos (U.S. $4.4 million at the September 30, 2012 exchange rate) at any time during the term of the facility, which matures in July 2013. Borrowings are unsecured and bear interest at the bank prime rate in Mexico plus 1.7%. At September 30, 2012, there were no outstanding borrowings on this facility.

SemMexico recorded interest expense of $0.1 million and $0.2 million during the three months and nine months ended September 30, 2012, respectively, related to these facilities. At September 30, 2012, we were in compliance with the terms of these facilities.

Fair value

We estimate that the fair value of our long-term debt was not materially different than the recorded values at September 30, 2012, and is categorized as a Level 3 measurement. It is our belief that neither the market interest rates nor our credit profile have changed significantly enough to have had a material impact on the fair value of our debt outstanding at September 30, 2012.