LONG-TERM DEBT

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



	June 30, 2017			December 31, 2016
7.50% senior unsecured notes due 2021	$	—		$	300,000
Unamortized debt issuance costs on 2021 notes	—			(3,708		)
7.50% senior unsecured notes due 2021, net	—			296,292

5.625% senior unsecured notes due 2022	400,000			400,000
Unamortized debt issuance costs on 2022 notes	(5,376		)	(5,909		)
5.625% senior unsecured notes due 2022, net	394,624			394,091

5.625% senior unsecured notes due 2023	350,000			350,000
Unamortized discount on 2023 notes	(4,599		)	(4,894		)
Unamortized debt issuance costs on 2023 notes	(4,262		)	(4,596		)
5.625% senior unsecured notes due 2023, net	341,139			340,510

6.375% senior unsecured notes due 2025	325,000			—
Unamortized discount on 2025 notes	(4,843		)	—
Unamortized debt issuance costs on 2025 notes	(4,687		)	—
6.375% senior unsecured notes due 2025, net	315,470			—

SemGroup corporate revolving credit facility	164,000			20,000
SemMexico revolving credit facility	—			—
Capital leases	39			51
Total long-term debt, net	1,215,272			1,050,944
Less: current portion of long-term debt	28			26
Noncurrent portion of long-term debt, net	$	1,215,244		$	1,050,918

Senior unsecured notes due 2021

On March 15, 2017, we purchased $290 million of our outstanding $300 million, 7.50% senior unsecured notes due 2021 (the “2021 Notes”) through a tender offer. The purchase price included a premium and interest to the purchase date. On March 17, 2017, a notice of redemption was issued for the remaining $10 million of 2021 Notes which were not purchased through the tender offer pursuant to the redemption and satisfaction and discharge provisions of the indenture governing the 2021 Notes. These remaining 2021 Notes were redeemed on June 15, 2017, including a redemption premium and accrued unpaid interest to the redemption date. We recorded a loss on early extinguishment of $19.9 million for the above transactions, which included premiums totaling $15.9 million and the write off of $3.6 million of associated unamortized debt issuance costs.

No interest was incurred related to the 2021 Notes for the three months ended June 30, 2017. For the three months ended June 30, 2016, we incurred $5.8 million of interest expense related to the 2021 Notes including amortization of debt issuance costs. For the six months ended June 30, 2017 and 2016, we incurred $5.0 million and $11.7 million, respectively, of interest expense related to the 2021 Notes including amortization of debt issuance costs.

Senior unsecured notes due 2022

At June 30, 2017, we had outstanding $400 million of 5.625% senior unsecured notes due 2022 (the “2022 Notes”). For the three months ended June 30, 2017 and 2016, we incurred $5.9 million and $5.9 million, respectively, of interest expense related to the 2022 Notes including amortization of debt issuance costs. For the six months ended June 30, 2017 and 2016, we incurred $11.8 million and $11.7 million, respectively, of interest expense related to the 2022 Notes including amortization of debt issuance costs.

Senior unsecured notes due 2023

At June 30, 2017, we had outstanding $350 million of 5.625% senior unsecured notes due 2023 (the “2023 Notes”). For the three months ended June 30, 2017 and 2016, we incurred $5.2 million and $5.2 million, respectively, of interest expense related to the 2023 Notes including amortization of debt issuance costs and discount. For the six months ended June 30, 2017 and 2016, we incurred $10.4 million and $10.4 million, respectively, of interest expense related to the 2023 Notes including amortization of debt issuance costs.

Senior unsecured notes due 2025

On March 15, 2017, we sold $325 million of 6.375% senior unsecured notes due 2025 (the “2025 Notes”). The 2025 Notes were sold at 98.467% of par, a discount of $5.0 million. The discount is reported as a reduction to the face value of the 2025 Notes on our condensed consolidated balance sheets and is being amortized over the life of the 2025 Notes using the interest method.

The net proceeds from the offering of $315.5 million, after the discount and $4.5 million of initial purchasers’ fees and offering expenses, together with cash on hand, were used to purchase and redeem the 2021 Notes.

The 2025 Notes were issued under an indenture (the “Indenture”) entered into on March 15, 2017, by and among the Company, the Guarantors and Wilmington Trust, National Association, as trustee (the “Trustee”). The 2025 Notes are fully and unconditionally guaranteed on a senior unsecured basis by our existing subsidiaries that guarantee our revolving credit facility. Interest on the 2025 Notes accrues at a rate of 6.375% per annum and is payable in cash semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017. The 2025 Notes will mature on March 15, 2025.

Prior to March 15, 2020, we may redeem the 2025 Notes, in whole or in part, at any time at a price equal the principal amount of the 2025 Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a “make-whole premium.” Additionally, from time to time before March 15, 2020, we may choose to redeem up to 35% of the original principal amount of the 2025 Notes at a redemption price equal to 106.375% of the face amount thereof plus accrued and unpaid interest to, but not including, the redemption date, with the net cash proceeds that we raise in one or more equity offerings. On or after March 15, 2020, we may redeem the 2025 Notes, in whole or in part, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon to, but not including, the redemption date if redeemed during the twelve month period beginning on March 15 of the years indicated below:



Year		Percentage
2020		103.188%
2021		101.594%
2022 and thereafter		100.000%

Upon the occurrence of a change of control triggering event, as defined in the Indenture, each holder of the Notes will have the right to require the Company to repurchase some or all of such holder’s 2025 Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the repurchase date.

The Indenture contains customary covenants restricting our ability and the ability of our restricted subsidiaries to: (i) incur additional indebtedness or issue certain preferred shares; (ii) pay dividends and make certain distributions, investments and other restricted payments; (iii) create certain liens; (iv) sell assets; (v) enter into transactions with affiliates; (vi) enter into sale and lease-back transactions; (vii) merge, consolidate, sell or otherwise dispose of all or substantially all of our assets; and (viii) designate our subsidiaries as unrestricted subsidiaries under the Indenture. These covenants are subject to a number of important limitations and exceptions, including certain provisions permitting us, subject to the satisfaction of certain conditions, to transfer assets to certain of our unrestricted subsidiaries.

The Indenture also contains customary events of default. Upon an event of default under the Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the 2025 Notes then outstanding may declare all amounts owing under the 2025 Notes to be due and payable.

For the three and six months ended June 30, 2017, we incurred $5.4 million and $6.4 million, respectively, of interest expense related to the 2025 Notes, including amortization of debt issuance costs and discount.

Registration rights agreement

In connection with the closing of the offering of the 2025 Notes on March 15, 2017, the Company and the Guarantors entered into a registration rights agreement (the “Registration Rights Agreement”). Under the Registration Rights Agreement, the Company and the Guarantors have agreed to file a registration statement with the Securities and Exchange Commission so that holders of the 2025 Notes can exchange the 2025 Notes and the related guarantees for registered notes and guarantees that have substantially identical terms as the 2025 Notes and related guarantees within 365 days after the original issuance of the 2025 Notes. In certain circumstances, the Company and the Guarantors may be required to file a shelf registration statement to cover resales of the 2025 Notes. We are required to pay additional interest on the 2025 Notes if we fail to comply with our obligations to register the 2025 Notes and related guarantees within the specified time periods.

Corporate revolving credit facility

At June 30, 2017, we had $164.0 million of outstanding cash borrowings on our $1.0 billion revolving credit facility, of which $34.0 million incurred interest at the Alternate Base Rate (“ABR”) and $130.0 million incurred interest at the Eurodollar rate. At June 30, 2017, the ABR rate in effect was 5.50% and the Eurodollar rate in effect was 3.47%. The facility matures on March 15, 2021.

The corporate revolving credit facility is guaranteed by all of SemGroup’s material domestic subsidiaries, with the exception of Maurepas Pipeline LLC, and secured by a lien on substantially all of the property and assets of SemGroup and the other loan parties, subject to customary exceptions.

At June 30, 2017, we had outstanding letters of credit under the facility of $33.8 million, for which the rate in effect was 2.25%, and outstanding secured bi-lateral letters of credit of $50.3 million, for which the rate in effect was 1.75%. Secured bi-lateral letters of credit are external to the facility and do not reduce availability for borrowing on the credit facility.

We incurred interest expense related to the corporate revolving credit facility of $3.2 million and $1.2 million for the three months ended June 30, 2017 and 2016, respectively, including letters of credit and amortization of debt issuance costs. We incurred interest expense related to the corporate revolving credit facility of $5.6 million and $2.6 million for the six months ended June 30, 2017 and 2016, respectively, including letters of credit and amortization of debt issuance costs.

SemMexico revolving credit facility

At June 30, 2017, SemMexico had a $70 million Mexican pesos (U.S. $3.9 million at the June 30, 2017 exchange rate) revolving credit facility, which matures in May 2018. There were no outstanding borrowings on the facility at June 30, 2017. Borrowings are unsecured and bear interest at the bank prime rate in Mexico plus 1.50%.

At June 30, 2017, SemMexico had an outstanding letter of credit of $292.8 million Mexican pesos (U.S. $16.2 million at the June 30, 2017 exchange rate). The letter of credit was issued for a fee of 0.28%.

Capitalized interest

During the six months ended June 30, 2017 and 2016, we capitalized interest of $12.0 million and $3.9 million, respectively. As described in Note 1, capitalized interest for the prior year has been recast.

Fair value

We estimate the fair value of the 2022 Notes, the 2023 Notes and the 2025 Notes to be $385 million, $343 million and $316 million, respectively, at June 30, 2017, based on unadjusted, transacted market prices near the measurement date, which are categorized as Level 2 measurements.