Debt

The Company’s debt consists of the following for periods presented below (in thousands):



							As of June 30, 2017
	June 30, 2017			December 31, 2016			Contractual Interest Rate			Effective Interest Rate
	June 30, 2017			December 31, 2016			Contractual Interest Rate			Effective Interest Rate			Maturity
Corporate-level
Revolving Credit Facility	$	60,000		$	180,000		varies		⁽¹⁾	3.46	%	⁽¹⁾	December 2018
2020 Notes	225,000			225,000			4.00	%		6.60	%		July 2020
2024 Notes	350,000			—			5.88	%		5.88	%		February 2024
Project-level
Fixed interest rate
El Arrayán EKF term loan	101,984			103,904			5.56	%		5.56	%		March 2029
Santa Isabel term loan	105,953			107,090			4.57	%		4.57	%		September 2033
Variable interest rate
Ocotillo commercial term loan ⁽²⁾	188,906			193,257			2.90	%		3.82	%	⁽³⁾	August 2020
Lost Creek term loan	100,145			103,846			3.07	%		6.51	%	⁽³⁾	September 2027
El Arrayán commercial term loan	92,713			94,458			4.17	%		5.70	%	⁽³⁾	March 2029
Spring Valley term loan	127,445			130,658			3.05	%		5.19	%	⁽³⁾	June 2030
Ocotillo development term loan	101,200			102,300			3.25	%		4.42	%	⁽³⁾	August 2033
St. Joseph term loan ⁽²⁾	168,016			162,356			2.70	%		3.86	%	⁽³⁾	November 2033
Western Interconnect term loan ⁽²⁾	54,395			—			3.05	%		3.97	%	⁽³⁾	April 2027
Imputed interest rate
Hatchet Ridge financing lease obligation	196,363			202,593			1.43	%		1.43	%		December 2032
	1,872,120			1,605,462
Unamortized premium/discount, net⁽⁴⁾	(14,791		)	(17,019		)
Unamortized financing costs	(30,684		)	(24,771		)
Total debt, net	$	1,826,645		1,563,672

As reflected on the consolidated balance sheets
Revolving credit facility	$	60,000		$	180,000
Current portion of long-term debt, net of financing costs	54,975			48,716
Long term debt, net of financing costs	1,711,670			1,334,956
Total debt, net	$	1,826,645		$	1,563,672


⁽¹⁾	Refer to Revolving Credit Facility for interest rate details.


⁽²⁾	The amortization for the Ocotillo commercial term loan, the St. Joseph term loan, and the Western Interconnect term loan are through June 2030, September 2036 and March 2036, respectively, which differs from the stated maturity date of such loans due to prepayment requirements.


⁽³⁾	Includes impact of interest rate derivatives. See Note 10, Derivative Instruments, for discussion of interest rate derivatives.


⁽⁴⁾	Premium amount is related to the Lost Creek term loan and discount amount is related to the 2020 Notes.

Interest and commitment fees incurred and interest expense for debt consisted of the following (in thousands):



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Corporate-level interest and commitment fees incurred	$	8,497	$	4,952	$	15,612	$	10,005
Project-level interest and commitment fees incurred⁽¹⁾	13,107		13,356		25,468		26,444
Amortization of debt discount/premium, net	1,125		1,042		2,227		2,074
Amortization of financing costs	1,994		1,752		3,852		3,498
Other interest	116		173		235		315
Interest expense	$	24,839	$	21,275	$	47,394	$	42,336


⁽¹⁾	Includes reclassification of realized gains (losses) on derivative instruments that qualifies as cash flow hedges from accumulated OCI into interest expense and the ineffective portion of the instruments.

Corporate Level Debt

Revolving Credit Facility

As of June 30, 2017, $403.7 million was available for borrowing under the $500.0 million Revolving Credit Facility. The Revolving Credit Facility is secured by pledges of the capital stock and ownership interests in certain of the Company’s holding company subsidiaries. The Revolving Credit Facility contains a broad range of covenants that, subject to certain exceptions, restrict the Company’s holding company subsidiaries' ability to incur debt, grant liens, sell or lease assets, transfer equity interests, dissolve, pay distributions and change its business. As of June 30, 2017, the Company's holding company subsidiaries were in compliance with covenants contained in the Revolving Credit Facility.

The loans under the Company's Revolving Credit Facility are either base rate loans or Eurodollar rate loans. The base rate loans accrue interest at the fluctuating rate per annum equal to the greatest of the (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the Eurodollar rate that would be in effect for a Eurodollar rate loan with an interest period of one month plus 1.0%, plus an applicable margin ranging from 1.25% to 1.75% (corresponding to applicable leverage ratios of the borrower). The Eurodollar rate loans accrue interest at a rate per annum equal to International Continental Exchange London Interbank Offered Rate (LIBOR), as published by Reuters plus an applicable margin ranging from 2.25% to 2.75% (corresponding to applicable leverage ratios of the borrower). Under the Revolving Credit Facility, the Company pays a revolving commitment fee equal to the average of the daily difference between revolving commitments and the total utilization of revolving commitments times 0.50%. The Company also pays letter of credit fees.

As of June 30, 2017 and December 31, 2016, letters of credit of $36.3 million and $31.7 million were issued under the Revolving Credit Facility.

Unsecured Senior Notes due 2024

In January 2017, the Company issued unsecured senior notes with an aggregate principal amount of $350.0 million (Unsecured Senior Notes or 2024 Notes). Net proceeds to the Company were approximately $345.0 million, after deducting the initial purchasers’ discount, commissions and transaction expenses. The 2024 Notes bear interest at a rate of 5.875% per year, payable semiannually in arrears on February 1 and August 1, beginning on August 1, 2017 and maturing on February 1, 2024, unless repurchased or redeemed at an earlier date. The 2024 Notes are guaranteed on a senior unsecured basis by Pattern US Finance Company, one of the Company's subsidiaries.

Convertible Senior Notes due 2020

In July 2015, the Company issued $225.0 million aggregate principal amount of 4.00% convertible senior notes due 2020 (Convertible Senior Notes or 2020 Notes). The 2020 Notes bear interest at a rate of 4.00% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2016. The 2020 Notes will mature on July 15, 2020. The 2020 Notes were sold in a private placement.

The 2020 Notes are guaranteed on a senior unsecured basis by a subsidiary of the Company and are general unsecured obligations of the Company. The obligations rank senior in rights of payment to the Company’s subordinated debt, equal in right of payment to the Company’s unsubordinated debt and effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The following table presents a summary of the equity and liability components of the 2020 Notes (in thousands):



	June 30, 2017			December 31, 2016
Principal	$	225,000		$	225,000
Less:
Unamortized debt discount	(15,874		)	(18,196		)
Unamortized financing costs	(3,348		)	(3,894		)
Carrying value of convertible senior notes	$	205,778		$	202,910
Carrying value of the equity component ⁽¹⁾	$	23,743		$	23,743


⁽¹⁾	Included in the consolidated balance sheets as additional paid-in capital, net of $0.7 million in equity issuance costs.

Project level debt

Western Interconnect

In April 2017, in connection with the Broadview Project acquisition, the Company assumed a $51.2 million senior construction loan facility, including accrued interest, which was immediately extinguished and concurrently, the Company entered into a variable rate term loan maturing on April 21, 2027 for $54.4 million. The interest rate on the term loan is LIBOR plus 2.00% (with periodic increases of 0.25% every four years).

Collateral for the term loan includes Western Interconnect's tangible assets and contractual rights and cash on deposit with the depository agent. Such loan agreement contains a broad range of covenants that, subject to certain exceptions, restrict Western Interconnect's ability to incur debt, grant liens, sell or lease certain assets, transfer equity interests, dissolve, make distributions, or change its business.