Long-term Debt

12 Months Ended

Dec. 31, 2019

14. Long-term Debt

Our long-term debt carrying value consisted of the following:



	Successor		Predecessor
	December 31,		December 31,
(Dollars in millions)	2019		2018
11.00 % Exit Notes due 2024	$	2,097	$	—
5.125% Senior Notes due 2020	—		364
5.875% Exchangeable Senior Notes due 2021	—		1,194
7.75% Senior Notes due 2021	—		743
4.50% Senior Notes due 2022	—		644
8.25% Senior Notes due 2023	—		742
9.875% Senior Notes due 2024	—		781
9.875% Senior Notes due 2025	—		588
6.50% Senior Notes due 2036	—		447
6.80% Senior Notes due 2037	—		255
7.00% Senior Notes due 2038	—		456
9.875% Senior Notes due 2039	—		245
6.75% Senior Notes due 2040	—		457
5.95% Senior Notes due 2042	—		369
Term Loan Agreement due 2020	—		308
Finance and Other Lease Obligations	64		69
Total Senior Notes and Other Debt	2,161		7,662
Less: Amounts Due in One Year	10		57
Long-term Debt	$	2,151	$	7,605

The accrued interest on our borrowings was $12 million and $140 million at December 31, 2019 and 2018, respectively. The following is a summary of scheduled long-term debt maturities by year (dollars in millions):



2020	$	10
2021	7
2022	7
2023	8
2024	2,105
Thereafter	24
	$	2,161

Successor Exit Notes

On the Effective Date pursuant to the terms of the Plan, we issued unsecured 11.00% Exit Notes due in 2024 for an aggregate principal amount of $2.1 billion (of which $500 million was in the form of Exit Takeback Notes to existing creditors on the senior notes being cancelled). Interest on the Exit Notes will accrue at the rate of 11.00% per annum and will be payable semiannually in arrears on June 1 and December 1, commencing on June 1, 2020.

At any time prior to December 1, 2021, the Company may redeem the Exit Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any, to the redemption date (subject to the right of the noteholders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date). On and after December 1, 2021, the Company may redeem all or part of the 11.00% Exit Notes at redemption prices (expressed as percentages of the principal amount)

equal to (i) 105.500% for the twelve-month period beginning on December 1, 2021; (ii) 102.750% for the twelve-month period beginning on December 1, 2022; and (iii) 100.000% for the twelve-month period beginning December 1, 2023 and at any time thereafter, plus accrued and unpaid interest at the redemption date.

In addition, at any time prior to December 1, 2022, the Company may redeem up to $500 million in the aggregate principal amount of the 11.00% Exit Notes at a redemption price of 103.00% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date.

If a change of control (as defined in the Indenture) occurs, holders of the Exit Notes will have the right to require the Company to repurchase all or any part of their Exit Notes at a purchase price equal to 101% of the aggregate principal amount of the 11.00% Exit Notes repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

The Exit Notes are guaranteed on a senior basis by the Company’s existing domestic subsidiaries and certain foreign subsidiaries that guarantee its obligations under the Exit Credit Agreements on a full and unconditional basis.

The Indenture governing the Exit Notes contains covenants that limit, among other things, the Company’s ability and the ability of certain of its subsidiaries, to: incur, assume or guarantee additional indebtedness; pay dividends or distributions on capital stock or redeem or repurchase capital stock; make investments; sell stock of its subsidiaries; transfer or sell assets; create liens; enter into transactions with affiliates; and enter into mergers or consolidations.

At such time as (1) the Exit Notes have an investment grade rating from both of Moody’s Investors Service, Inc. and Standard and Poor’s Ratings Services and (2) no default has occurred and is continuing under the Indenture, certain of these and other covenants will be suspended and cease to be in effect so long as the rating assigned by either Moody’s or S&P has not subsequently declined to below Baa3 or BBB- (or equivalent).

The Indenture also provides for certain customary events of default, including, among others, nonpayment of principal or interest, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, bankruptcy and insolvency events, and cross acceleration, which would permit the principal, premium, if any, interest and other monetary obligations on all the then outstanding Exit Notes to be declared due and payable immediately.

Term Loan Agreement

The Term Loan Agreement was due in 2020 and comprised $50 million of the current portion of long-term debt as of December 31, 2018. On July 3, 2019, the Company repaid in full its outstanding indebtedness under the Term Loan. See Note 13 – Short-term Borrowings and Other Debt Obligations for additional information.

Predecessor Senior Notes, Exchangeable Senior Notes and Tender Offers

Prior to the Petition Date, we issued various senior notes, all of which rank equally with our existing and future senior unsecured indebtedness, which have semi-annual interest payments and no sinking fund requirements. As of the Petition Date, the Predecessor’s senior notes and exchangeable senior notes and related unpaid accrued interest totaling $7.6 billion were placed into liabilities subject to compromise during the bankruptcy period. The related unamortized debt issuance and debt discounts were expensed to “Reorganization Items” on the Consolidated Statements of Operations. See “Note 2 – Emergence from Chapter 11 Bankruptcy Proceedings” for details regarding reorganization items and liabilities subject to compromise. Upon emergence from bankruptcy on December 13, 2019, the Predecessor’s senior and exchangeable senior notes were cancelled pursuant to the terms of the Plan, resulting in a gain on extinguishment of debt of $4.3 billion recorded in “Reorganization Items” on the Consolidated Statements of Operations.

Predecessor Exchangeable Senior Notes

On June 7, 2016, we issued exchangeable notes with a par value of $1.265 billion and an interest rate of 5.875%. The notes have a conversion price of $7.74 per share and are exchangeable into a total of 163.4 million shares of the Company upon the occurrence of certain events on or after January 1, 2021. The notes mature on July 1, 2021. We have the choice to settle an exchange of the notes in any combination of cash or shares. Before the Petition date, the exchange feature was reported with a carrying amount of $97 million in “Capital in Excess of Par Value” on the accompanying Consolidated Balance Sheets. Upon emergence from bankruptcy on December 13, 2019, the exchangeable senior notes were cancelled pursuant to the terms of the Plan, resulting in a gain recorded at face value in “Reorganization Items” on the Consolidated Statement of Operations. In 2019 (through the Petition Date), full year 2018 and 2017, interest expense related to accrued interest and amortization of the discount on the notes was $50 million, $99 million and $97 million, respectively.

Predecessor Senior Notes

Upon the Effective Date, the notes were cancelled pursuant to the terms of the Plan, resulting in a gain recorded at face value included in “Reorganization Items” on the Consolidated Statement of Operations.

In February 2018, we repaid in full our 6.00% senior notes due March 2018. On February 28, 2018, we issued $600 million in aggregate principal amount of our 9.875% senior notes due 2025.

In June 2017, we repaid in full our 6.35% senior notes on the maturity date. On June 26, 2017, we issued an additional $250 million aggregate principal amount of our 9.875% senior notes due 2024. These notes were issued as additional securities under an indenture pursuant to which we previously issued $540 million aggregate principal amount of our 9.875% senior notes due 2024.

Predecessor Tender Offers

The February 2018 debt offering partially funded a concurrent tender offer to purchase for cash any and all of our 9.625% senior notes due 2019. We settled the tender offer in cash for the amount of $475 million, retiring an aggregate face value of $425 million and accrued interest of $20 million. In April 2018, we repaid the remaining principal outstanding on an early redemption of the bond. We recognized a cumulative loss of $34 million on these transactions in “Bond Tender and Call Premium” on the accompanying Consolidated Statements of Operations.