NOTE 6 – LONG-TERM DEBT

The mortgage notes payable and pollution control revenue bonds are secured on a parity basis by a Master First Mortgage Indenture, Deed of Trust and Security Agreement except for three unsecured notes in the aggregate amount of $47.7 million as of March 31, 2017. Substantially all our assets, rents, revenues and margins are pledged as collateral. The Springerville certificates are secured by the assets of Springerville Unit 3. All long-term debt contains certain restrictive financial covenants, including a debt service ratio requirement and equity to capitalization ratio requirement.

We have a secured revolving credit facility with Bank of America, N.A. and CoBank, ACB as Joint Lead Arrangers in the amount of $750 million (“Revolving Credit Agreement”) that expires on July 26, 2019. We had no outstanding borrowings as of March 31, 2017 and December 31, 2016. There is a 364-day, direct pay letter of credit issued under the Revolving Credit Agreement and provided by Bank of America, N.A. for the $46.8 million Moffat County, CO pollution control revenue bonds. As of March 31, 2017, we have $576.8 million in total aggregate availability (including $374.5 million under the commercial paper back-up sublimit) under the Revolving Credit Agreement.

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


	March 31,		December 31,
	2017		2016
Total debt	$	3,211,220	$	3,259,721
Less debt issuance costs		(21,818)		(22,255)
Less debt discounts		(10,518)		(10,569)
Plus debt premiums		20,219		20,711
Total debt adjusted for discounts, premiums and debt issuance costs		3,199,103		3,247,608
Less current maturities		(77,101)		(107,903)
Long-term debt	$	3,122,002	$	3,139,705

We are exposed to certain risks in the normal course of operations in providing a reliable and affordable source of wholesale electricity to our Members. These risks include interest rate risk, which represents the risk of increased operating expenses and higher rates due to increases in interest rates related to anticipated future long-term borrowings. To manage this exposure, we have entered into forward starting interest rate swaps to hedge a portion of our future long‑term debt interest rate exposure. We anticipate settling these swaps in conjunction with the issuance of future long-term debt. See Note 2 ‑ Accounting for Rate Regulation and Note 11 ‑ Fair Value.

The terms of the interest rate swap contracts are as follows (dollars in thousands):

Notional

Fixed

Benchmark Interest

Effective

Maturity

Amount

Rate (1)

Rate (2)

Date

Interest rate swap - April 2016

90,000

2.355

30 year - LIBOR

April 2019

April 2049

Interest rate swap - June 2016

80,000

2.304

30 year - LIBOR

June 2019

June 2049

170,000

(1)

We will pay.

(2)

We will receive.