Long-Term Debt

The Company's outstanding debt is summarized below:



		As of December 31, 2018							As of December 31, 2017
	Maturity Date	Principal		Debt Issuance Costs			Carrying Amount		Principal		Debt Issuance Costs			Carrying Amount
		(in thousands)
Amended Credit Facility	September 14, 2023	$	—	$	—		$	—	$	—	$	—		$	—
7.0% Senior Notes ⁽¹⁾	October 15, 2022	350,000		(3,210		)	346,790		350,000		(4,033		)	345,967
8.75% Senior Notes ⁽²⁾	June 15, 2025	275,000		(4,403		)	270,597		275,000		(5,080		)	269,920
Lease Financing Obligation ⁽³⁾	August 10, 2020	1,859		—			1,859		2,328		(2		)	2,326
Total Debt		$	626,859	$	(7,613	)	$	619,246	$	627,328	$	(9,115	)	$	618,213
Less: Current Portion of Long-Term Debt ⁽⁴⁾		1,859		—			1,859		469		—			469
Total Long-Term Debt		$	625,000	$	(7,613	)	$	617,387	$	626,859	$	(9,115	)	$	617,744


(1)	The aggregate estimated fair value of the 7.0% Senior Notes was approximately $329.7 million and $356.1 million as of December 31, 2018 and 2017, respectively, based on reported market trades of these instruments.


(2)	The aggregate estimated fair value of the 8.75% Senior Notes was approximately $264.7 million and $305.3 million as of December 31, 2018 and 2017, respectively, based on reported market trades of these instruments.


(3)	The aggregate estimated fair value of the Lease Financing Obligation was approximately $1.8 million and $2.1 million as of December 31, 2018 and 2017, respectively. As there is no active, public market for the Lease Financing Obligation, the aggregate estimated fair value was based on market-based parameters of comparable term secured financing instruments.


(4)	The current portion of long-term debt includes the current portion of the Lease Financing Obligation. The Company has elected to exercise the early buyout option pursuant to which the Company will purchase the equipment for $1.8 million on February 10, 2019.

Amended Credit Facility

On September 14, 2018, the Company entered into a fourth amended and restated credit facility (the "Amended Credit Facility"), which extends the maturity date to September 14, 2023, and provides for a maximum credit amount of $1.5 billion, an initial elected commitment amount of $500.0 million and an initial borrowing base of $500.0 million. Due to the amendment, the Company recognized a loss on extinguishment of debt of $0.3 million on the Consolidated Statements of Operations for the year ended December 31, 2018. As credit support for future payment under a contractual obligation, a $26.0 million letter of credit has been issued under the Amended Credit Facility, which reduced the available borrowing capacity of the Amended Credit Facility as of December 31, 2018 to $474.0 million. There were no borrowings under the Amended Credit Facility (or, as applicable, the facility then in place) in 2018 or 2017.

Interest rates are either adjusted LIBOR plus applicable margins of 1.5% to 2.5% or an alternate base rate plus applicable margins of 0.5% to 1.5%, and the unused commitment fee is between 0.375% to 0.5%. The applicable margin and the unused commitment fee rate are determined based on borrowing base utilization.

The borrowing base under the Amended Credit Facility is determined at the discretion of the lenders, based on the collateral value of the Company's proved reserves that have been mortgaged to the lenders, and is subject to regular re-determination on or about April 1 and October 1 of each year, as well as following any property sales. Borrowing bases are computed based on proved oil, natural gas and NGL reserves, hedge positions and estimated future cash flows from the reserves calculated using future commodity pricing provided by the Company's lenders, as well as any other outstanding debt. Lower commodity prices could result in a decreased borrowing base.

The Amended Credit Facility contains certain financial covenants. The Company is currently in compliance with all financial covenants and has complied with all financial covenants since issuance. If the Company fails to comply with the covenants or other terms of any agreements governing the Company's debt, the lenders under the Amended Credit Facility and holders of the Company's senior notes may have the right to accelerate the maturity of the relevant debt and foreclose upon the collateral, if any, securing that debt. The occurrence of any such event would adversely affect the Company's financial condition.

7.0% Senior Notes Due 2022

The Company's $350.0 million aggregate principal amount 7.0% Senior Notes mature on October 15, 2022 at par, unless earlier redeemed or purchased by the Company. Interest is payable in arrears semi-annually on April 15 and October 15 of each year. The 7.0% Senior Notes are senior unsecured obligations and rank equal in right of payment with all of the Company's other existing and future senior unsecured indebtedness, including the 8.75% Senior Notes.

The 7.0% Senior Notes are redeemable at the Company's option at redemption prices of 102.333%, 101.167% and 100.000% of the principal amount on or after October 15, 2018, 2019 and 2020, respectively.

8.75% Senior Notes due 2025

The Company's $275.0 million in aggregate principal amount 8.75% Senior Notes mature on June 15, 2025 at par, unless earlier redeemed or purchased by the Company. Interest is payable in arrears semi-annually on June 15 and December 15 of each year. The 8.75% Senior Notes are senior unsecured obligations and rank equal in right of payment with all of the Company's other existing and future senior unsecured indebtedness, including the 7.0% Senior Notes.

The 8.75% Senior Notes will become redeemable at the Company's option on or after June 15, 2020, 2021, 2022 and 2023 at redemption prices of 106.563%, 104.375%, 102.188% and 100.000% of the principal amount, respectively. Prior to June 15, 2020, the Company may use proceeds of an equity offering to redeem up to 35% of the principal amount at a redemption price of 108.750% of the principal amount. In addition, prior to June 15, 2020, the Company may redeem the notes at a redemption price equal to 100.000% of the principal amount plus a specified "make-whole" premium.

The issuer of the 7.0% Senior Notes and the 8.75% Senior Notes is HighPoint Operating Corporation (f/k/a Bill Barrett). Pursuant to supplemental indentures entered into in connection with the Merger, HighPoint Resources Corporation became a guarantor of the 7.0% Senior Notes and the 8.75% Senior Notes in March 2018. All covenants in the indentures governing the notes limit certain activities of HighPoint Operating Corporation, including limitations on the ability to pay dividends, incur additional indebtedness, make restricted payments, credit liens, sell assets or make loans to HighPoint Resources Corporation, but in most cases the covenants in the indentures are not applicable to HighPoint Resources Corporation. HighPoint Operating Corporation is currently in compliance with all covenants since issuance.

Nothing in the indentures governing the 7.0% Senior Notes or the 8.75% Senior Notes prohibits the Company from repurchasing any of the notes from time to time at any price in open market purchases, negotiated transactions or by tender offer or otherwise without any notice to or consent of the holders.

Lease Financing Obligation Due 2020

The Company has a lease financing obligation with a balance of $1.9 million as of December 31, 2018 resulting from the Company's sale and subsequent lease back of certain compressors and related facilities owned by the Company (the "Lease Financing Obligation"). On February 10, 2019, the Company elected to purchase the equipment under the early buyout option for $1.8 million. The lease payments related to the equipment were recognized as principal and interest expense based on a weighted average implicit interest rate of 3.3%.

2017 Debt Transactions

Due to the redemption of the Company's 5.0% Convertible Notes and 7.625% Senior Notes on May 30, 2017 with the proceeds from its 8.75% Senior Notes issued on April 28, 2017, the Company recognized a $7.9 million loss on extinguishment of debt on the Consolidated Statement of Operations for the year ended December 31, 2017.

2016 Debt Transactions

On June 3, 2016, the Company completed a debt exchange with a holder of the 7.625% Senior Notes (the "2016 Debt Exchange"). The holder exchanged $84.7 million principal amount of the 7.625% Senior Notes for 10,000,000 newly issued shares of the Company's common stock. Based on the fair value of the shares issued, the Company recognized an $8.7 million gain on extinguishment of debt on the Consolidated Statement of Operations for the year ended December 31, 2016. Following the 2016 Debt Exchange, the remaining aggregate principal amount was $315.3 million, which, as indicated above, was then redeemed on May 30, 2017.