DEBT AND CAPITAL LEASE OBLIGATIONS

The current and non-current portions of long-term debt and capital lease obligations as of June 30, 2013 and December 31, 2012 are as follows (in thousands):



	June 30, 2013				December 31, 2012
	Current		Non-Current		Current		Non-Current
3.25% Convertible Senior Notes due 2028	$	—	$	5,334	$	48,081	$	—
7.875% Senior Notes due 2021	—		300,000		—		—
Capital lease obligations	5,485		1,244		7,902		3,460
	$	5,485	$	306,578	$	55,983	$	3,460

3.25% Convertible Senior Notes due 2028

Per the indenture governing the 3.25% Convertible Senior Notes due 2028 (the “Convertible Notes”), the Company announced on February 13, 2013 that it was offering to repurchase all of its outstanding 3.25% Convertible Senior Notes due 2028. As of February 12, 2013, there was $48.7 million aggregate principal amount of Convertible Notes outstanding. The Company repurchased $43.3 million in aggregate principal amount, leaving a balance of $5.3 million at June 30, 2013.

7.875% Senior Notes due 2021

On January 29, 2013, the Company completed an offering of $300 million in aggregate principal amount of 7.875% Senior Notes due 2021 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). As of June 30, 2013, the outstanding balance of Notes was $300 million.

Revolving Credit Facility

On August 1, 2012, Coeur Alaska, Inc. and Coeur Rochester, Inc. (the “Borrowers”), each a wholly-owned subsidiary of the Company, entered into a new Credit Agreement (the “Credit Agreement”) by and among the Company, the Borrowers, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent. The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $100.0 million, which principal amount may be increased, subject to receiving additional commitments therefor, by up to $50.0 million. There is a commitment fee of 0.10% on the unused portion of the line. The unused line fee for the three and six months ended June 30, 2013 was $0.1 and $0.3 million, respectively and was charged to interest expense.

As of June 30, 2013, no amounts were outstanding under the Revolving Credit Facility.

Palmarejo Gold Production Royalty Obligation

The Company recognized accretion expense on the Palmarejo gold production royalty obligation for the three months ended June 30, 2013 and 2012 of $4.1 million and $5.6 million, respectively. As of June 30, 2013 and December 31, 2012, the remaining minimum obligation under the royalty agreement was $56.5 million and $61.9 million, of which $23.9 million and $24.0 million were current, respectively.

Interest Expense

The Company expenses interest incurred on its various debt instruments as a cost of operating its properties. For the three and six months ended June 30, 2013, the Company expensed interest of $10.9 million and $20.7 million, respectively. For the three and six months ended June 30, 2012, the Company expensed interest of $7.6 and $14.2 million, respectively.

Interest expense is made up of the following (in thousands):



	Three months ended June 30,					Six months ended June 30,
	2013		2012			2013			2012
3.25% Convertible Senior Notes due 2028	$	43	$	395		$	380		$	791
7.875% Senior Notes due 2021	5,906		—			10,041			—
Revolving Credit Facility	133		—			258			—
Kensington Term Facility (terminated in 2012)	—		906			—			1,880
Capital lease obligations	98		265			266			608
Other debt obligations	72		162			268			230
Accretion of Palmarejo gold production royalty obligation	4,107		5,559			8,170			10,663
Amortization of debt issuance costs	539		251			1,064			508
Accretion of debt discount	—		629			576			1,241
Capitalized interest	32		(610		)	(361		)	(1,694		)
Total interest expense, net of capitalized interest	$	10,930	$	7,557		$	20,662		$	14,227