Debt

A summary of debt follows (in thousands):



	September 30, 2012			December 31, 2011
Revolving credit facility	$	—		$	—
Senior term loan, due 2017	425,000			444,375
7.75% senior subordinated notes, due 2020	550,000			550,000
3.75% convertible senior subordinated notes, due 2025	318,054			575,000
4.00% junior subordinated convertible debentures, due 2033	345,000			345,000
3.25% convertible senior debentures, due 2035	427,500			452,500
3.75% convertible senior subordinated notes, due 2042	390,000			—
Capitalized lease and other debt obligations	19,674			15,054
Subtotal	2,475,228			2,381,929
Add interest rate swap agreements	49,428			35,473
(Subtract) unamortized debt discount	(468,229		)	(422,681		)
(Subtract) current portion of debt	(26,685		)	(26,447		)
Total long-term debt, net	$	2,029,742		$	1,968,274

Amended and Restated Credit Agreement

In the third quarter of 2012, the Company amended and extended its existing senior unsecured credit agreement (as amended and restated, the "Credit Facility"). The Credit Facility consists of a $300 million five-year senior unsecured revolving credit facility (the "Revolving Credit Facility") and a $425 million, five-year senior unsecured term loan facility (the "Term Loan"). The amendment and restatement, among other things, provided for (i) an extension of the maturity date of the credit facilities to September 28, 2017 and (ii) a reduction in pricing. The Credit Facility is guaranteed by the subsidiaries of the Company, subject to certain exceptions. The interest rate applicable to the Credit Facility is, at the Company's option, a floating base rate plus an applicable margin or the London interbank offered rate ("LIBOR") plus an applicable margin. Initially, the applicable margins were set to 0.75% with respect to the floating base rate loans and 1.75% with respect to the LIBOR loans. The applicable margins for the Credit Facility may increase or decrease based on the Company's consolidated total leverage ratio as specified in the Credit Facility. In connection with the amendment and restatement, the Company recorded $2.0 million in new deferred debt issuance costs. The Company also wrote-off approximately $8.3 million in deferred debt issuance costs, which were recorded in interest expense in the three and nine months ended September 30, 2012.

At September 30, 2012, there was no outstanding balance under the Company’s Revolving Credit Facility and $425 million in loans outstanding under the Term Loan. The interest rate on the Term Loan was 4.00% at September 30, 2012, due to a 5 day short term financing related to the timing of the close. The interest rate on the term loan on October 2, 2012 was 1.97%. As of September 30, 2012, the Company had approximately $11 million outstanding relating to standby letters of credit, substantially all of which were subject to automatic annual renewals.

The weighted average floating interest rate on the swaps was 4.90% versus the 7.75% stated rate on the corresponding senior subordinated notes due 2020 with remaining principal balance of $550 million at September 30, 2012 .

The Company amortized to expense approximately $1.3 million and $1.5 million of deferred debt issuance costs during the three months ended September 30, 2012 and 2011, respectively, and $4.3 million during the nine months ended September 30, 2012 and 2011. Interest expense for the nine month 2012 period includes approximately $4 million in debt redemption costs associated with the April 3, 2012 debt exchange described below and the second quarter of 2012 redemption of $25 million of its 3.25% convertible senior debentures, due 2035. Interest expense for the three and nine month 2011 periods included approximately $20.2 million and $21.2 million, respectively, in debt redemption costs associated with the Company's 2011 refinancing activities.

Debt exchange

Omnicare entered into separate, privately negotiated exchange agreements under which, effective April 3, 2012, the Company retired $256.9 million in aggregate principal amount of outstanding 3.75% Convertible Senior Subordinated Notes due 2025 (the "2025 Notes") in exchange for its issuance of $390 million in aggregate principal amount of new 3.75% Convertible Senior Subordinated Notes due 2042 (the "2042 Notes"). The 2042 Notes are guaranteed by substantially all of the Company's subsidiaries, subject to certain exceptions.

The 2042 Notes mature in April 2042 and will pay interest semiannually at a rate of 3.75% per year. Commencing with the interest period beginning April 1, 2019, the 2042 Notes will also pay contingent interest under certain circumstances based on their then current trading price. The 2042 Notes are convertible, upon certain circumstances, into cash and, if applicable, shares of Omnicare common stock. The 2042 Notes have an initial conversion rate of 24.09639 shares of common stock per $1,000 original principal amount of notes (subject to adjustment in certain events). This is equivalent to an initial conversion price of approximately $41.50 per share.

Under certain circumstances, the Company has the right to redeem the 2042 Notes on or before April 1, 2016 by paying a coupon make-whole amount plus accrued but unpaid interest. After April 1, 2016 the Company may, as its option, redeem the 2042 Notes by paying par plus accrued but unpaid interest. In addition, holders may require the Company to repurchase all or part of their 2042 Notes upon a fundamental change (as defined in the indenture governing the 2042 Notes) at a cash repurchase price equal to par plus accrued but unpaid interest.

In connection with the issuance of the 2042 Notes, the Company also entered into capped call transactions with a counterparty. The capped calls are subject to adjustment or termination upon the occurrence of specified events affecting the Company and are subject to additional disruption events that may give rise to termination. The capped call transactions are intended to reduce potential economic dilution upon conversion of the 2042 Notes.

The Company recognized a non-cash loss on the debt exchange of approximately $35.1 million in the nine months ended September 30, 2012 which was reflected in "Other charges" on the Consolidated Statements of Comprehensive Income.

Information relating to the Company's convertible securities at September 30, 2012 can be found in the following table:



Convertible Debt	Carrying Value of Equity Component (in thousands)		Remaining Amortization Period	Effective Interest Rate
3.75% convertible senior subordinated notes, due 2025	$	27,230	13.25	8.250	%
4.00% junior subordinated convertible debentures, due 2033	$	151,665	20.75	8.010	%
3.25% convertible senior debentures, due 2035	$	245,433	3.25	7.625	%
3.75% convertible senior subordinated notes, due 2042	$	161,600	29.50	7.110	%

The fair value of the Company’s fixed-rate debt facilities, excluding the previously disclosed swap values, is based on quoted market prices (Level II) and is summarized as follows (in thousands):



Fair Value of Financial Instruments
	September 30, 2012				December 31, 2011
Financial Instrument	Book Value		Market Value		Book Value		Market Value
7.75% senior subordinated notes, due 2020	$	550,000	$	599,500	$	550,000	$	591,300
3.75% convertible senior subordinated notes, due 2025
Carrying value	203,394		—		361,345		—
Unamortized debt discount	114,660		—		213,655		—
Principal amount	318,054		438,900		575,000		816,500
4.00% junior subordinated convertible debentures, due 2033
Carrying value	205,599		—		203,675		—
Unamortized debt discount	139,401		—		141,325		—
Principal amount	345,000		322,600		345,000		318,800
3.25% convertible senior debentures, due 2035
Carrying value	374,123		—		384,799		—
Unamortized debt discount	53,377		—		67,701		—
Principal amount	427,500		426,400		452,500		404,600
3.75% convertible senior subordinated notes, due 2042
Carrying value	229,209		—		—		—
Unamortized debt discount	160,791		—		—		—
Principal amount	390,000		377,300		—		—