Debt

3 Months Ended

Dec. 31, 2012

Debt

Debt

7. Debt

At December 31, 2012 and September 30, 2012, we had the following unsecured long-term debt outstanding (in thousands):

	December 31,		September 30,
	2012		2012
Unsecured intermediate debt issued August 15, 2002:
Series D, due August 15, 2014, 6.56%	$	75,000	$	75,000
Unsecured senior notes issued July 21, 2009:
Due July 21, 2013, 6.10%	40,000		40,000
Due July 21, 2014, 6.10%	40,000		40,000
Due July 21, 2015, 6.10%	40,000		40,000
Due July 21, 2016, 6.10%	40,000		40,000
	$	235,000	$	235,000
Less long-term debt due within one year	40,000		40,000
Long-term debt	$	195,000	$	195,000

The intermediate unsecured debt outstanding at December 31, 2012 matures August 15, 2014 and carries an interest rate of 6.56 percent, which is paid semi-annually.  The terms require that we maintain a ratio of debt to total capitalization of less than 55 percent.  The debt is held by various entities.

We have $160 million in senior unsecured fixed-rate notes outstanding at December 31, 2012 that mature over a period from July 2013 to July 2016.  Interest on the notes is paid semi-annually based on an annual rate of 6.10 percent.  Annual principal repayments of $40 million are due July 2013 through July 2016.  We have complied with our financial covenants which require us to maintain a funded leverage ratio of less than 55 percent and an interest coverage ratio (as defined) of not less than 2.50 to 1.00.

We have a $300 million unsecured revolving credit facility that will mature May 25, 2017.  We anticipate that the majority of any borrowings under the facility will accrue interest at a spread over the London Interbank Offered Rate (LIBOR).  We will also pay a commitment fee based on the unused balance of the facility.  Borrowing spreads as well as commitment fees are determined according to a scale based on a ratio of our total debt to total capitalization.  The LIBOR spread ranges from 1.125 percent to 1.75 percent per annum and commitment fees range from .15 percent to .35 percent per annum.  Based on our debt to total capitalization on December 31, 2012, the LIBOR spread and commitment fees would be 1.125 percent and .15 percent, respectively.  Financial covenants in the facility require us to maintain a funded leverage ratio (as defined) of less than 50 percent and an interest coverage ratio (as defined) of not less than 3.00 to 1.00.  The credit facility contains additional terms, conditions, restrictions, and covenants that we believe are usual and customary in unsecured debt arrangements for companies of similar size and credit quality.  As of December 31, 2012, there were no borrowings, but there were three letters of credit outstanding in the amount of $30.7 million.  Two of the outstanding letters of credit replaced two collateral trusts that were terminated during the first quarter of fiscal 2012.  Upon termination, an amount totaling $26.1 million was returned to us.  At December 31, 2012, we had $269.3 million available to borrow under our $300 million unsecured credit facility.

At December 31, 2012, we had three letters of credit outstanding that were issued separately from the $300 million unsecured credit facility.  One letter of credit for $0.2 million was issued by a bank on our behalf to guarantee payment of certain expenses incurred by an international transportation vendor.  Additionally, two letters of credit, totaling $12 million, were issued to a bank to support the issuance of two performance guaranties required under an international drilling contract.  Because these letters of credit were issued separately from the $300 million credit facility, they do not reduce the available borrowing capacity discussed in the previous paragraph.