Note H – Financing Arrangements and Long-Term Debt

As of December 31, 2018, the Company has a $1.6 billion revolving credit facility (2018 facility). The 2018 facility is a senior unsecured guaranteed facility which expires in November 2023 and it replaced the $1.1 billion senior unsecured guaranteed credit facility (2016 facility). At December 31, 2018, the Company had outstanding borrowings of $325.0 million under the 2018 facility and $24.7 million of outstanding letters of credit, which reduce the borrowing capacity of the 2018 facility. Borrowings under the 2018 facility bear interest at rates, based, at the Company’s option, on the “Alternate Base Rate” of interest in effect plus the “ABR Spread” or the “Adjusted LIBOR Rate,” which is a periodic fixed rate based on LIBOR with a term equivalent to the interest period for such borrowing, plus the “Eurodollar Spread.” The “Alternate Base Rate” of interest is the highest of (i) the Wall Street Journal prime rate, (ii) the New York Federal Reserve Bank Rate plus 0.50%, and (iii) one-month LIBOR plus 1.00%. The “Eurodollar Spread” ranges from 1.075% to 2.10% per annum based upon the Corporation’s senior unsecured long-term debt securities credit ratings (the “Credit Ratings”). A facility fee accrues and is payable quarterly in arrears at a rate ranging from 0.175% to 0.40% per annum (based upon the Company’s Credit Ratings) on the aggregate commitments under the 2016 facility. At December 31, 2018, the interest rate in effect on borrowings under the facility was 3.831%. At December 31, 2018, the Company was in compliance with all covenants related to the 2018 facility.

In August 2017, the Company sold $550 million of new notes that bear interest at the rate of 5.75% and mature on August 15, 2025. The Company incurred transaction costs of $8.4 million on the issuance of these new notes. The Company pays interest semi-annually on February 15 and August 15 of each year. The initial interest payment was paid on February 15, 2018. The proceeds of the $550 million notes were used to redeem the Company’s 3.50% notes in September 2017. The 3.50% notes had an original maturity of December 2017.

The Company and its partners are parties to a 25-year lease of production equipment at the Kakap field offshore Malaysia. The lease has been accounted for as a capital lease (finance lease under ASC 842), and payments under the agreement are to be made over a 15-year period through March 2029. Current maturities of long-term debt and long-term debt on the Consolidated Balance Sheet included $10.6 million and $125.8 million, respectively, associated with this lease at December 31, 2018.



	December 31,
(Thousands of dollars)	2018		2017
Notes payable
4.00% notes, due June 2022	$	500,000	500,000
4.45% notes, due December 20221		600,000	600,000
6.875% notes, due August 2024		550,000	550,000
5.75% notes, due August 2025		550,000	550,000
7.05% notes, due May 2029		250,000	250,000
5.875% notes, due December 20421		350,000	350,000
Total notes payable		2,800,000	2,800,000
Unamortized debt issuance cost and discount on notes payable		(23,627)	(27,433)
Total notes payable, net of unamortized discount		2,776,373	2,772,567
Capitalized lease obligation, due through March 2029		136,344	143,855
Total debt including current maturities		2,912,717	2,916,422
Senior Unsecured Revolving Credit Facility		325,000	-
Current maturities		(10,583)	(9,902)
Total long-term debt	$	3,227,134	2,906,520

1 Due to a series of ratings changes by credit agencies, the paying interest rates on the notes due December 2022 and December 2042 decreased from 4.7% to 4.45% and 6.125% to 5.875%, respectively, in 2017 and remained through 2018.

The amount of debt repayable over each of the next five years and thereafter are as follows: ‘$10.6 million in 2019, $11.2 million in 2020, $11.7 million in 2021, $1.1 billion in 2022, $337.9 million in 2023 and $1.76 billion thereafter.