(5)	INDEBTEDNESS

Senior Notes, Revolving Credit and Term Loan Agreement

In May 2015, the company amended and extended its existing credit facility. The amended credit agreement matures in June 2019 and provides for a $900 million, five-year credit facility consisting of (i) a $600 million revolving credit facility and (ii) a $300 million term loan facility.

At December 31, 2015 the company was in compliance with all covenants set forth in its debt facilities and note indentures, however, given the current trajectory of offshore energy market conditions, which has had a corresponding negative effect on our vessel revenue and other financial metrics, it is possible that in future quarters (and possibly as early as fiscal 2017) that the company may cease being in compliance with interest coverage ratios contained in certain of its debt facilities and senior note indentures. Failure to meet the required interest coverage ratios would be an event of default under certain of our debt facilities. The company is in dialogue with the principal lenders and noteholders to obtain amendments and/or waivers of these covenants in advance of any such default occurring, with the goal of finalizing any amendments and/or waivers prior to any possible covenant breach. Any such amendments and/or waivers would require successful negotiations with our bank group and certain noteholders, and would likely require the company to make certain concessions, such as potentially providing collateral or accepting a reduction in total borrowing capacity under the revolving credit facility. Obtaining the covenant relief that we are seeking will require the company to successfully harmonize the interests of the noteholders and the banks.

U.S. Dollar Denominated Debt

The following is a summary of debt outstanding at December 31, 2015 and March 31, 2015:

	December 31,			March 31,
(In thousands, except weighted average data)	2015			2015
Credit facility:
Term loan agreement (A)	$	300,000			300,000
Revolving line of credit (A) (B)		—			20,000
September 2013 senior unsecured notes:
Aggregate debt outstanding	$	500,000			500,000
Weighted average remaining life in years		7.6			8.4
Weighted average coupon rate on notes outstanding		4.86	%		4.86	%
Fair value of debt outstanding (Level 2)	$	425,950			516,879
August 2011 senior unsecured notes:
Aggregate debt outstanding	$	165,000			165,000
Weighted average remaining life in years		4.8			5.6
Weighted average coupon rate on notes outstanding		4.42	%		4.42	%
Fair value of debt outstanding (Level 2)	$	147,081			167,910
September 2010 senior unsecured notes (C):
Aggregate debt outstanding	$	382,500			425,000
Weighted average remaining life in years		4.3			4.6
Weighted average coupon rate on notes outstanding		4.35	%		4.25	%
Fair value of debt outstanding (Level 2)	$	344,634			431,296
July 2003 senior unsecured notes (D):
Aggregate debt outstanding	$	—			35,000
Weighted average remaining life in years		—			0.3
Weighted average coupon rate on notes outstanding		—			4.61	%
Fair value of debt outstanding (Level 2)	$	—			35,197
May 2015 notes (E) (F):
Amount outstanding	$	30,033			—
Fair value of debt outstanding (Level 2)		30,047			—
March 2015 notes (F):
Amount outstanding	$	28,259			29,488
Fair value of debt outstanding (Level 2)		28,265			29,501

(A)	Fair values approximate carrying values because the borrowings bear interest at variable rates.

(B)	$600 million and $580 million was available under the revolver at December 31, 2015 and March 31, 2015, respectively.

(C)	Principal repayments of $42.5 million were paid during the quarter ended December 31, 2015.

(D)	Remaining $35 million of borrowings fully paid in July 2015.

(E)

In May 2015, a wholly owned subsidiary of the company entered into a $31.3 million, U.S. dollar denominated, 12 year borrowing agreement which matures in April 2027 and is secured by a guarantee by Tidewater Inc. The loan requires semi-annual principal payments of $1.3 million (plus accrued interest) and bears interest at a fixed rate of 2.92% plus a spread based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.30% for a total rate of 4.22%).

(F)	Notes require semi-annual principal payments.

Norwegian Kroner Denominated Debt

The following is a summary of the Norwegian Kroner (NOK) denominated borrowings outstanding at December 31, 2015 and March 31, 2015, and their U.S. dollar equivalents:

	December 31,		March 31,
(In thousands)	2015		2015
3.81% January 2014 notes (A):
NOK denominated		262,500		275,000
U.S. dollar equivalent	$	29,606		34,234
Fair value in U.S. dollar equivalent (Level 2)		29,612		34,226
5.38% May 2012 notes (A):
NOK denominated		144,840		161,880
U.S. dollar equivalent	$	16,336		20,152
Fair value in U.S. dollar equivalent (Level 2)		16,329		19,924
Variable rate borrowings:
June 2013 borrowing agreement (B) (C)
NOK denominated		—		25,000
U.S. dollar equivalent	$	—		3,112
May 2012 borrowing agreement (B) (D)
NOK denominated		—		20,000
U.S. dollar equivalent	$	—		2,490

(A)	Notes require semi-annual principal payments.

(B)	Fair values approximate carrying values because the borrowings bear interest at variable rates.

(C)	Remaining note balance was repaid in September 2015. The company recognized a $0.1 million gain on early extinguishment.

(D)	Note was repaid in May 2015 upon maturity.

Debt Costs

The company capitalizes a portion of its interest costs incurred on borrowed funds used to construct vessels. The following is a summary of interest and debt costs incurred, net of interest capitalized, for the quarters and nine-month periods ended December 31:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
(In thousands)	2015		2014		2015		2014
Interest and debt costs incurred, net of interest capitalized	$	13,312		12,239		39,741		37,927
Interest costs capitalized		2,513		3,638		8,280		9,920
Total interest and debt costs	$	15,825		15,877		48,021		47,847