(5)	INDEBTEDNESS

Please refer to Note (2) of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form
10-K for additional information regarding the company’s compliance with debt covenants and classification of all outstanding debt as a current liability.

Bank Loan Agreement

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

Borrowings under the credit facility are unsecured and bear interest at the company’s option at (i) the greater of prime or the federal funds rate plus 0.25 to 1.00%, or (ii) Eurodollar rates, plus margins ranging from 1.25 to 2.00% based on the company’s consolidated funded debt to capitalization ratio. Commitment fees on the unused portion of the facilities range from 0.15 to 0.30% based on the company’s funded debt to total capitalization ratio. The credit facility requires that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%, and maintain a consolidated interest coverage ratio (essentially consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the four prior fiscal quarters to consolidated interest charges, including capitalized interest, for such period) of not less than 3.0 to 1.0. All other terms, including the financial and negative covenants, are customary for facilities of its type and consistent with the prior agreement in all material respects.

The company had $300 million in term loan borrowings and $600 million of revolver borrowings outstanding at March 31, 2016 (whose fair value approximates the carrying value because the borrowings bear interest at variable rates). The company had no available capacity under the revolver at March 31, 2016 and $580 million available under the revolver at March 31, 2015.

Senior Debt Notes

The determination of fair value includes an estimated credit spread between our long term debt and treasuries with similar matching expirations. The credit spread is determined based on comparable publicly traded companies in the oilfield service segment with similar credit ratings. These estimated fair values are based on Level 2 inputs.

September 2013 Senior Notes

On September 30, 2013, the company executed a note purchase agreement for $500 million and issued $300 million of senior unsecured notes to a group of institutional investors. The company issued the remaining $200 million of senior unsecured notes on November 15, 2013. A summary of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2016			2015
Aggregate debt outstanding	$	500,000			500,000
Weighted average remaining life in years		7.4			8.4
Weighted average coupon rate on notes outstanding		4.86	%		4.86	%
Fair value of debt outstanding		342,746			516,879

The multiple series of notes totaling $500 million were issued with maturities ranging from approximately seven to 12 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55% and maintain a ratio of consolidated EBITDA to consolidated interest charges, including capitalized interest, of not less than 3.0 to 1.0.

August 2011 Senior Notes

On August 15, 2011, the company issued $165 million of senior unsecured notes to a group of institutional investors. A summary of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2016			2015
Aggregate debt outstanding	$	165,000			165,000
Weighted average remaining life in years		4.6			5.6
Weighted average coupon rate on notes outstanding		4.42	%		4.42	%
Fair value of debt outstanding		127,148			167,910

The multiple series of notes were originally issued with maturities ranging from approximately eight to 10 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%.

September 2010 Senior Notes

In fiscal 2011, the company completed the sale of $425 million of senior unsecured notes. A summary of the aggregate amount of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2016			2015
Aggregate debt outstanding	$	382,500			425,000
Weighted average remaining life in years		4.1			4.6
Weighted average coupon rate on notes outstanding		4.35	%		4.25	%
Fair value of debt outstanding		302,832			431,296

The multiple series of these notes were originally issued with maturities ranging from five to 12 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%.

Included in accumulated other comprehensive income at March 31, 2016 and 2015, is an after-tax loss of $1.5 million ($2.4 million pre-tax), and $1.8 million ($2.6 million pre-tax), respectively, relating to the purchase of interest rate hedges, which are cash flow hedges, in July 2010 in connection with the September 2010 senior notes offering. The interest rate hedges settled in August 2010 concurrent with the pricing of the senior unsecured notes. The hedges met the effectiveness criteria and their acquisition costs are being amortized to interest expense over the term of the individual notes matching the term of the hedges to interest expense.

July 2003 Senior Notes

In July 2003, the company completed the sale of $300 million of senior unsecured notes. A summary of the aggregate amount of these outstanding notes at March 31, is as follows:

(In thousands, except weighted average data)	2016		2015
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		—		35,197

The multiple series of notes were originally issued with maturities ranging from seven to 12 years. These notes can be retired in whole or in part prior to maturity for a redemption price equal to the principal amount of the notes redeemed plus a customary make-whole premium. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%.

Troms Offshore Debt

In May 2015, Troms Offshore entered into a $31.3 million, U.S. dollar denominated, 12 year unsecured borrowing agreement which matures in April 2027 and is secured by a company guarantee. 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 premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.30% for a total all-in rate of 4.22%). As of March 31, 2016, $30 million is outstanding under this agreement.

In March 2015, Troms Offshore entered into a $29.5 million, U.S. dollar denominated, 12 year unsecured borrowing agreement which matures in January 2027 and is secured by a company guarantee. The loan requires semi-annual principal payments of $1.2 million (plus accrued interest) and bears interest at a fixed rate of 2.91% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.30% for a total all-in rate of 4.21%). As of March 31, 2016, $27 million is outstanding under this agreement.

A summary of U.S. dollar denominated Troms Offshore borrowings outstanding at March 31, is as follows:

(In thousands)	March 31, 2016		March 31, 2015
May 2015 notes (A)
Amount outstanding	$	30,033		—
Fair value of debt outstanding (Level 2)		30,062		—
March 2015 notes (A)
Amount outstanding	$	27,030		29,488
Fair value of debt outstanding (Level 2)		27,027		29,501

(A)

Note requires semi-annual principal payments.

In January 2014, Troms Offshore entered into a 300 million NOK, 12 year unsecured borrowing agreement which matures in January 2026 and is secured by a company guarantee. The loan requires semi-annual principal payments of 12.5 million NOK (plus accrued interest) and bears interest at a fixed rate of 2.31% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.50% for a total all-in rate of 3.81%). As of March 31, 2016, 250 million NOK (approximately $30.2 million) is outstanding under this agreement.

In May 2012, Troms Offshore entered into a 204.4 million NOK denominated borrowing agreement which matures in May 2024. The loan requires semi-annual principal payments of 8.5 million NOK (plus accrued interest), bears interest at a fixed rate of 6.38% and is secured by certain guarantees and various types of collateral, including a vessel. In January 2014, the loan was amended to, among other things, change the interest rate to a fixed rate equal to 3.88% plus a premium based on Tidewater’s funded indebtedness to capitalization ratio (currently equal to 1.50% for a total all-in rate of 5.38%), change the borrower, change the export creditor guarantor, and to replace the vessel security with a company guarantee. As of March 31, 2016, 144.8 million NOK (approximately $17.5 million) is outstanding under this agreement.

A summary of Norwegian Kroner (NOK) denominated Troms Offshore borrowings outstanding at March 31, and their U.S. dollar equivalents is as follows:

(In thousands)	March 31, 2016		March 31, 2015
3.81% January 2014 notes (A):
NOK denominated		250,000		275,000
U.S. dollar equivalent	$	30,207		34,234
Fair value in U.S. dollar equivalent (Level 2)		30,199		34,226
5.38% May 2012 notes (A):
NOK denominated		144,840		161,880
U.S. dollar equivalent	$	17,500		20,152
Fair value in U.S. dollar equivalent (Level 2)		17,479		19,924
Variable rate borrowings:
June 2013 borrowing agreement (B)
NOK denominated		—		25,000
U.S. dollar equivalent	$	—		3,112
May 2012 borrowing agreement (B)
NOK denominated		—		20,000
U.S. dollar equivalent	$	—		2,490

(A)

Note requires semi-annual principal payments.

(B)

Fair values approximate carrying values because the borrowings bear interest at variable rates. The notes were repaid in fiscal 2016.

Each of the four Troms Offshore Debt tranches (two U.S. dollar denominated and two NOK denominated) require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%, and maintain a consolidated interest coverage ratio (essentially consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the four prior fiscal quarters to consolidated interest charges, including capitalized interest, for such period) of not less than 3.0 to 1.0.

During the second quarter of fiscal 2014, the company repaid prior to maturity 500 million Norwegian Kroner (NOK) denominated (approximately $82.1 million) public bonds (plus accrued interest) that had been issued by Troms Offshore in April 2013. The repayment of these bonds, at an average price of approximately 105.0% of par value, resulted in the recognition of a loss on early extinguishment of debt of approximately 26 million NOK (approximately $4.1 million).

Summary of Long-Term Debt Outstanding

The following table summarizes debt outstanding at March 31:

(In thousands)	2016		2015
4.61% July 2003 senior notes due fiscal 2016	$	—		35,000
3.28% September 2010 senior notes due fiscal 2016		—		42,500
3.90% September 2010 senior notes due fiscal 2018		44,500		44,500
3.95% September 2010 senior notes due fiscal 2018		25,000		25,000
4.12% September 2010 senior notes due fiscal 2019		25,000		25,000
4.17% September 2010 senior notes due fiscal 2019		25,000		25,000
4.33% September 2010 senior notes due fiscal 2020		50,000		50,000
4.51% September 2010 senior notes due fiscal 2021		100,000		100,000
4.56% September 2010 senior notes due fiscal 2021		65,000		65,000
4.61% September 2010 senior notes due fiscal 2023		48,000		48,000
4.06% August 2011 senior notes due fiscal 2019		50,000		50,000
4.54% August 2011 senior notes due fiscal 2022		65,000		65,000
4.64% August 2011 senior notes due fiscal 2022		50,000		50,000
4.26% September 2013 senior notes due fiscal 2021		123,000		123,000
5.01% September 2013 senior notes due fiscal 2024		250,000		250,000
5.16% September 2013 senior notes due fiscal 2026		127,000		127,000
NOK denominated notes due fiscal 2025		17,500		20,152
NOK denominated notes due fiscal 2026		30,207		34,234
NOK denominated borrowing agreement due fiscal 2016		—		2,490
NOK denominated borrowing agreement due fiscal 2019		—		3,112
USD denominated notes due fiscal 2027		27,030		29,488
USD denominated notes due fiscal 2028		30,033		—
Bank term loan due fiscal 2020		300,000		300,000
Revolving line of credit due fiscal 2020		600,000		20,000
	$	2,052,270		1,534,476
Less: Current maturities of long-term debt		2,052,270		10,181
Total long-term debt	$	—		1,524,295

Debt Costs

The company capitalizes a portion of its interest costs incurred on borrowed funds used to construct vessels. Interest and debt costs incurred, net of interest capitalized, for the years ended March 31, are as follows:

(In thousands)	2016		2015		2014
Interest and debt costs incurred, net of interest capitalized	$	53,752		50,029		43,814
Interest costs capitalized		10,451		13,673		11,497
Total interest and debt costs	$	64,203		63,702		55,311