5. LONG-TERM DEBT

Our long-term debt consisted of the following:


	Face Value at		Carrying Value
	July 1,		July 1,		December 31,
(in thousands)	2018		2018		2017
Notes:
9.00% senior secured notes due in 2022	$	344,101	$	339,976	$	433,819
7.150% debentures due in 2027		89,188		85,458		85,262
6.875% debentures due in 2029		276,230		262,925		262,311
Long-term debt	$	709,519	$	688,359	$	781,392
Less current portion		—		—		74,140
Total long-term debt, net of current	$	709,519	$	688,359	$	707,252

Our outstanding notes are stated net of unamortized debt issuance costs, and unamortized discounts, if applicable, totaling $21.2 million and $23.7 million as of July 1, 2018, and December 31, 2017, respectively.

Debt Redemptions, Repurchases and Loss on Extinguishment of Debt

During the first six months of 2018 and 2017, we reduced our outstanding debt as follows:


	Six Months Ended
	July 1,		June 25,
	2018		2017
(in thousands)	Face Value		Face Value
9.00% senior secured notes due in 2022	$	95,529	$	15,000

During the quarter and six months ended July 1, 2018, we redeemed $0.5 million of our 9.00% senior secured notes due in 2022 (“2022 Notes”) at par through a tender offer that expired on May 22, 2018, and we wrote off the associated debt issuance costs. Also during in the six months ended July 1, 2018, we redeemed $75.0 million of our 2022 Notes, which we had previously announced in December 2017, and we repurchased $20.0 million of the 2022 Notes through a privately negotiated transaction. We redeemed and repurchased the $95.0 million in 2022 Notes at a premium and wrote off the associated debt issuance costs. As a result of all of these transactions, we recorded a loss on the extinguishment of debt of $19.0 thousand and $5.4 million during the quarter and six months ended July 1, 2018, respectively.

During the quarter and six months ended June 25, 2017, we repurchased a total $15.0 million of our 2022 Notes through a privately negotiated transaction. We repurchased these notes at a premium and wrote off debt issuance costs resulting in a loss on the extinguishment of debt of $0.9 million being recorded during the quarter and six months ended June 25, 2017.

As discussed below, subsequent to July 1, 2018, we refinanced and replaced a significant portion of our debt outstanding at such time, with other long-term debt, therefore, we have continued to classify it as long-term in nature.

Debt Refinancing in July 2018

On July 16, 2018, we entered into an Indenture (“2026 Notes Indenture”), among the Company, subsidiaries of the Company party thereto as guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (“2026 Notes Trustee”), pursuant to which we issued $310.0 million aggregate principal amount of 9.00% Senior Secured Notes due 2026 (“2026 Notes”) as described more fully under the section “2026 Senior Secured Notes and Indenture” below.

In connection with the issuance of the 2026 Notes and other junior debt instruments described below and as discussed more fully in Note 9, “Subsequent Events,” we completed a refinancing of all of our 2022 Notes and substantially all of our debentures, and our revolving credit facilities. On July 16, 2018, we deposited sufficient funds with The Bank of New York Mellon Trust Company, N.A., as trustee (“2022 Notes Trustee”) for the our 2022 Notes, to pay the redemption price payable in respect of all outstanding 2022 Notes, plus accrued and unpaid interest on the 2022 Notes to, but excluding, the redemption date. The 2022 Notes were issued under an Indenture, dated as of December 18, 2012, among the Company, subsidiaries of the Company party thereto as guarantors and the 2022 Notes Trustee (“2022 Notes Indenture”).

As a consequence of the foregoing, we satisfied and discharged our obligations (subject to certain exceptions) under the 2022 Notes Indenture and the related security documents in accordance with the satisfaction and discharge provisions of the 2022 Notes Indenture. Upon the satisfaction and discharge of the 2022 Notes Indenture on July 16, 2018, all of the liens on the collateral securing the 2022 Notes were released and we and the guarantors were discharged from our respective obligations under the 2022 Notes and the guarantees thereof.

On July 16, 2018, the 2022 Notes Trustee, at our direction, delivered a notice of redemption to holders of all $344.1 million in aggregate principal amount of outstanding 2022 Notes.

ABL Credit Agreement

Also on July 16, 2018, we entered into a Credit Agreement, among the Company, the subsidiaries of the Company party thereto as borrowers and Wells Fargo Bank, N.A. (“Wells Fargo”), as administrative agent (“ABL Credit Agreement”). The ABL Credit Agreement provides for up to $65.0 million secured asset-backed revolving credit facility with a letter of credit subfacility and a swing line subfacility. In addition, the ABL Credit Agreement provides for a $35.0 million cash secured letter of credit facility. The commitments under the ABL Credit Agreement expire July 16, 2023. Our obligations under the ABL Credit Agreement are guaranteed by us and certain of our subsidiaries meeting materiality thresholds set forth in the ABL Credit Agreement as described more fully in Note 9.

Loans under the ABL Credit Agreement bear interest, at our option, at either a rate based on the London Interbank Offered Rate (“LIBOR”) for the applicable interest period or a base rate, in each case plus a margin. The base rate is the highest of Wells Fargo’s publicly announced prime rate, the federal funds rate plus 0.50% and one-month LIBOR plus 1.0%. The margin ranges from 1.75% to 2.25% for LIBOR loans and 0.75% to 1.25% for base rate loans and is determined based on average excess availability. Interest on the loans is payable quarterly in arrears with respect to base rate loans and at the end of an interest period (and at three month intervals if the interest period exceeds three months) in the case of LIBOR loans.

The ABL Credit Agreement requires, at any time the availability under our revolving credit facility falls below the greater of 12.5% of the total facility size or approximately $8.1 million, to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 until such time as the availability under our revolving credit facility exceeds such threshold for 30 consecutive days.

In connection with entering into the ABL Credit Agreement and the refinancing of our 2022 Notes as described above, we terminated our Third Amended and Restated Credit Agreement, which had a maturity date of December 18, 2019 and had no borrowings outstanding as of the end of our second quarter of 2018 or as of July 16, 2018, the date of termination.

Separately we are party to an Issuance and Reimbursement Agreement (“LC Agreement”) with Bank of America, N.A., under which we may request letters of credit be issued on our behalf in an aggregate face amount not to exceed $35.0 million. We had standby letters of credit totaling $29.7 million outstanding under the LC Agreement as of July 1, 2018. We are required to provide cash collateral equal to 101% of the aggregate undrawn stated amount of each outstanding letter of credit. We expect this LC Agreement will remain in place for up to 90 days from July 16, 2018, as we transition our letters of credit to the ABL Credit Agreement. Cash collateral associated with this LC Agreement is classified in our condensed consolidated balance sheets in other assets.

2026 Senior Secured Notes and Indenture

As discussed above, on July 16, 2018, we entered into the 2026 Notes Indenture, pursuant to which we issued $310.0 million aggregate principal amount of the 2026 Notes in a private placement to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act of 1933, as amended (“Securities Act”), and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act.

The 2026 Notes mature on July 15, 2026, and bear interest at a rate of 9.00% per annum. Interest on the 2026 Notes is payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2019.

We will be required to redeem the 2026 Notes from the net cash proceeds of certain asset dispositions and from a portion of our excess cash flow (as defined in the 2026 Notes Indenture).

The 2026 Notes Indenture contains covenants that, among other things, restrict our ability and our restricted subsidiaries to:

incur certain additional indebtedness and issue preferred stock;

make certain distributions, investments and other restricted payments;

sell assets;

agree to any restrictions on the ability of restricted subsidiaries to make payments to us;

create liens;

merge, consolidate or sell substantially all of our assets, taken as a whole; and

enter into certain transactions with affiliates.

These covenants are subject to a number of other limitations and exceptions set forth in the 2026 Notes Indenture.

Junior Lien Term Loan Agreement

On July 16, 2018, we entered into a Junior Lien Term Loan Credit Agreement, among the Company, the guarantors party thereto, the lenders party thereto and The Bank of New York Mellon, as administrative agent and collateral agent (“Junior Term Loan Agreement”). The Junior Term Loan Agreement provides for a $157.1 million secured term loan (“Tranche A Junior Term Loans”) and a $193.5 million term loan (“Tranche B Junior Term Loans”). The Tranche A Junior Term Loans mature on July 15, 2030 and the Tranche B Junior Term Loans mature on July 15, 2031. Our obligations under the Junior Term Loan Agreement are guaranteed by our subsidiaries that guarantee the 2026 Notes as set forth in the Junior Term Loan Agreement.

The proceeds of the loans under the Junior Term Loan Agreement were used to effect the exchange with the holder of approximately $82.1 million in aggregate principal amount of 2027 Debentures (as defined in Note 9) and approximately $193.5 million in aggregate principal amount of 2029 Debentures (as defined in Note 9) and to pay fees, costs, and expenses in connection with our debt refinancing.

Tranche A Junior Term Loans bear interest at a rate per annum equal to 7.795% and Tranche B Junior Term Loans bear interest at a rate per annum equal to 6.875%. Interest on the loans is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2019.

In general, the affirmative and negative covenants of the Junior Term Loan Agreement are substantially the same as the covenants in the 2026 Notes Indenture.

Other Debt

After giving effect to the Junior Term Loan Agreements, we have $7.1 million aggregate principal amount of 2027 Debentures and $82.8 million aggregate principal amount of 2029 Debentures outstanding as discussed more fully in Note 9.