Debt (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Company's Consolidated Debt and Capital Lease Obligations

The Company is in compliance with all covenants under its financing arrangements as of September 30, 2017. The components of the Company’s consolidated debt and capital lease obligations were as follows (in thousands):



	September 30, 2017			December 31, 2016
Encore revolving credit facility	$	149,563		$	578,000
Encore term loan facility	188,688			164,615
Encore senior secured notes	327,058			11,320
Encore convertible notes	548,500			448,500
Less: debt discount	(35,217		)	(31,968		)
Cabot senior secured notes	1,202,803			1,280,241
Add: debt premium	—			17,686
Less: debt discount	(2,033		)	(2,200		)
Cabot senior revolving credit facility	75,693			33,218
Cabot securitisation senior facility	349,288			—
Preferred equity certificates	244,422			205,975
Other credit facilities	68,854			74,551
Other	72,622			62,608
Capital lease obligations	3,148			5,091
	3,193,389			2,847,637
Less: debt issuance costs, net of amortization	(44,892		)	(41,654		)
Total	$	3,148,497		$	2,805,983

Detail of the Hedge Program for each of the Convertible Notes

The debt and equity components, the issuance costs related to the equity component, the stated interest rate, and the effective interest rate for each of the Convertible Notes are listed below (in thousands, except percentages):



	2017 Convertible Notes ⁽¹⁾			2020 Convertible Notes			2021 Convertible Notes			2022 Convertible Notes
Debt component	$	64,646		$	140,247		$	143,645		$	137,266
Equity component	$	354		$	32,253		$	17,355		$	12,734
Equity issuance cost	$	788		$	1,106		$	581		$	398
Stated interest rate	3.000		%	3.000		%	2.875		%	3.250		%
Effective interest rate	3.750		%	6.350		%	4.700		%	5.200		%

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(1)	As discussed above, in February 2017, the Company repurchased $50.0 million aggregate principal amount of its 2017 Convertible Notes. This transaction is treated as debt extinguishment and the effective interest rate has been updated from 6.000% to 3.750%, which represents the effective interest rate for the remaining 2017 Convertible Notes at the time of repurchase.

The details of the hedge program for each of the Convertible Notes are listed below (in thousands, except conversion price):



	2017 Convertible Notes		2020 Convertible Notes		2021 Convertible Notes
Cost of the hedge transaction(s)	$	50,595	$	18,113	$	19,545
Initial conversion price	$	31.56	$	45.72	$	59.39
Effective conversion price	$	60.00	$	61.55	$	83.14

The balances of the liability and equity components of all of the Convertible Notes outstanding were as follows (in thousands):



	September 30, 2017			December 31, 2016
Liability component—principal amount	$	548,500		$	448,500
Unamortized debt discount	(35,217		)	(31,968		)
Liability component—net carrying amount	$	513,283		$	416,532
Equity component	$	62,619		$	61,314

Certain key terms related to the convertible features for each of the Convertible Notes as of September 30, 2017 are listed below.



	2017 Convertible Notes		2020 Convertible Notes		2021 Convertible Notes		2022 Convertible Notes
Initial conversion price	$	31.56	$	45.72	$	59.39	$	45.57
Closing stock price at date of issuance	$	25.66	$	33.35	$	47.51	$	35.05
Closing stock price date	November 27, 2012		June 24, 2013		March 5, 2014		February 27, 2017
Conversion rate (shares per $1,000 principal amount)	31.6832		21.8718		16.8386		21.9467
Conversion date⁽¹⁾	May 27, 2017		January 1, 2020		September 15, 2020		September 15, 2021

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(1)	The 2017 Convertible Notes became convertible on demand on January 2, 2014, as certain early conversion events were satisfied. Refer to “Conversion and Earnings Per Share Impact” section below for further details.

Interest Expense

Interest expense related to the Cabot Notes, Cabot Floating Rate Notes and Marlin Bonds was as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Interest expense—stated coupon rate	$	24,285		$	25,870		$	73,278		$	81,359
Interest income—accretion of debt premium	(758		)	(2,542		)	(2,855		)	(7,854		)
Interest expense—amortization of debt discount	119			119			345			503
Total interest expense—Cabot senior secured notes	$	23,646		$	23,447		$	70,768		$	74,008

Interest expense related to the convertible notes was as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Interest expense—stated coupon rate	$	4,117	$	3,317	$	11,705	$	9,925
Interest expense—amortization of debt discount	2,473		2,501		7,374		7,366
Total interest expense—convertible notes	$	6,590	$	5,818	$	19,079	$	17,291