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Debt

6 Months Ended

Jun. 30, 2012

Note 8 — Debt

Total debt consisted of the following at June 30, 2012 and December 31, 2011:


	June 30,		December 31,
	2012		2011
Wholly-owned debt instruments:
5.875% Senior Notes due 2013	$	299,966	$	299,949
7.375% Senior Notes due 2014		249,722		249,647
3.45% Senior Notes due 2015		350,000		350,000
3.05% Senior Notes due 2016		299,945		299,938
2.50% Senior Notes due 2017		299,836		—
7.50% Senior Notes due 2019		201,695		201,695
4.90% Senior Notes due 2020		498,840		498,783
4.625% Senior Notes due 2021		399,503		399,480
3.95% Senior Notes due 2022		399,054		—
6.20% Senior Notes due 2040		399,891		399,890
6.05% Senior Notes due 2041		397,598		397,582
5.25% Senior Notes due 2042		498,244		—
Credit facilities		150,000		975,000

Total long-term debt	$	4,444,294	$	4,071,964

During June 2012, we replaced our $575 million credit facility, which was scheduled to mature in 2013, with a new $1.2 billion credit facility which matures in 2017. We continue to maintain our $600 million credit facility, which matures in 2015, which combined with our new facility, gives us a total borrowing capacity under the two facilities (together referred to as the “Credit Facilities”) of $1.8 billion. The covenants and events of default under the Credit Facilities are substantially similar, and each facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the Credit Facilities, to 0.60. At June 30, 2012, our ratio of debt to total tangible capitalization was 0.35. We were in compliance with all covenants under the Credit Facilities as of June 30, 2012.

The Credit Facilities provide us with the ability to issue up to $375 million in letters of credit in the aggregate. While the issuance of letters of credit does not increase our borrowings outstanding under the Credit Facilities, it does reduce the amount available. At June 30, 2012, we had no letters of credit outstanding under the Credit Facilities.

In February 2012, we issued, through our indirect wholly-owned subsidiary, Noble Holding International Limited (“NHIL”), $1.2 billion aggregate principal amount of senior notes in three separate tranches, with $300 million of 2.50% Senior Notes due 2017, $400 million of 3.95% Senior Notes due 2022, and $500 million of 5.25% Senior Notes due 2042. The weighted average coupon of all three tranches is 4.13%. The net proceeds of approximately $1.19 billion, after expenses, were primarily used to repay the then outstanding balance on our Credit Facilities.

Our 5.875% Senior Notes mature during the second quarter of 2013. We anticipate using availability under our Credit Facilities to repay the outstanding balance; therefore, we have continued to report the balance as long-term on our June 30, 2012 Consolidated Balance Sheet.

The indentures governing our outstanding senior unsecured notes contain covenants that place restrictions on certain merger and consolidation transactions, unless we are the surviving entity or the other party assumes the obligations under the indenture, and on the ability to sell or transfer all or substantially all of our assets. In addition, there are restrictions on incurring or assuming certain liens and sale and lease-back transactions. At June 30, 2012, we were in compliance with all our debt covenants. We continually monitor compliance with the covenants under our Credit Facilities and senior notes and, based on our expectations for 2012, expect to remain in compliance during the year.

Fair Value of Debt

Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair value of our senior notes was based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). The following table presents the estimated fair value of our long-term debt as of June 30, 2012 and December 31, 2011.


	June 30, 2012				December 31, 2011
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Wholly-owned debt instruments
5.875% Senior Notes due 2013	$	299,966	$	312,362	$	299,949	$	317,586
7.375% Senior Notes due 2014		249,722		274,275		249,647		278,966
3.45% Senior Notes due 2015		350,000		367,465		350,000		363,571
3.05% Senior Notes due 2016		299,945		309,804		299,938		306,057
2.50% Senior Notes due 2017		299,836		303,649		—		—
7.50% Senior Notes due 2019		201,695		248,719		201,695		248,623
4.90% Senior Notes due 2020		498,840		538,532		498,783		531,437
4.625% Senior Notes due 2021		399,503		424,232		399,480		416,847
3.95% Senior Notes due 2022		399,054		404,017		—		—
6.20% Senior Notes due 2040		399,891		444,713		399,890		450,017
6.05% Senior Notes due 2041		397,598		436,205		397,582		443,308
5.25% Senior Notes due 2042		498,244		496,435		—		—
Credit Facilities		150,000		150,000		975,000		975,000

Total long-term debt	$	4,444,294	$	4,710,408	$	4,071,964	$	4,331,412

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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