DEBT

12 Months Ended

Dec. 31, 2019

NOTE 6: DEBT

Debt at December 31 is detailed as follows:



	Effective
in thousands	Interest Rates	2019	2018
Short-term Debt
Bank line of credit expires 2021 ¹		$ 0	$ 133,000
Total short-term debt		$ 0	$ 133,000
Long-term Debt
Bank line of credit expires 2021 ¹		$ 0	$ 0
Floating-rate notes due 2020 ²	2.89%	250,000	250,000
Floating-rate notes due 2021	2.85%	500,000	500,000
8.85% notes due 2021	8.88%	6,000	6,000
4.50% notes due 2025	4.65%	400,000	400,000
3.90% notes due 2027	4.00%	400,000	400,000
7.15% notes due 2037	8.05%	129,239	129,239
4.50% notes due 2047	4.59%	700,000	700,000
4.70% notes due 2048	5.42%	460,949	460,949
Other notes	6.46%	185	208
Total long-term debt - face value		$ 2,846,373	$ 2,846,396
Unamortized discounts and debt issuance costs		(62,033)	(67,016)
Total long-term debt - book value		$ 2,784,340	$ 2,779,380
Less current maturities		25	23
Total long-term debt - reported value		$ 2,784,315	$ 2,779,357
Estimated fair value of long-term debt		$ 3,073,693	$ 2,695,802


¹	Borrowings on the bank line of credit are classified as short-term if we intend to repay within twelve months and as long-term if we have the intent and ability to extend payment beyond twelve months.
²	This debt is classified as long-term since we intend to refinance it, and we have the ability to do so by borrowing on our line of credit.

Discounts and debt issuance costs are amortized using the effective interest method over the terms of the respective notes resulting in $4,983,000 and $5,161,000, respectively, of net interest expense for these items for 2019 and 2018.

LINE OF CREDIT

Our unsecured $750,000,000 line of credit matures December 2021 and contains affirmative, negative and financial covenants customary for an unsecured investment-grade facility. The primary negative covenant limits our ability to incur secured debt. The financial covenants are: (1) a maximum ratio of debt to EBITDA of 3.5:1 (upon certain acquisitions, the maximum ratio can be 3.75:1 for three quarters), and (2) a minimum ratio of EBITDA to net cash interest expense of 3.0:1. As of December 31, 2019, we were in compliance with the line of credit covenants.

Borrowings on our line of credit are classified as short-term if we intend to repay within twelve months and as long-term if we have the intent and ability to extend repayment beyond twelve months. Borrowings bear interest, at our option, at either LIBOR plus a credit margin ranging from 1.00% to 1.75%, or SunTrust Bank’s base rate (generally, its prime rate) plus a credit margin ranging from 0.00% to 0.75%. The credit margin for both LIBOR and base rate borrowings is determined by our credit ratings. Standby letters of credit, which are issued under the line of credit and reduce availability, are charged a fee equal to the credit margin for LIBOR borrowings plus 0.175%. We also pay a commitment fee on the daily average unused amount of the line of credit that ranges from 0.10% to 0.25% determined by our credit ratings. As of December 31, 2019, the credit margin for LIBOR borrowings was 1.25%, the credit margin for base rate borrowings was 0.25%, and the commitment fee for the unused amount was 0.15%.

As of December 31, 2019, our available borrowing capacity was $697,400,000. Utilization of the borrowing capacity was as follows:

none was borrowed

$52,600,000 was used to provide support for outstanding standby letters of credit

TERM DEBT

All of our $2,846,373,000 (face value) of term debt is unsecured. $2,846,188,000 of such debt is governed by three essentially identical indentures that contain customary investment-grade type covenants. The primary covenant in all three indentures limits the amount of secured debt we may incur without ratably securing such debt. As of December 31, 2019, we were in compliance with all term debt covenants.

In December 2018, we completed an exchange offer in which all of the $460,949,000 of 4.70% senior unregistered notes due 2048 (issued in February 2018 and March 2018 as described below) were exchanged for new registered notes of like principal amount and like denomination as the unregistered notes, with substantially identical terms. We did not receive any proceeds from the issuance of the new notes.

In March 2018, we early retired via exchange offer $110,949,000 of the $240,188,000 7.15% senior notes due 2037 for: (1) a like amount of notes due 2048 (these notes are a further issuance of, and form a single series with, the $350,000,000 of 4.70% senior notes due 2048 issued in February 2018 as described below), and (2) $38,164,000 of cash. The cash payment primarily reflects the trading price of the retired notes relative to par and will be amortized to interest expense over the term of the notes due 2048. We recognized transaction costs of $1,314,000 with this early retirement.

In February 2018, we issued $350,000,000 of 4.70% senior notes due 2048 (these notes now total $460,949,000 including the notes issued in March as described above) and $500,000,000 of floating-rate senior notes due 2021. Total proceeds of $846,029,000 (net of discounts, transaction costs and an interest rate derivative settlement gain), together with cash on hand, were used to retire/repay without penalty or premium: (1) the $350,000,000 term loan due 2018, (2) the $250,000,000 term loan due 2021, and (3) the $250,000,000 bank line of credit borrowings. We recognized noncash expense of $203,000 with the acceleration of unamortized deferred transaction costs.

In January 2018, we early retired via redemption the remaining $35,111,000 of the 7.50% senior notes due 2021 at a cost of $40,719,000 including a premium of $5,608,000. Additionally, we recognized noncash expense of $263,000 with the acceleration of unamortized deferred transaction costs.

As a result of the first quarter 2018 early debt retirements described above, we recognized premiums of $5,608,000, transaction costs of $1,314,000 and noncash expense (acceleration of unamortized deferred transaction costs) of $466,000. The combined charge of $7,388,000 was a component of interest expense for the year ended December 31, 2018.

In 2017, we completed a number of financing and refinancing activities resulting in proceeds of $2,200,000,000 and payments of $1,463,308,000. As a result of these activities, we recognized premiums of $139,187,000, transaction costs of $1,586,000 and noncash expense (acceleration of unamortized deferred transaction costs) of $7,257,000. The combined charge of $148,030,000 was a component of interest expense for the year ended December 31, 2017.

The total scheduled (principal and interest) debt payments, excluding the line of credit, for the five years subsequent to December 31, 2019 are as follows:



in thousands	Total	Principal	Interest
Scheduled Debt Payments (excluding the line of credit)
2020 ¹	$ 362,691	$ 250,025	$ 112,666
2021	605,685	506,026	99,659
2022	96,041	28	96,013
2023	96,041	30	96,011
2024	96,041	32	96,009


¹	The floating-rate notes due 2020 in the amount of $250,000 thousand are classified as long-term since we intend to refinance, and we have the ability to do so by borrowing on our line of credit.

STANDBY LETTERS OF CREDIT

We provide, in the normal course of business, certain third-party beneficiaries with standby letters of credit to support our obligations to pay or perform according to the requirements of an underlying agreement. Such letters of credit typically have an initial term of one year, typically renew automatically, and can only be modified or canceled with the approval of the beneficiary. All of our standby letters of credit are issued by banks that participate in our $750,000,000 line of credit and reduce the borrowing capacity thereunder. Our standby letters of credit as of December 31, 2019 are summarized by purpose in the table below:



in thousands
Standby Letters of Credit
Risk management insurance				$ 44,781
Reclamation/restoration requirements				7,819
Total				$ 52,600