NOTE 3 DEBT

At September 30, 2016 and 2015, we had the following unsecured long-term debt outstanding at rates and maturities shown in the following table:

	Principal				Unamortized Discount and Debt Issuance Costs
	September 30, 2016		September 30, 2015		September 30, 2016			September 30, 2015
	(in thousands)
Unsecured senior notes issued July 21, 2009:
Due July 21, 2016	$	—	$	40,000	$	—		$	(498	)
Unsecured senior notes issued March 19, 2015:
Due March 19, 2025		500,000		500,000		(8,153	)		(7,965	)

		500,000		540,000		(8,153	)		(8,463	)
Less long-term debt due within one year		—		40,000		—			(906	)

Long-term debt	$	500,000	$	500,000	$	(8,153	)	$	(7,557	)

We had $40 million of senior unsecured fixed-rate notes outstanding that matured in July 2016. The final annual principal repayment of $40 million along with interest was paid with cash on hand in July 2016.

On March 19, 2015, we issued $500 million of 4.65 percent 10-year unsecured senior notes. The net proceeds, after discount and issuance cost, have been or will be used for general corporate purposes, including capital expenditures associated with our rig construction program. Interest is payable semi-annually on March 15 and September 15. The debt discount is being amortized to interest expense using the effective interest method. The debt issuance costs are amortized straight-line over the stated life of the obligation, which approximates the effective interest method.

On July 13, 2016, we terminated our previous $300 million unsecured revolving credit facility with no borrowings, and its $40.3 million of letters of credit were transferred to a new $300 million unsecured revolving credit facility which will mature on July 13, 2021. The new facility has $75 million available to use as letters of credit. The majority of any borrowings under the facility would accrue interest at a spread over the London Interbank Offered Rate (LIBOR). We also pay a commitment fee based on the unused balance of the facility. Borrowing spreads as well as commitment fees are determined according to a scale based on a ratio of our total debt to total capitalization. The spread over LIBOR ranges from 1.125 percent to 1.75 percent per annum and commitment fees range from .15 percent to .30 percent per annum. Based on our debt to total capitalization on September 30, 2016, the spread over LIBOR and commitment fees would be 1.125 percent and .15 percent, respectively. There is one financial covenant in the facility which requires us to maintain a funded leverage ratio (as defined) of less than 50 percent. The credit facility contains additional terms, conditions, restrictions and covenants that we believe are usual and customary in unsecured debt arrangements for companies of similar size and credit quality including a limitation that priority debt (as defined in the agreement) may not exceed 17.5% of the net worth of the Company. As of September 30, 2016, there were no borrowings, but there were three letters of credit outstanding in the amount of $38.8 million. At September 30, 2016, we had $261.2 available to borrow under our $300 million unsecured credit facility. Subsequent to September 30, 2016, another letter of credit was issued for $1.5 million lowering the amount available to borrow to $259.7 million.

In addition to the letters of credit mentioned in the preceding paragraph, at September 30, 2016, we had two letters of credit outstanding, totaling $12 million that were issued to support international operations. These additional letters of credit were issued separately from the $300 million credit facility discussed in the preceding paragraph and do not reduce the available borrowing capacity of that facility.

The applicable agreements for all unsecured debt contain additional terms, conditions and restrictions that we believe are usual and customary in unsecured debt arrangements for companies that are similar in size and credit quality. At September 30, 2016, we were in compliance with all debt covenants.

At September 30, 2016, aggregate maturities of long-term debt are as follows (in thousands):

Years ending September 30,
2017	$	—
2018		—
2019		—
2020		—
2021		—
Thereafter	$	500,000

	$	500,000