LONG-TERM DEBT AND NOTES PAYABLE

6 Months Ended

Jun. 30, 2015

NOTE 7—LONG-TERM DEBT AND NOTES PAYABLE

The carrying values of our long-term debt obligations are as follows:

	June 30, 2015		December 31, 2014
	(In thousands)

Long-term debt consists of:
Senior Notes	$	490,864	$	490,354
Term Loan		290,643		291,424
North Ocean 105 Construction Financing		42,075		45,888
Amortizing Notes		27,366		33,258
Capital lease obligation		2,719		2,802
Other financing		495		743
		854,162		864,469
Less: Amounts due within one year		27,690		27,026
Total long-term debt	$	826,472	$	837,443

LC Facility and Cash-Collateralized Bilateral Letters of Credit

As of June 30, 2015 and December 31, 2014, the aggregate face amount of letters of credit issued under our $400 million first-lien/ first-out, three-year letter of credit facility (the “LC Facility”) was $207.8 million and $195.8 million, respectively. No financial letters of credit have been issued under the LC Facility.

As of June 30, 2015, we had outstanding an aggregate face amount of approximately $116.8 million of cash collateralized letters of credit issued on a bilateral basis outside the LC Facility, including financial letters of credit of $47.7 million. Financial letters of credit represent letters of credit that do not support ordinary course project performance obligations or bids. As of December 31, 2014, we had outstanding an aggregate face amount of approximately $88.8 million of cash collateralized letters of credit issued on a bilateral basis outside the LC Facility, including financial letters of credit of $19.7 million. We have included the supporting cash collateral in restricted cash and cash equivalents in the accompanying Consolidated Balance Sheets.

Bank Guarantees

In 2012, McDermott Middle East, Inc. and MII executed a general reimbursement agreement in favor of a bank located in the U.A.E. relating to issuances of bank guarantees in support of contracting activities in the Middle East and India. As of June 30, 2015 and December 31, 2014, bank guarantees issued under those arrangements totaled $75.6 million and $56.2 million, respectively.

Surety Bonds

In 2012 and 2011, we executed general agreements of indemnity in favor of surety underwriters based in Mexico relating to surety bonds issued in support of contracting activities of our subsidiaries J. Ray McDermott de México, S.A. de C.V. and McDermott, Inc. As of June 30, 2015 and December 31, 2014, bonds issued under these arrangements totaled $49.8 million and $52.5 million, respectively.

Debt Issuance Costs

Debt issuance costs of $24 million and $27.1 million as of June 30, 2015 and December 31, 2014, respectively, are included in the above carrying values of our long-term debt obligations.