LONG-TERM DEBT AND NOTES PAYABLE

9 Months Ended

Sep. 30, 2015

NOTE 7—LONG-TERM DEBT AND NOTES PAYABLE

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

	September 30, 2015		December 31, 2014
	(In thousands)
Long-term debt consists of:
Senior Notes	$	491,537	$	490,354
Term Loan		290,438		291,424
North Ocean 105 Construction Financing		42,213		45,888
Amortizing Notes		24,329		33,258
Capital lease obligation		2,717		2,802
Other financing		-		743
		851,234		864,469
Less: Amounts due within one year		27,749		27,026
Total long-term debt	$	823,485	$	837,443

LC Facility and Cash-Collateralized Bilateral Letters of Credit

As of September 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”) provided under our principal credit agreement (“the Credit Agreement”) was $320.4 million and $195.8 million, respectively. No financial letters of credit have been issued under the LC Facility.

In October 2015, we entered into an Amendment No. 1 and Commitment Increase Supplement (the “Commitment Increase Supplement”), which amended the Credit Agreement primarily to increase the existing letter of credit capacity from $400 million to $520 million, by adding to the Credit Agreement a new letter of credit lender and by allowing existing letter of credit lenders to increase their respective letter of credit commitments. Costs associated with the Commitment Increase Supplement were not material.

As of September 30, 2015, we had outstanding an aggregate face amount of approximately $115.7 million of cash collateralized letters of credit issued on a bilateral basis outside the LC Facility, including financial letters of credit of $46.5 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

As of September 30, 2015 and December 31, 2014, bank guarantees issued under general reimbursement agreements in support of contracting activities in the Middle East and India totaled $89.2 million and $56.2 million, respectively.

Surety Bonds

As of September 30, 2015 and December 31, 2014, surety bonds issued under general agreements of indemnity in favor of surety underwriters based in Mexico in support of contracting activities of our subsidiaries J. Ray McDermott de México, S.A. de C.V. and McDermott, Inc. totaled $49.4 million and $52.5 million, respectively.

Debt Issuance Costs

Debt issuance costs of $21.8 million and $27.1 million as of September 30, 2015 and December 31, 2014, respectively, are included in the above carrying values of our long-term debt obligations.