DEBT

Debt as of March 31, 2016 and 2015 consisted of the following (in thousands):



	March 31,
	2016			2015
6 ¼% Senior Notes due 2022	$	401,535		$	401,535
Term Loan	335,665			222,179
Term Loan Credit Facility	200,000			—
Revolving Credit Facility	144,000			83,800
Airnorth debt	19,652			23,119
Eastern Airways debt	15,643			19,680
Other debt	24,394			—
3% Convertible Senior Notes due 2038, including zero and $0.9 million of unamortized discount, respectively	—			114,109
Total debt	1,140,889			864,422
Less short-term borrowings and current maturities of long-term debt	(62,716		)	(18,730		)
Total long-term debt	$	1,078,173		$	845,692

6 ¼% Senior Notes due 2022 — On October 12, 2012, we completed an offering of $450 million of the 6 ¼% Senior Notes. The 6 ¼% Senior Notes are our unsecured senior obligations and are jointly and severally guaranteed on a senior unsecured basis by certain of our U.S. subsidiaries (the “Guarantor Subsidiaries”). The indenture for our 6 ¼% Senior Notes includes restrictive covenants which limit, among other things, our ability to incur additional debt, issue disqualified stock, pay dividends, repurchase stock, invest in other entities, sell assets, incur additional liens or security, merge or consolidate the Company and enter into transactions with affiliates. Interest on the 6 ¼% Senior Notes is payable on April 15 and October 15 of each year and the 6 ¼% Senior Notes mature on October 15, 2022. We may redeem any of the 6 ¼% Senior Notes at any time on or after October 15, 2017, in whole or part, in cash, at certain redemption prices plus accrued and unpaid interest, if any, to the date of redemption. At any time prior to October 15, 2017, we may redeem all, but not less than all, of the 6 ¼% Senior Notes at a redemption price equal to the principal amount plus an applicable premium and accrued and unpaid interest, if any, to the redemption date. We incurred financing fees of $7.4 million, that are included as deferred financing fees in other assets in the consolidated balance sheets which we will amortize as interest expense in the consolidated statements of operations over the life of the 6 ¼% Senior Notes.

In fiscal year 2015, we repurchased $48.5 million principal amount of the 6 ¼% Senior Notes in the open market at 103.75% to 107.75%, plus accrued interest, for a total of $52.0 million. In connection with these repurchases, we incurred $2.6 million in premium and fees which are included in extinguishment of debt on our consolidated statement of operations, and wrote-off $0.7 million of unamortized deferred financing fees, which is included in interest expense, net on our consolidated statement of operations.

Revolving Credit Facility and Term Loan — As of March 31, 2016, our amended and restated revolving credit and term loan agreement (the “Amended and Restated Credit Agreement”), included a $400 million revolving credit facility with a subfacility of $30 million for letters of credit (the “Revolving Credit Facility” and a five-year, $350 million term loan (the “Term Loan”), (together with the Revolving Credit Facility, the “Credit Facilities”). As of March 31, 2016, we had $144.0 million in borrowings outstanding and $0.6 million in letters of credit outstanding under the Revolving Credit Facility and $336.0 million outstanding under the Term Loan excluding $0.3 million of unamortized discount. The Revolving Credit Facility and the Term Loan mature in April 2019.

As of March 31, 2016, borrowings under the Revolving Credit Facility bear interest at an interest rate equal to, at our option, either the Base Rate or LIBOR (or EURIBO, in the case of Euro-denominated borrowings) plus the applicable margin. “Base Rate” means the higher of (1) the prime rate and (2) the Federal Funds rate plus 0.63% per annum. The applicable margin for borrowings ranged from 0.00% to 2.50%, depending on whether the Base Rate or LIBOR was used and based on our leverage ratio pricing grid. In addition, we are required to pay fees on the daily unused amount of the Revolving Credit Facility in an amount per annum equal to an applicable percentage, which ranges from 0.25% to 0.625% and based on our leverage ratio pricing grid. Fees owed on the letters of credit issued under the Revolving Credit Facility are equal to the applicable margin for LIBOR borrowings. The interest rate was 2.69% and 1.93% as of March 31, 2016 and 2015, respectively.

As of March 31, 2016, obligations under the Amended and Restated Credit Agreement were guaranteed by the Guarantor Subsidiaries and secured by the U.S. cash and cash equivalents, accounts receivable, inventories, non-aircraft equipment, prepaid expenses and other current assets, intangible assets and intercompany promissory notes held by Bristow Group Inc. and the Guarantor Subsidiaries, and 100% and 65% of the capital stock of certain of our principal domestic and foreign subsidiaries, respectively. In addition, the Amended and Restated Credit Agreement included customary covenants, including certain financial covenants and restrictions on our ability to enter into certain transactions, including those that could result in the incurrence of additional indebtedness and liens; the making of loans, guarantees or investments; sale of assets; payments of dividends or repurchases of our capital stock; and entering into transactions with affiliates.

On September 29, 2015, we entered into the sixth amendment to the Amended and Restated Credit Agreement (the “Sixth Amendment”) that, among other things (a) amended the maximum leverage ratio from 4.00:1.00 for all periods to 4.75:1.00 for the fiscal quarters ending from the date of the Sixth Amendment through December 31, 2016, to 4.50:1.00 for the fiscal quarters ending March 31, 2017 through December 31, 2017, and to 4.25:1.00 for the fiscal quarters ending March 31, 2018 through June 30, 2018, after which period the maximum leverage ratio will revert to 4.00:1.00 through maturity, (b) amended the interest coverage ratio from 2.75:1.00 for all periods to 2.00:1.00 for the fiscal quarters ending from the date of the Sixth Amendment through December 31, 2016, to 2.25:1.00 for the fiscal quarters ending March 31, 2017 through December 31, 2017, and to 2.50:1.00 for the fiscal quarters ending March 31, 2018 through June 30, 2018, after which period the minimum interest coverage ratio will revert to 2.75:1.00 through maturity and (c) increased the applicable margin on loans and the commitment fee on unused amounts of revolving commitments if the leverage ratio is greater than 4.25:1.00.

On November 5, 2015, simultaneously with the closing of a senior secured term loan credit agreement (the “Term Loan Credit Agreement”) which provides for $200 million of term loan commitments (the “Term Loan Credit Facility”) described below, we entered into the seventh amendment to the Amended and Restated Revolving Credit and Term Loan Agreement (“Seventh Amendment”) which permits, among other things: (i) entry into the Term Loan Credit Facility and the incurrence of indebtedness thereunder and (ii) the granting of liens by the Company and the Guarantor Subsidiaries in favor of the lenders under the Term Loan Credit Facility on a pari passu secured basis with the liens granted in favor of the lenders under the Amended and Restated Revolving Credit and Term Loan Agreement.

On May 23, 2016, we entered into an eighth amendment to the Amended and Restated Credit Agreement (the “Eighth Amendment”) that, among other things, (a) replaces the maximum leverage ratio requirement with a maximum senior secured leverage ratio, defined as the ratio of the sum of senior secured debt and the present value of obligations under operating leases to consolidated EBITDA for the most recent four consecutive fiscal quarters, which ratio may not be not greater than 4.25:1.00 for each fiscal quarter ending during the period from March 31, 2016 through September 30, 2017and 4.00:1.00 for each fiscal quarter ending thereafter, (b) replaces the interest coverage ratio requirement with a minimum current ratio, defined as the ratio of the sum of consolidated current assets minus the book value of aircraft held for sale plus the unused amount of aggregate revolving commitments less $25 million to consolidated current liabilities, which may not be not less than 1.00:1.00 as of the last day of each fiscal quarter, (c) allows for the issuance of certain additional indebtedness when the leverage ratio exceeds 4.75:1.00, including (i) unsecured, subordinated or convertible indebtedness to refinance outstanding term loans under the Amended and Restated Credit Agreement and the Term Loan Credit Agreement, (ii) additional unsecured, subordinated or convertible indebtedness of up to $100 million in principal amount, (iii) equipment financings, including, without limitation, aircraft sale and leaseback transactions, and (iv) financings of U.K. bases with respect to helicopter SAR services and (d) limits cash dividends on our common stock to $0.07 per share per quarter. In addition, in connection with the Eighth Amendment and the first amendment to the Term Loan Credit Agreement described below, certain of our U.S. subsidiaries have granted liens on certain of their aircraft to secure our obligations under the Amended and Restated Credit Agreement and the Term Loan Credit Agreement on a pari passu secured basis in favor of the lenders under each such agreement. Also as part of the Eight Amendment, the applicable margin for borrowings under the Credit Facilities will range from 0.50% to 3.50% depending on whether the Base Rate or LIBOR was used and based on our leverage ratio pricing grid.

During fiscal year 2016, we had borrowings of $580.9 million and made payments of $520.7 million under the Revolving Credit Facility. Additionally, we had borrowings of $127.4 million and paid $14.0 million to reduce our borrowings under the Term Loan.

Term Loan Credit Facility — On November 5, 2015, we entered into the Term Loan Credit Agreement as discussed above. Proceeds from the Term Loan Credit Facility were initially used to repay loans outstanding under our $400 million Revolving Credit Facility as discussed below. The additional liquidity was used for capital expenditures, working capital needs and general corporate purposes. The interest rate at closing was LIBOR plus a borrowing margin of 2.0%. The Term Loan Credit Facility is guaranteed by certain of our Guarantor Subsidiaries and secured by the U.S. cash and cash equivalents, accounts receivable, inventories, non-aircraft equipment, prepaid expenses and other current assets, intangible assets and intercompany promissory notes held by the Company and the Guarantor Subsidiaries, and 100% and 65% of the capital stock of certain of our principal domestic and foreign subsidiaries, respectively. In addition, the Term Loan Credit Facility includes customary covenants, including certain financial covenants and restrictions on our ability to enter into certain transactions, including those that could result in the incurrence of additional indebtedness and liens; the making of loans, guarantees or investments; sale of assets; payments of dividends or repurchases of our capital stock; and entering into transactions with affiliates.

On May 23, 2016, we entered into the first amendment to the Term Loan Credit Agreement that, among other things, incorporates, as applicable, the provisions of the Eighth Amendment described above.

3% Convertible Senior Notes due 2038 — In June 2008, we completed the sale of $115 million of 3% Convertible Senior Notes due 2038 (the “3% Convertible Senior Notes”). These notes were unsecured senior obligations and ranked effectively junior in right of payment to our existing and future secured indebtedness, ranked equal in right of payment to all of our existing and future unsecured senior debt and ranked senior in right of payment to any of our existing and future subordinated indebtedness. The 3% Convertible Senior Notes were guaranteed by the Guarantor Subsidiaries. Interest was paid on the 3% Convertible Senior Notes on June 15 and December 15 of each year. The notes were convertible, under certain circumstances, using a net share settlement process, into a combination of cash and our common stock (“Common Stock”).

The notes had a maturity date of June 15, 2038 and could not be redeemed by us prior to June 15, 2015, after which they could have been redeemed at 100% of principal amount plus accrued and unpaid interest. Holders of the 3% Convertible Senior Notes had the right to require us to repurchase any or all of their notes for cash on June 15, 2015, 2020, 2025, 2030 and 2035, or in the event of a fundamental change, as defined in the indenture for the 3% Convertible Senior Notes (including the delisting of our Common Stock and certain change of control transactions), at a price equal to 100% of the principal amount plus accrued and unpaid interest.

During June 2015, we repurchased $113.1 million of the $115.0 million principal amount of the 3% Convertible Senior Notes from holders. We funded this repurchase using borrowings on our Revolving Credit Facility. On July 13, 2015, we issued a notice to the holders of the remaining $1.9 million principal amount of notes that we were redeeming the remaining notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest up to, but excluding, the redemption date of August 14, 2015. The conversion value of the 3% Convertible Senior Notes did not exceed the principal balance so we satisfied our conversion obligation by delivering cash of $1.9 million on August 14, 2015. The balances of the debt and equity components of the 3% Convertible Senior Notes as of each period presented are as follows (in thousands):



	March 31, 2016		March 31, 2015
Equity component – net carrying value	$	14,905	$	14,905
Debt component:
Face amount due at maturity	$	—	$	115,000
Unamortized discount	—		(891		)
Debt component – net carrying value	$	—	$	114,109

The debt discount was amortized into interest expense over the expected remaining life of the 3% Convertible Senior Notes to June 2015 (the first put date) using the effective interest rate. The effective interest rate for each of fiscal years 2016, 2015 and 2014 was 6.9%. Interest expense related to our 3% Convertible Senior Notes for fiscal years 2016, 2015 and 2014 was as follows (in thousands):



	Fiscal Year Ended March 31,
	2016		2015		2014
Contractual coupon interest	$	725	$	3,450	$	3,450
Amortization of debt discount	891		4,205		3,708
Total interest expense	$	1,616	$	7,655	$	7,158

Airnorth — Airnorth’s outstanding debt includes interest bearing term loans of $19.2 million and a commercial bill of $0.5 million as of March 31, 2016. The term loans primarily relate to the purchase of aircraft, have a remaining term of approximately 3 to 8 years, and consist of a term loan with interest at LIBOR plus a margin of 2.85% and two term loans each with a fixed rate of 3.1% plus the Reserve Bank of Australia cash rate of 2.0%. The term loans have customary covenants, including certain financial covenants, and varying principal payments. The commercial bill is used for working capital and has a remaining term of approximately 4 years. As of March 31, 2016, the interest rate for the commercial bill was 2.14%.

Eastern Airways — Eastern Airways’ outstanding debt includes interest bearing term loans and borrowings under a revolving credit facility totaling $15.6 million as of March 31, 2016. The term loans were used to refinance other Eastern indebtedness in October 2015 and bear interest at LIBOR plus a margin of 1.75%. The interest rate on the term loans was 2.228% as of March 31, 2016. These term loans have quarterly principal payments and mature on August 31, 2018. Borrowings under the revolving credit facility are used for general corporate, working capital and capital expenditure purposes, and bear interest at LIBOR plus a margin of 1.75%. All outstanding obligations under the revolving credit facility will mature on August 31, 2018.

Other Debt — Other debt includes borrowings for aircraft purchase payments totaling $24.4 million with interest rates ranging from 2.5% to 3.5% payable in December 2016 and January 2017.

Other Matters — Aggregate annual maturities (which excludes unamortized discount of $0.3 million) for all debt for the next five fiscal years and thereafter are as follows (in thousands):



Fiscal year ending March 31
2017	$	62,716
2018	243,145
2019	49,298
2020	376,211
2021	2,537
Thereafter	407,316
	$	1,141,223

Interest paid in fiscal years 2016, 2015 and 2014 was $41.8 million, $38.0 million and $38.4 million, respectively. Capitalized interest was $10.6 million, $14.6 million and $14.1 million in fiscal years 2016, 2015 and 2014, respectively.