Note 3. Long-Term Debt

The following long-term debt and capital lease obligations were outstanding as of the dates indicated:



	September 30,			December 31,
In thousands	2017			2016
Senior Secured Bank Credit Agreement	$	495,000		$	301,000
9% Senior Secured Second Lien Notes due 2021	614,919			614,919
6⅜% Senior Subordinated Notes due 2021	215,144			215,144
5½% Senior Subordinated Notes due 2022	772,912			772,912
4⅝% Senior Subordinated Notes due 2023	622,297			622,297
Other Subordinated Notes, including premium of $1 and $3, respectively	2,251			2,253
Pipeline financings	195,258			202,671
Capital lease obligations	34,542			48,718
Total debt principal balance	2,952,323			2,779,914
Future interest payable on 9% Senior Secured Second Lien Notes due 2021 ⁽¹⁾	203,686			228,825
Issuance costs on senior secured second lien and senior subordinated notes	(13,568		)	(15,641		)
Total debt, net of debt issuance costs	3,142,441			2,993,098
Less: current maturities of long-term debt ⁽¹⁾	(85,002		)	(83,366		)
Long-term debt and capital lease obligations	$	3,057,439		$	2,909,732

(1)

Future interest payable on our 9% Senior Secured Second Lien Notes due 2021 (the “2021 Senior Secured Notes”) represents most of the interest due over the term of this obligation, which has been accounted for as debt in accordance with Financial Accounting Standards Board Codification (“FASC”) 470-60, Troubled Debt Restructuring by Debtors. Our current maturities of long-term debt as of September 30, 2017 include $50.5 million of future interest payable related to the 2021 Senior Secured Notes that is due within the next twelve months.

The ultimate parent company in our corporate structure, Denbury Resources Inc. (“DRI”), is the sole issuer of all of our outstanding 2021 Senior Secured Notes and our senior subordinated notes. DRI has no independent assets or operations. Each of the subsidiary guarantors of such notes is 100% owned, directly or indirectly, by DRI, and the guarantees of the notes are full and unconditional and joint and several; any subsidiaries of DRI that are not subsidiary guarantors of such notes are minor subsidiaries.

Senior Secured Bank Credit Facility

In December 2014, we entered into an Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders party thereto (as amended, the “Bank Credit Agreement”). The Bank Credit Agreement is a senior secured revolving credit facility with a maturity date of December 9, 2019 and semiannual borrowing base redeterminations in May and November of each year. As part of our fall 2017 semiannual borrowing base redetermination, the borrowing base and lender commitments for our Bank Credit Agreement were reaffirmed at $1.05 billion, with the next such redetermination scheduled for May 2018. If our outstanding debt under the Bank Credit Agreement were to ever exceed the borrowing base, we would be required to repay the excess amount over a period not to exceed six months. The weighted average interest rate on borrowings outstanding under the Bank Credit Agreement was 4.3% as of September 30, 2017. We incur a commitment fee of 0.50% on the undrawn portion of the aggregate lender commitments under the Bank Credit Agreement.

In May 2017, we entered into a Fourth Amendment to the Bank Credit Agreement, pursuant to which the lenders agreed to amend certain terms and financial performance covenants through the remaining term of the Bank Credit Agreement in order to provide more flexibility in managing the credit extended by our lenders, including eliminating the consolidated total net debt to EBITDAX financial performance covenants that were scheduled to go into effect starting in 2018. In addition, the amendment increased the applicable margin for ABR Loans and LIBOR Loans by 50 basis points, such that the margin for ABR Loans now ranges from 1.5% to 2.5% per annum and the margin for LIBOR Loans now ranges from 2.5% to 3.5% per annum. In November 2017, we entered into a Fifth Amendment to the Bank Credit Agreement, pursuant to which the lenders agreed to increase the amount of junior lien (i.e., second lien or third lien) debt we can incur from $1.0 billion to $1.2 billion outstanding in the aggregate at any one time.

The Bank Credit Agreement contains certain financial performance covenants through the maturity of the facility, including the following:


•	A consolidated senior secured debt to consolidated EBITDAX covenant, with such ratio not to exceed 3.0 to 1.0 through the first quarter of 2018, and thereafter not to exceed 2.5 to 1.0. Currently, only debt under our Bank Credit Agreement is considered consolidated senior secured debt for purposes of this ratio;


•	A minimum permitted ratio of consolidated EBITDAX to consolidated interest charges of 1.25 to 1.0; and


•	A requirement to maintain a current ratio of 1.0 to 1.0.

The above description of our Bank Credit Agreement is qualified by the express language and defined terms contained in the Bank Credit Agreement and the amendments thereto, each of which are filed as exhibits to our periodic reports filed with the SEC.

2016 Senior Subordinated Notes Exchange

During May 2016, in privately negotiated transactions, we exchanged a total of $1,057.8 million of our existing senior subordinated notes for $614.9 million principal amount of our 2021 Senior Secured Notes plus 40.7 million shares of Denbury common stock, resulting in a net reduction from these exchanges of $442.9 million in our debt principal. As a result of this debt exchange, we recognized a gain of $12.0 million during the nine months ended September 30, 2016, which is included in “Gain on debt extinguishment” in the accompanying Consolidated Statements of Operations.

2016 Repurchases of Senior Subordinated Notes

During the first and third quarters of 2016, we repurchased a total of $181.9 million of our outstanding long-term indebtedness in open-market transactions for a total purchase price of $76.7 million, excluding accrued interest. In connection with these transactions, we recognized a $103.1 million gain on extinguishment, net of unamortized debt issuance costs written off, during the nine months ended September 30, 2016. As of November 6, 2017, under the Bank Credit Agreement, up to an additional $148.3 million may be spent on open market or other repurchases or redemptions of our senior subordinated notes.