Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Long-term Debt

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Note 4 - Long-term Debt
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Long-term Debt [Text Block]
4.
LONG-TERM DEBT
 
Convertible Senior Notes. 
On
December 1, 2015,
the Company issued
$175.0
million in aggregate principal amount of its Convertible Senior Notes (the “Convertible Senior Notes”), at an interest rate of
3.75%,
due
December 1, 2022,
to investment funds managed and controlled by the Carlyle Group (collectively “Carlyle”). The Convertible Senior Notes are convertible into shares of Common Stock at a conversion rate of
23.26
shares per
$1,000
in principal amount of such notes, subject to certain conditions, or, into Warrants to purchase an equal number of shares of Common Stock at an exercise price of
$0.01
per share in order to facilitate the Company's compliance with the provisions of the Jones Act.
 
On
May 2, 2018,
the Company and Carlyle entered into an exchange transaction (the “Exchange”) pursuant to which Carlyle exchanged
$50
million in principal amount of the Convertible Senior Notes for Warrants to purchase
1,886,792
shares of Common Stoc
k (to facilitate compliance with the provisions of the Jones Act) at an exercise price of
$0.01
per share, subject to adjustments (the “Carlyle Warrants”), representing an implied exchange rate of approximately
37.73
shares per
$1,000
in principal amount of the Convertible Senior Notes (equivalent to an exchange price of
$26.50
per share). The Carlyle Warrants have a
25
-year term, which commenced
May 2, 2018.
The Company and Carlyle also amended the
$125.0
million in p
rincipal amount of Convertible Senior Notes that remained outstanding following the Exchange to (i) increase the interest rate from
3.75%
per annum to
4.25%
per annum and (ii) extend the maturity date of the Convertible Senior Notes by
12
months to
December 1, 2023
.  Interest on the Convertible Senior Notes is payable semi-annually on
June 15
and
December 15
of each year.  
 
MOI Joint Venture.
 On
F
ebruary 8, 2018,
a wholly-owned subsidiary of SEACOR Marine and MOI formed and capitalized a joint venture named Falcon Global Holdings LLC.  In connection therewith and MOI’s plan of reorganization, which was confirmed on
January 18, 2018,
MOI emerged from its Chapter
11
bankruptcy case. In accordance with the terms of a Joint Venture Contribution and Formation Agreement, the Company and MOI contributed certain liftboat vessels and other related assets to FGH and its designated subsidiaries and FGH and its designated subsidiaries assumed certain operating liabilities and indebtedness associated with the liftboat vessels and related assets. On
February 8, 2018,
Falcon Global USA LLC (“FGUSA”), a wholly-owned subsidiary of FGH, paid
$15.0
million of MOI’s debtor-in-possession obligations and entered into a
$131.1
million credit agreement comprised of a
$116.1
million term loan (the “FGUSA Term Loan”) and a
$15.0
million revolving loan facility (the “FGUSA Revolving Loan Facility”) bearing interest at a variable rate (currently
6.63%
), maturing in
2024
and secured by vessels owned by wholly-owned subsidiaries of FGUSA (collectively, the “FGUSA Credit Facility”). The full amount of the FGUSA Term Loan and other amounts paid by affiliates of MOI satisfied in full the amounts outstanding under MOI’s pre-petition credit facilities. The FGUSA Credit Facility, apart from a guarantee of certain interest payments and participation fees for
two
years after the closing of the transactions, is non-recourse to SEACOR Marine and its subsidiaries other than FGUSA. The Company performed a fair market valuation of the debt reflecting a debt discount of
$10.0
million, which will be amortized over the life of the FGUSA Credit Facility. Scheduled principal payments begin in
202
0.
During the
nine
months ending
September 30, 2018
,
the Company borrowed
$15.0
million under the FGUSA Revolving Loan Facility for working capital purposes.  The Company consolidates FGH as the Company holds 
72%
of the equity interest in FGH and is entitled to appoint a majority of the board of managers of FGH.
 
Windcat.
Du
ring the
nine
months ended
September 30, 2018,
the Company converted
€6.0
million denominated debt to pound sterling denominated debt, paying off approximately
$7.5
million in euro denominated debt and borrowing approximately
$8.5
million in pound sterling denominated debt, resulting in a net increase in USD borrowings of
$1.0
million to be used for future capital commitments.
 
Seacor
88/888.
On
July 5, 2018,
a wholly-owned subsidiary of SEACOR Marine entered into a new term loan of
$11.0
million and used the funds to acquire
two
vessels that were previously managed (but
not
owned) by the Company.  The term loan matures in
2023,
bears interest at a variable rate (currently
5.9%
) and is secured by the
two
vessels. SEACOR Marine provided a limited guaranty of such loan under which claims recoverable from SEACOR Marine shall
not
exceed the lesser of (
x
)
$5.5
million and (y)
50%
of the obligations outstanding at the time a claim is made thereunder. In
October 2018,
the Company entered into an interest rate swap agreement on the notional value of
$5.5
million related to this loan. 
 
Seacor Marine Foreign Holdings
On
September 26, 2018,
SEACOR Marine Foreign Holdings Inc. (“SMFH”), a wholly-owned subsidiary of SEACOR Marine, entered into a
$130.0
million loan facility with a syndicate of lenders administered by DNB Bank ASA.  SMFH's obligations pursuant to the loan facility are secured by mortgages on
20
vessels owned by the Company's vessel owning subsidiaries as well as an assignment of earnings from those subsidiaries.  The loan matures in
2023
and bears interest at a variable rate (currently
6.1875%
).  The obligations of SMFH under the loan facility are guaranteed by SEACOR Marine. The proceeds from the syndicated loan facility were used to pay off other credit facilities of subsidiaries of the Compan
y (
$101.3
million, made up of
$99.9
million principal and
$1.4
million accrued interest), resulting in a net increase in term debt of
$30.1
million.  Principal payments of
$3.3
million per quarter will begin in
December 2018. 
In
October 2018,
the Company entered into an interest rate swap agreement on the notional value of
$65.5
million related to this debt.  As a result of this transaction, the Company recognized a loss of
$0.6
million upon the extinguishment of debt.
 
Letters of Credit
. As of
September 30, 2018,
the Company had outstanding letters of credit of
$5.8
million securing
one
long-term debt obligation,
$0.3
million securing
one
lease obligation and
$2.5
million
for labor and performance guarantees.