Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

Denbury Resources Inc. 2009 Annual Report 89Note 6. Long-Term DebtDecember 31,In thousands 2009 20089.75% Senior Subordinated Notes due 2016 $ 426,350 $ —Discount on Senior Subordinated Notes due 2016 (26,424) —7.5% Senior Subordinated Notes due 2015 300,000 300,000Premium on Senior Subordinated Notes due 2015 513 5997.5% Senior Subordinated Notes due 2013 225,000 225,000Discount on Senior Subordinated Notes due 2013 (631) (826)NEJD financing – Genesis 170,633 173,618Free State financing – Genesis 79,987 76,634Senior bank loan 125,000 75,000Capital lease obligations – Genesis 3,780 4,544Capital lease obligations 2,168 2,705Total 1,306,376 857,274Less current obligations 5,308 4,507Long-term debt and capital lease obligations $ 1,301,068 $ 852,7679.75% Senior Subordinated Notes due 2016On February 13, 2009, we issued $420 million of 9.75% Senior Subordinated Notes due 2016 (“2016 Notes”). The2016 Notes, which carry a coupon rate of 9.75%, were sold at a discount (92.816% of par), which equates to aneffective yield to maturity of approximately 11.25%. The net proceeds of $381.4 million were used to repay most of ourthen-outstanding borrowings under our bank credit facility, which increased from the December 31, 2008 balance,primarily associated with the funding of the Hastings Field acquisition (see Note 2, “Acquisitions and Divestitures”). Inconjunction with this debt offering we amended our bank credit facility in early February 2009, which, among otherthings, allowed us to issue these senior subordinated notes.In June 2009, we issued an additional $6.35 million of 2016 Notes to our founder, Gareth Roberts, as part of aFounder’s Retirement Agreement. In connection with this issuance, we recorded compensation expense of$6.35 million in “General and administrative” expense in our Consolidated Statement of Operations during the yearended December 31, 2009.The 2016 Notes mature on March 1, 2016, and interest on the 2016 Notes is payable March 1 and September 1 ofeach year. We may redeem the 2016 Notes in whole or in part at our option beginning March 1, 2013, at the followingredemption prices: 104.875% after March 1, 2013, 102.4375% after March 1, 2014, and 100% after March 1, 2015. Inaddition, we may at our option, redeem up to an aggregate of 35% of the 2016 Notes before March 1, 2012, at a priceof 109.75%. The indenture contains certain restrictions on our ability to incur additional debt, pay dividends on ourcommon stock, make investments, create liens on our assets, engage in transactions with our affiliates, transfer or sellassets, consolidate or merge, or sell substantially all of our assets. The 2016 Notes are not subject to any sinking fundrequirements. All of our significant subsidiaries fully and unconditionally guarantee this debt.NEJD Financing and Free State FinancingOn May 30, 2008, we closed on two transactions with Genesis involving two of our pipelines. The two transactionshave been recorded as financing leases. See Note 3, “Related Party Transactions – Genesis – NEJD Pipeline and FreeState Pipeline Transactions.”7.5% Senior Subordinated Notes due 2015On April 3, 2007, we issued $150 million of Senior Subordinated Notes due 2015 as an additional issuance under ourexisting indenture governing our December 2005 sale of $150 million of 7.5% Senior Subordinated Notes due 2015(collectively, the “2015 Notes”) discussed below. These notes, which carry a coupon rate of 7.5%, were sold at 100.5%of par, which equates to an effective yield to maturity of approximately 7.4%. Net proceeds from the sale wereapproximately $149.2 million. The net proceeds were used to repay a portion of the outstanding borrowings under ourbank credit facility.Notes to Consolidated Financial StatementsForm 10-K Part II