Debt | 8. Debt Debt outstanding, excluding capital leases, consisted of the following: September 30, 2016 December 31, 2015 (In thousands) Principal Balance Unamortized Discount and Debt Issuance Costs Net Carrying Amount Principal Balance Unamortized Discount and Debt Issuance Costs Net Carrying Amount 1.25% Cash Convertible Senior Notes $ 345,000 $ 52,370 $ 292,630 $ 345,000 $ 61,771 $ 283,229 Senior Secured Credit Facility 387,500 5,027 382,473 346,875 5,704 341,171 Netsmart Non-Recourse Debt: First Lien Term Loan 394,013 16,720 377,293 0 0 0 Second Lien Term Loan 167,000 9,367 157,633 0 0 0 Other debt 37 0 37 183 0 183 Total debt $ 1,293,550 $ 83,484 $ 1,210,066 $ 692,058 $ 67,475 $ 624,583 Less debt payable within one year - excluding Netsmart 12,538 487 12,051 12,657 479 12,178 Less debt payable within one year - Netsmart 3,950 2,613 1,337 0 0 0 Total long-term debt, less current maturities $ 1,277,062 $ 80,384 $ 1,196,678 $ 679,401 $ 66,996 $ 612,405 Interest expense consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Interest expense $ 3,896 $ 4,370 $ 11,029 $ 12,239 Amortization of discounts and debt issuance costs 3,522 3,508 10,401 10,321 Write off of unamortized deferred debt issuance costs 0 1,376 0 1,433 Netsmart: Interest expense (1) 11,019 0 19,549 0 Amortization of discounts and debt issuance costs 930 0 1,778 0 Total interest expense $ 19,367 $ 9,254 $ 42,757 $ 23,993 (1) Includes interest expense related to capital leases. Interest expense related to the 1.25% Notes was comprised of the following: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Coupon interest at 1.25% $ 1,078 $ 1,078 $ 3,234 $ 3,234 Amortization of discounts and debt issuance costs 3,185 3,035 9,401 8,960 Total interest expense related to the 1.25% Notes $ 4,263 $ 4,113 $ 12,635 $ 12,194 Allscripts Senior Secured Facility As of September 30, 2016, $237.5 million under a term loan, $150.0 million under our revolving credit facility, and $0.8 million in letters of credit were outstanding under our senior secured credit facility. As of September 30, 2016, the interest rate on the United States dollars-denominated borrowings under our senior secured credit facility was LIBOR plus 2.00%, which totaled 2.52%. We were in compliance with all covenants under the senior secured credit facility agreement as of September 30, 2016. As of September 30, 2016, we had $399.2 million available, net of outstanding letters of credit, under our revolving credit facility. There can be no assurance that we will be able to draw on the full available balance of our revolving credit facility if the financial institutions that have extended such credit commitments become unwilling or unable to fund such borrowings. As of September 30, 2016, the if-converted value of the 1.25% Notes did not exceed the 1.25% Notes’ principal amount. Netsmart Non-Recourse Debt On April 19, 2016, Netsmart entered into a First and Second Lien Credit Agreement (the “Netsmart First Lien Credit Agreement” and the “Netsmart Second Lien Credit Agreement”, respectively), with a syndicate of financial institutions and UBS AG, Stamford Branch, as administrative agent. The Netsmart First Lien Credit Agreement provides for a $395 million senior secured 7-year term loan credit facility (the “Netsmart First Lien Term Loan”) and a $50 million senior secured 5-year revolving loan credit facility (the “Netsmart Revolving Facility”). The Netsmart Second Lien Credit Agreement provides for a $167 million senior secured 7.5-year term loan credit facility (the “Netsmart Second Lien Term Loan,” and, together with the Netsmart First Lien Credit Agreement, the “Netsmart Credit Agreements”). Each of Netsmart’s obligations under the Netsmart Credit Agreements are guaranteed by Intermediate, each other Borrower, each Subsidiary Guarantor and any other person who becomes a party to the Netsmart Credit Agreements, under an unconditional guaranty. Netsmart’s debt under the Netsmart Credit Agreements is non-recourse to Allscripts and its wholly-owned subsidiaries. The Netsmart Revolving Facility will terminate on April 19, 2021 and the Netsmart First Lien Term Loan matures on April 19, 2023. The Netsmart Second Lien Term Loan matures on October 19, 2023. All unpaid principal of, and interest accrued on, such loans must be repaid on their respective maturity dates. The outstanding principal amount of the Netsmart First Lien Term Loan and the Netsmart Revolving Facility bear interest at a rate equal to (a) with respect to LIBO Rate Loans, Adjusted LIBO Rate plus 4.75% and (b) with respect to ABR Loans, 3.75% (provided, however, that in respect of the Netsmart Revolving Loans, such rate may step-down to 4.25% and 3.25%, respectively, depending on the then-applicable leverage ratio). The outstanding principal amount of the Netsmart Second Lien Term Loan bears interest at a rate equal to (a) with respect to LIBO Rate Loans, Adjusted LIBO Rate plus 9.50% and (b) with respect to ABR Loans, 8.50%. The proceeds from the funding of the Netsmart Credit Agreements were used to, inter alia The Netsmart Credit Agreements contain a financial covenant that Intermediate and its subsidiaries maintain a maximum ratio of total debt to Consolidated Adjusted EBITDA. The entire principal amount of the Netsmart Credit Agreements and any accrued but unpaid interest may be declared immediately due and payable if an event of default occurs. Events of default under the Netsmart Credit Agreements include (but are not limited to) failure to make payments when due, a default in the performance of any covenants in the Netsmart Credit Agreements or related documents or certain changes of control of Intermediate and/or of Netsmart. The Netsmart First Lien Credit Agreement Netsmart Second Lien Credit Agreement In connection with the Netsmart Credit Agreements, during the second quarter of 2016, Netsmart incurred fees and other costs totaling $27.9 million, which were capitalized and included in the net borrowings outstanding under Netsmart’s Credit Agreements as of September 30, 2016. As of September 30, 2016, $394.0 million under the Netsmart First Lien Term Loan, $167.0 million under the Netsmart Second Lien Term Loan and $1.5 million in letters of credit under the Netsmart Revolving Facility were outstanding. As of September 30, 2016, the interest rate on the borrowings under the Netsmart First Lien Term Loan and the Netsmart Revolving Facility was Adjusted LIBO plus 4.75%, which totaled 5.75%. As of September 30, 2016, the interest rate on the borrowings under the Netsmart Second Lien Term Loan was Adjusted LIBO plus 9.5%, which totaled 10.5%. Netsmart was in compliance with all covenants under its Credit Agreements as of September 30, 2016. As of September 30, 2016, Netsmart had $48.5 million available, net of outstanding letters of credit, under the Netsmart Revolving Facility. There can be no assurance that Netsmart will be able to draw on the full available balance of the Netsmart Revolving Facility if the financial institutions that have extended such credit commitments become unwilling or unable to fund such borrowings. The following table summarizes our future payment obligations under our debt as of September 30, 2016: (In thousands) Total Remainder of 2016 2017 2018 2019 2020 Thereafter 1.25% Cash Convertible Senior Notes (1) $ 345,000 $ 0 $ 0 $ 0 $ 0 $ 345,000 $ 0 Term Loan 237,500 3,125 15,625 28,125 40,625 150,000 0 Revolving Facility 150,000 0 0 0 0 150,000 0 Netsmart Non-Recourse Debt: First Lien Term Loan 394,013 988 3,952 3,952 3,952 3,952 377,217 Second Lien Term Loan 167,000 0 0 0 0 0 167,000 Other debt 37 37 0 0 0 0 0 Total debt $ 1,293,550 $ 4,150 $ 19,577 $ 32,077 $ 44,577 $ 648,952 $ 544,217 (1) |