The components of our long-term debt are presented in the following tables (in thousands):

 

		December 31,
		2019				2018
Credit Agreement borrowings		$	105,000			$	21,000
Senior Second Lien Notes:
Principal			625,000				625,000
Unamortized debt issuance costs			(10,467	)			(12,465	)
Total Senior Second Lien Notes			614,533				612,535
Total long-term debt		$	719,533			$	633,535

 

Aggregate annual maturities of amounts recorded for long-term debt as of  are as follows (in millions):   -  See below for a discussion of our debt instruments.

 

 

On we entered into a series of transactions to effect a refinancing of substantially all of our outstanding indebtedness. At that time, we issued million of Senior Second Lien Notes due (the “Senior Second Lien Notes”), which were issued at par with an interest rate of per annum that matures on and are governed under the terms of the Indenture of the Senior Second Lien Notes (the “Indenture”) dated as of entered into by and among the Company, the Guarantors, and Wilmington Trust, National Association, as trustee (the “Trustee”).  The estimated annual effective interest rate on the Senior Second Lien Notes was which includes debt issuance costs.  Interest on the Senior Second Lien Notes is payable in arrears on and of each year.

 

   Prior to we redeem all or any portion of the Senior Second Lien Notes at a redemption price equal to of the principal amount of the outstanding Senior Second Lien Notes plus accrued and unpaid interest, if any, to the redemption date, plus the “Applicable Premium” (as defined in the Indenture).  In addition, prior to we at our option, on or more occasions redeem up to of the aggregate original principal amount of the Senior Second Lien Notes in an amount greater than the net cash proceeds from certain equity offerings at a redemption price of of the principal amount of the outstanding Senior Second Lien Notes plus accrued and unpaid interest, if any, to the redemption date.

 

On and after we redeem the Senior Second Lien Notes, in whole or in part, at redemption prices (expressed as percentages of the principal amount thereof) equal to for the -month period beginning for the -month period beginning and on and thereafter, plus accrued and unpaid interest, if any, to the redemption date.  The Senior Second Lien Notes are guaranteed by W&T Energy VI and W & T Energy VII, LLC (together, the “Guarantor Subsidiaries”).  If we experience certain change of control events, we will be required to offer to repurchase the notes at of the principal amount, plus accrued and unpaid interest, if any, to the repurchase date.

 

Certain entities controlled by Tracy W. Krohn, Chairman, Chief Executive Officer ("CEO") and President of the Company, and his family were invested in certain existing notes of the Company that were repurchased by the Company in connection with the Refinancing Transaction (defined below). The Krohn entities tendered their existing notes on the same terms as were made available to all other holders of the existing notes pursuant to the publicly disclosed Company offer to purchase any and all such notes and reinvested an amount approximately equal to the proceeds from such tenders by purchasing approximately million principal in Senior Second Lien Notes at the same price offered to other initial investors in the offering of such notes.  As part of the Refinancing Transaction, the Krohn entities also had their previously disclosed million investment in the Company’s Second Lien Term Loan (defined below) liquidated as the loan was repaid in full.

 

The Senior Second Lien Notes are secured by a -priority lien on all of our assets that are secured under the Credit Agreement (defined below).  The Senior Second Lien Notes contain covenants that limit or prohibit our ability and the ability of certain of our subsidiaries to: (i) make investments; (ii) incur additional indebtedness or issue certain types of preferred stock; (iii) create certain liens; (iv) sell assets; (v) enter into agreements that restrict dividends or other payments from the Company’s restricted subsidiaries to the Company; (vi) consolidate, merge or transfer all or substantially all of the assets of the Company; (vii) engage in transactions with affiliates; (viii) pay dividends or make other distributions on capital stock or subordinated indebtedness; and (ix) create unrestricted subsidiaries that would be restricted by the covenants of the Indenture.  These covenants are subject to exceptions and qualifications set forth in the Indenture.  In addition, most of the above described covenants will terminate if both S&P Global Ratings, a division of S&P Global Inc., and Moody’s Investors Service, Inc. assign the Senior Second Lien Notes an investment grade rating and default exists with respect to the Senior Second Lien Notes.

 

 

Concurrently with the issuance of the Senior Second Lien Notes, we renewed our credit facility by entering into the Sixth Amended and Restated Credit Agreement (the “Credit Agreement”), dated as of among the Company, as borrower, the Guarantor Subsidiaries from time to time party thereto, Lenders from time to time party thereto and Toronto Dominion (Texas) LLC, as administrative agent with a maturity date of The primary items of the Credit Agreement, as amended, are as follows, with certain terms defined under the Credit Agreement:

 

 

 

 

 

 

 

 

 

Availability under the Credit Agreement is subject to semi-annual redeterminations of our borrowing base to occur on or before and each calendar year, and certain additional redeterminations that be requested at the discretion of either the lenders or the Company.  The borrowing base is calculated by our lenders based on their evaluation of our proved reserves and their own internal criteria.  Any redetermination by our lenders to change our borrowing base will result in a similar change in the availability under the Credit Agreement.  The Credit Agreement’s security is collateralized by a priority lien on substantially all of our oil and natural gas properties and certain personal property.

 

Borrowings outstanding under the Credit Agreement are reported in the table above.  As of and we had million and million, respectively, outstanding in letters of credit under the Credit Agreement.  The estimated annual effective interest rate on borrowings, exclusive of debt issuance costs, commitment fees and other fees was

 

As of we were in compliance with all applicable covenants of the Credit Agreement and Senior Second Lien Notes.

 

For information about fair value measurements of our long-term debt, refer to Note

 

 

On funds from the issuances of the Senior Second Lien Notes, borrowings under the Credit Agreement and cash on hand were used to repurchase and retire, repay or redeem all of the prior debt instruments, which are listed below. The issuance of the Senior Second Lien Notes, execution of the Credit Agreement and extinguishment of the prior debt instruments are collectively referred to as the “Refinancing Transaction”.  A net gain of million was recorded as a result of the Refinancing Transaction, comprised of the write off of carrying value adjustments of the prior debt instruments and partially offset by premiums paid.  The effect on both basic and diluted earnings per share for was per share, which assumes the gain would affect our income tax expense for

 

 

The following debt instruments were repurchased and retired, repaid or redeemed, including interest and applicable premiums as part of the Refinancing Transaction on

 

 

 

 

 

 

 

 

On we consummated a transaction whereby we exchanged approximately million in aggregate principal amount, or of our Unsecured Senior Notes for: (i) million in aggregate principal amount of Second Lien PIK Toggle Notes; (ii) million in aggregate principal amount of Third Lien PIK Toggle Notes; and (iii) million shares of our common stock (collectively, the “Debt Exchange”).  At the same time on closing on the Debt Exchange, we closed on a million, Lien Term Loan, with the then largest holder of our Unsecured Senior Notes (collectively with the Debt Exchange, the “Exchange Transaction”).  We accounted for the Exchange Transaction as a Troubled Debt Restructuring pursuant to the guidance under ASC -  Under ASC - the carrying value of the Second Lien PIK Toggle Notes, Third Lien PIK Toggle Notes and Lien Term Loan (the Debt”) was measured using all future undiscounted payments (principal and interest); therefore, interest expense was recorded for the Debt in the Consolidated Statements of Operations from to Therefore, our reported interest expense was significantly less than the contractual interest payments for the period the Debt was outstanding.  Under ASC - payments related to the Debt are reported in the financing section of the Condensed Consolidated Statements of Cash Flows.

 

During the quarter of interest on the Second Lien PIK Toggle Notes and the Third Lien PIK Toggle Notes was paid in cash rather than in kind.  As a result of the cash interest payment, an million net reduction was recorded to long-term debt on the Consolidated Balance Sheet and the offset to in the Consolidated Statement of Operations.  For million of additional expense was recorded to for differences between actual and estimated transaction expenses.  The effect of these transactions on both basic and diluted earnings per share for was per share, which assumes the net gain would affect our income tax benefit for that period.