Debt
 3 Months Ended
Mar. 31, 2015
Debt Disclosure [Abstract]  
Debt
Debt

Debt consists of the following (in millions):
 
March 31,
2015
 
December 31,
2014
Credit Agreement (a)
$
447.0

 
$
432.0

Senior Notes, including premium of $2.3 and $2.5 (b)
677.3

 
677.5

Capital leases (c)
68.7

 
70.0

Total debt
1,193.0

 
1,179.5

Less current portion of debt
(5.3
)
 
(5.3
)
Debt
$
1,187.7

 
$
1,174.2


(a)
As of March 31, 2015, Starz, LLC had $553.0 million of borrowing capacity under a credit agreement (“Credit Agreement”) that provided for $1,000.0 million of revolving loans and a $50.0 million sub-limit for standby letters of credit with a maturity date of November 16, 2016. As more fully described in Note 10 - Subsequent Events, on April 20, 2015, Starz, LLC terminated the Credit Agreement and entered into a new $1,000.0 million credit agreement (“2015 Credit Agreement”).

Interest on each loan under the Credit Agreement is payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 0.5% and 1.5% depending on the consolidated leverage ratio, as defined in the Credit Agreement. The alternate base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1.0% or (c) LIBOR for a one-month interest period plus 1.0%. Borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.5% and 2.5% depending on the consolidated leverage ratio. The Credit Agreement requires Starz, LLC to pay a commitment fee on any unused portion. The commitment fee varies between 0.25% and 0.50%, depending on the consolidated leverage ratio.

As of March 31, 2015, the following borrowings and related LIBOR or alternate base rate interest rates were outstanding under the Credit Agreement (dollars in millions):

LIBOR or alternate base rate period:
Interest Rate
 
Loan Amount
March 2015 to April 2015
1.9227%
 
$
35.0

March 2015 to April 2015
1.9265%
 
371.0

March 2015 to April 2015
1.9278%
 
36.0

March 2015 and forward
4.0000%
 
5.0

 
 
 
$
447.0


The Credit Agreement contains certain covenants that include restrictions on, among others, incurring additional debt, paying dividends, entering into liens or guarantees, or making certain distributions, investments and other restricted payments. In addition, Starz, LLC must comply with certain financial covenants, including a consolidated leverage ratio, as defined in the Credit Agreement. As of March 31, 2015, Starz, LLC was in compliance with all covenants under the Credit Agreement.

(b)
Starz, LLC and Starz Finance Corp., a wholly-owned subsidiary, co-issued $675.0 million aggregate principal amount of 5.0% senior notes due September 15, 2019 (“Senior Notes”). The Senior Notes bear interest at a rate of 5.0% payable semi-annually on September 15 and March 15 of each year and are guaranteed by Starz Entertainment.

The Senior Notes contain certain covenants that include restrictions on, among others, incurring additional debt, paying dividends, entering into liens and guarantees, or making certain distributions, investments and other restricted payments. As of March 31, 2015, Starz, LLC was in compliance with all covenants under the Senior Notes.

(c)
On January 11, 2013, Starz, LLC entered into a commercial lease for its headquarters building. The term of the lease is ten years, with four successive five-year renewal periods at the option of Starz, LLC. Starz, LLC has recorded a $44.8 million capital lease in connection with this lease agreement with an imputed annual interest rate of 6.4%.

Starz Entertainment has entered into capital lease agreements for its transponder capacity. The agreements expire during 2018 to 2021 and have imputed annual interest rates ranging from 5.5% to 7.0%.

At March 31, 2015, the fair value of the Senior Notes was $697.5 million which was based upon quoted prices in active markets. Starz believes the fair value of the Credit Agreement approximates its carrying value as of March 31, 2015 due to its variable rate nature and Starz’s stable credit spread.

Amounts totaling $1.5 million and $0.9 million of interest expense have been capitalized as investment in films and television programs during the three months ended March 31, 2015 and 2014, respectively.