11    Debt

a)     Long-term debt

Fair value of debt has been estimated on the basis described in Note 3.

(i)    In 2006, the Company entered into a five year $250,000 term loan which bears interest at LIBOR plus a margin dependent on the Company’s credit rating. The Company also entered into a 364-day $350,000 bridge loan agreement. The bridge loan has been classified as long-term as the Company could refinance the loan by drawing under the unsecured revolving credit facility which matures in December 2011. The Company incurred $6,237 in debt issue costs related to the financings for net proceeds of $593,763.

(ii)   In October 2000, the Company completed the sale and leaseback of certain of its Montpelier Steelworks production equipment for cash proceeds of $150,000. The implicit interest rate in the lease is 7.28%, with variable amount semi-annual payments required in January and July each year. The Company has options, but is not obligated, to purchase the equipment after seven and ten years for predetermined amounts and at the end of the 15-year lease term for the fair market value of the equipment, subject to a residual guarantee of $37,500 which has been included in the minimum lease payment requirements shown below.

Anticipated minimum lease payment requirements on the financing lease are as follows:

Minimum payment requirements on long-term debt arrangements, without exercising the options to extend the terms outstanding, are as follows:

b)     Bank lines of credit

In 2006 the Company entered into a new five year unsecured revolving credit facility maturing in December 2011 that provides for up to $500 million in revolving loans. Up to the equivalent of $200,000 of the new facility is available for Canadian or U.S. dollar loans under a sub-limit for Canadian Borrowers. The new credit facility may be increased by up to $500 million at the election of the Company in accordance with the terms set forth in the credit agreement.

At December 31, 2006, borrowings totaling U.S. $45,000 were outstanding and letters of credit of CDN $19,281 and US $13,668 have been issued against the credit facility. The revolving credit facility bears interest at spreads over the U.S. base rate and U.S. dollar LIBOR with separate terms for the U.S. $200,000 Canadian sub-limit which has spreads over the Canadian prime rate, the U.S. base rate, Canadian Bankers’ Acceptances Reference Discount Rate or U.S. dollar LIBOR. Spreads are referenced to a grid-based interest pricing based upon the credit rating of the Company’s senior unsecured long-term debt. The credit facility includes customary financial and other covenants, including a limit on the ratio of debt to total capital of 60%, a limit on the Company’s ability to pledge Company assets, and a limit on consolidations, mergers and sales of assets.

In connection with entering the new credit facility on December 1, 2006, the Company terminated a $150 million multi-currency revolver that was scheduled to mature on November 19, 2007. There were no borrowings under the terminated revolver other than letters of credit outstanding of CDN $11,580 and U.S. $3,775.

c)     Covenants

At December 31, 2006, the Company was in compliance with all financial and other covenants under our debt arrangements.

d)     The 8.75% unsecured notes were issued by IPSCO Inc. (the parent). The notes are guaranteed by all subsidiaries on a full and unconditional and joint and several basis. All subsidiaries are 100% owned and the parent Company has no independent assets or operations. There are no restrictions on the ability of the parent to obtain funds from its subsidiary guarantors.