The payout ratio is very low on this one so there is still plenty of room to raise this dividend. The company has been great about raising the dividend each year - just pick up the pace some.
Also, reducing the debt would just free up more cash to use for future dividends so paying down the debt might make sense.
The company is throwing off plenty enough cash to do both of these things.
Pay off the debt? According to Morningstar they have been quite busy. I wish I owned some of those 7.25% bonds.
Pay off the debt. Keep the same dividend.