Debt and Capital Lease Obligations

9 Months Ended

Sep. 30, 2017

Debt and Capital Lease Obligations [Abstract]


4.	DEBT AND CAPITAL LEASE OBLIGATIONS

Debt

There was no significant activity related to our debt during the nine months ended September 30, 2017.

During the nine months ended September 30, 2016, the following activity occurred related to our debt:


•	VLP borrowed $139 million and $210 million under its $750 million senior unsecured revolving credit facility (the VLP Revolver) in connection with VLP’s acquisitions from us of the McKee Terminal Services Business in April 2016 and the Meraux and Three Rivers Terminal Services Business in September 2016, respectively;


•	we issued $1.25 billion of 3.4 percent senior notes due September 15, 2026. Proceeds from this debt issuance totaled $1.246 billion and were used in October 2016 to redeem $750 million aggregate principal amount of our 6.125 percent Senior Notes due 2017 and $200 million aggregate principal amount of our 7.2 percent Senior Notes due 2017. We also incurred $10 million of debt issuance costs; and


•	one of our consolidated joint ventures entered into a C$72 million senior secured credit facility.

We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (in millions):



				September 30, 2017
	Facility Amount		Maturity Date	Outstanding Borrowings		Letters of Credit Issued		Availability
Committed facilities:
Valero Revolver	$	3,000	November 2020	$	—	$	367	$	2,633
VLP Revolver	$	750	November 2020	$	30	$	—	$	720
Canadian Revolver	C$	25	November 2017	C$	—	C$	10	C$	15
Accounts receivable sales facility	$	1,300	July 2018	$	100	n/a		$	1,200
Letter of credit facility	$	100	November 2017	n/a		$	—	$	100
Uncommitted facilities:
Letter of credit facilities	n/a		n/a	n/a		$	212	n/a

Letters of credit issued as of September 30, 2017 expire at various times in 2017 through 2020.

In June 2017, one of our committed letter of credit facilities with a borrowing capacity of $125 million expired and was not renewed.

As of September 30, 2017 and December 31, 2016, the borrowings on the VLP Revolver bear interest at a variable rate, which was 2.75 percent and 2.3125 percent, respectively. As of September 30, 2017 and December 31, 2016, the variable interest rate on the accounts receivable sales facility was 1.9124 percent and 1.3422 percent, respectively.

In October 2017, one of our Canadian subsidiaries amended its committed revolving credit facility (the Canadian Revolver) to increase the borrowing capacity from C$25 million to C$75 million under which it may borrow and obtain letters of credit and to extend the maturity date from November 2017 to November 2018.

In connection with VLP’s acquisitions of Parkway Pipeline LLC and Valero Partners Port Arthur, LLC, subsidiaries of ours that own certain pipeline and terminaling assets, VLP borrowed $118 million and $262 million, respectively, under the VLP Revolver on November 1, 2017. These borrowings bear interest at variable rates, which were 2.75 percent and 2.875 percent, respectively, as of November 1, 2017.

Other Disclosures

Interest and debt expense, net of capitalized interest is comprised of the following (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Interest and debt expense	$	134	$	129	$	402	$	387
Less capitalized interest	20		14		48		53
Interest and debt expense, net of capitalized interest	$	114	$	115	$	354	$	334

Capital Leases

In January 2017, we recognized capital lease assets and related obligations totaling approximately $490 million for the lease of storage tanks located at three of our refineries. These lease agreements have initial terms of 10 years each with successive 10-year automatic renewals.