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Debt

9 Months Ended

Sep. 30, 2019

Public Debt

During the nine months ended September 30, 2019, the following activity occurred:

•

We issued $1.0 billion of 4.00 percent Senior Notes due April 1, 2029 (4.00 percent Senior Notes). Proceeds from this debt issuance totaled $992 million before deducting the underwriting discount and other debt issuance costs. The proceeds were used to redeem our 6.125 percent Senior Notes due February 1, 2020 (6.125 percent Senior Notes) for $871 million, or 102.48 percent of stated value, which includes an early redemption fee of $21 million that is reflected in “other income, net” in our statement of income for the nine months ended September 30, 2019.


•	In connection with the completion of the Merger Transaction as described in Note 2, Valero entered into a guarantee agreement to fully and unconditionally guarantee the prompt payment, when due, of any amount owed to the holders of VLP’s 4.375 percent Senior Notes due December 15, 2026 and 4.5 percent Senior Notes due March 15, 2028. See Note 15 for condensed consolidating financial statements.

During the nine months ended September 30, 2018, the following activity occurred:


•	We issued $750 million of 4.35 percent Senior Notes due June 1, 2028. Proceeds from this debt issuance totaled $749 million before deducting the underwriting discount and other debt issuance

costs. The proceeds were used to redeem our 9.375 percent Senior Notes due March 15, 2019 (9.375 percent Senior Notes) for $787 million, or 104.9 percent of stated value, which included an early redemption fee of $37 million that is reflected in “other income, net” in our statement of income for the nine months ended September 30, 2018.

•

VLP issued $500 million of 4.5 percent Senior Notes due March 15, 2028. Proceeds from this debt issuance totaled $498 million before deducting the underwriting discount and other debt issuance costs. The proceeds were available only to the operations of VLP and were used to repay the outstanding balance of $410 million on the VLP Revolver (defined below) and $85 million of VLP’s notes payable to us, which were eliminated in consolidation.

Other Debt

During the nine months ended September 30, 2018, we retired $137 million of debt assumed in connection with the Peru Acquisition with available cash on hand.

Credit Facilities

Summary of Credit Facilities

We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted):



				September 30, 2019
	Facility Amount		Maturity Date	Outstanding Borrowings		Letters of Credit Issued (a)		Availability
Committed facilities:
Valero Revolver	$	4,000	March 2024	$	—	$	34	$	3,966
Canadian Revolver (b)	C$	150	November 2019	C$	—	C$	5	C$	145
Accounts receivable sales facility	$	1,300	July 2020	$	100	n/a		$	1,200
Letter of credit facility (c)	$	100	November 2019	n/a		$	—	$	100
Committed facilities of VIE (d):
IEnova Revolver	$	340	February 2028	$	257	n/a		$	83
Uncommitted facilities:
Letter of credit facilities	n/a		n/a	n/a		$	129	n/a

____________


(a)	Letters of credit issued as of September 30, 2019 expire at various times in 2019 through 2020.


(b)	The Canadian Revolver was amended in November 2019 to extend the maturity date from November 2019 to November 2020.


(c)	The letter of credit facility was amended in November 2019 to reduce the facility from $100 million to $50 million and to extend the maturity date from November 2019 to November 2020.


(d)	Creditors of our VIE do not have recourse against us.

Valero Revolver

In March 2019, we amended our revolving credit facility (the Valero Revolver) to increase the borrowing capacity from $3 billion to $4 billion and to extend the maturity date from November 2020 to March 2024. The Valero Revolver also provides for the issuance of letters of credit of up to $2.4 billion.

VLP Revolver

As of December 31, 2018, VLP had a $750 million senior unsecured revolving credit facility (the VLP Revolver) with a group of lenders that was scheduled to mature in November 2020. However, on January 10, 2019, in connection with the completion of the Merger Transaction as described in Note 2, the VLP Revolver was terminated.

Accounts Receivable Sales Facility

During the nine months ended September 30, 2019, we sold and repaid $900 million of eligible receivables under our accounts receivable sales facility. As of September 30, 2019 and December 31, 2018, the variable interest rate on the accounts receivable sales facility was 2.7836 percent and 3.0618 percent, respectively.

IEnova Revolver

During the nine months ended September 30, 2019 and 2018, Central Mexico Terminals (as described in Note 8) borrowed $148 million and $71 million, respectively, and had no repayments under a combined $340 million unsecured revolving credit facility (IEnova Revolver) with IEnova (defined in Note 8). As of September 30, 2019 and December 31, 2018, the variable interest rate was 5.969 percent and 6.046 percent, respectively.

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,
	2019		2018		2019		2018
Interest and debt expense	$	133	$	134	$	405	$	417
Less capitalized interest	22		23		70		61
Interest and debt expense, net of capitalized interest	$	111	$	111	$	335	$	356