NOTE 5 DEBT AND CREDIT FACILITIES

(unaudited) (millions of dollars)	September 30, 2017	Weighted Average Interest Rate for the Nine Months Ended September 30, 2017		December 31, 2016 (a)	Weighted Average Interest Rate for the Year Ended December 31, 2016

TC PipeLines, LP
Senior Credit Facility due 2021	255	2.34	%	160	1.72	%
2013 Term Loan Facility due October 2022	500	2.26	%	500	1.73	%
2015 Term Loan Facility due October 2020	170	2.15	%	170	1.63	%
4.65% Unsecured Senior Notes due 2021	350	4.65	%(b)	350	4.65	%(b)
4.375% Unsecured Senior Notes due 2025	350	4.375	%(b)	350	4.375	%(b)
3.90 % Unsecured Senior Notes due 2027	500	3.90	%(b)	—	—
GTN
5.29% Unsecured Senior Notes due 2020	100	5.29	%(b)	100	5.29	%(b)
5.69% Unsecured Senior Notes due 2035	150	5.69	%(b)	150	5.69	%(b)
Unsecured Term Loan Facility due 2019	55	1.95	%	65	1.43	%
PNGTS
5.90% Senior Secured Notes due December 2018	36	5.90	%(b)	53	5.90	%(b)
Tuscarora
Unsecured Term Loan due 2020	25	2.18	%	10	1.64	%
3.82% Series D Senior Notes due August 2017	—	3.82	%(b)	12	3.82	%(b)

	2,491			1,920
Less: unamortized debt issuance costs and debt discount	13			9
Less: current portion	51			52

	2,427			1,859

(a)

Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6).

(b)

Fixed interest rate

TC Pipelines, LP

The Partnership’s Senior Credit Facility consists of a $500 million senior revolving credit facility with a banking syndicate, maturing November 10, 2021, under which $255 million was outstanding at September 30, 2017 (December 31, 2016 - $160 million), leaving $245 million available for future borrowing. The LIBOR-based interest rate on the Senior Credit Facility was 2.49 percent at September 30, 2017 (December 31, 2016 — 1.92 percent).

On September 29, 2017, the Partnership’s 2013 Term Loan Facility that was due on July 1, 2018 was amended to extend the maturity period through October 2, 2022. As of September 30, 2017, the variable interest rate exposure related to the 2013 Term Loan Facility was hedged by fixed interest rate swap arrangements and our effective interest rate was 2.31 percent (December 31, 2016 — 2.31 percent). Prior to hedging activities, the LIBOR-based interest rate on the 2013 Term Loan Facility was 2.49 percent at September 30, 2017 (December 31, 2016 — 1.87 percent).

On September 29, 2017, the Partnership’s 2015 Term Loan Facility that was due on October 1, 2018 was amended to extend the maturity period through October 1, 2020. The LIBOR-based interest rate on the 2015 Term Loan Facility was 2.39 percent at September 30, 2017 (December 31, 2016 — 1.77 percent).

The 2013 Term Loan Facility and the 2015 Term Loan Facility (collectively, the Term Loan Facilities) and the Senior Credit Facility require the Partnership to maintain a certain leverage ratio (debt to adjusted cash flow [net income plus cash distributions received, extraordinary losses, interest expense, expense for taxes paid or accrued, and depreciation and amortization expense less equity earnings and extraordinary gains]) no greater than 5.00 to 1.00 for each fiscal quarter, except for the fiscal quarter and the two following fiscal quarters in which one or more acquisitions has been executed, in which case the leverage ratio is to be no greater than 5.50 to 1.00. The leverage ratio was 4.76 to 1.00 as of September 30, 2017.

On May 25, 2017, the Partnership closed a $500 million public offering of senior unsecured notes bearing an interest rate of 3.90 percent maturing May 25, 2027. The net proceeds of $497 million were used to fund a portion of the 2017 Acquisition (Refer to Note 6). The indenture for the notes contains customary investment grade covenants.

PNGTS

PNGTS’ Senior Secured Notes are secured by the PNGTS long-term firm shipper contracts and its partners’ pledge of their equity and a guarantee of debt service for six months. PNGTS is restricted under the terms of its note purchase agreement from making cash distributions unless certain conditions are met. Before a distribution can be made, the debt service reserve account must be fully funded and PNGTS’ debt service coverage ratio for the preceding and succeeding twelve months must be 1.30 or greater. At September 30, 2017, the debt service coverage ratio was 1.71 for the twelve preceding months and 5.31 for the twelve succeeding months. Therefore, PNGTS was not restricted to make any cash distributions.

GTN

GTN’s Unsecured Senior Notes, along with GTN’s Unsecured Term Loan Facility contain a covenant that limits total debt to no greater than 70 percent of GTN’s total capitalization. GTN’s total debt to total capitalization ratio at September 30, 2017 was 44.2 percent. The LIBOR-based interest rate on the GTN’s Unsecured Term Loan Facility was 2.19 percent at September 30, 2017 (December 31, 2016 — 1.57 percent).

Tuscarora

On August 21, 2017, Tuscarora refinanced all of its outstanding debt by amending its existing Unsecured Term Loan Facility and issuing a new $25 million variable rate term loan that will require yearly principal payments and will mature on August 21, 2020. Tuscarora’s Unsecured Term Loan contains a covenant that requires Tuscarora to maintain a debt service coverage ratio (cash available from operations divided by a sum of interest expense and principal payments) of greater than or equal to 3.00 to 1.00. As of September 30, 2017, the ratio was 3.08 to 1.00.

The LIBOR-based interest rate on the Tuscarora’s Unsecured Term Loan Facility was 2.36 percent at September 30, 2017 (December 31, 2016 — 1.90 percent).

At September 30, 2017, the Partnership was in compliance with its financial covenants, in addition to the other covenants which include restrictions on entering into mergers, consolidations and sales of assets, granting liens, material amendments to the Third Amended and Restated Agreement of Limited Partnership (Partnership Agreement), incurring additional debt and distributions to unitholders.

The principal repayments required of the Partnership on its debt are as follows:

(unaudited)
(millions of dollars)

2017		12
2018		45
2019		36
2020		293
2021		605
Thereafter		1,500

		2,491