10. DEBT AND INTEREST EXPENSE

The following table presents WES and WGP’s outstanding debt:



	September 30, 2018						December 31, 2017
thousands	Principal		Carrying Value		Fair Value ⁽¹⁾		Principal		Carrying Value		Fair Value ⁽¹⁾
Short-term debt
WGP RCF	$	28,000	$	28,000	$	28,000	$	—	$	—	$	—

WGP long-term debt
WGP RCF	$	—	$	—	$	—	$	28,000	$	28,000	$	28,000
WES long-term debt
2.600% Senior Notes due 2018	—		—		—		350,000		349,684		350,631
5.375% Senior Notes due 2021	500,000		496,669		517,160		500,000		495,815		530,647
4.000% Senior Notes due 2022	670,000		669,020		668,198		670,000		668,849		684,043
3.950% Senior Notes due 2025	500,000		492,596		478,470		500,000		491,885		500,885
4.650% Senior Notes due 2026	500,000		495,592		492,502		500,000		495,245		520,144
4.500% Senior Notes due 2028	400,000		394,514		384,964		—		—		—
4.750% Senior Notes due 2028	400,000		395,806		391,532		—		—		—
5.450% Senior Notes due 2044	600,000		593,319		565,485		600,000		593,234		637,827
5.300% Senior Notes due 2048	700,000		686,601		645,643		—		—		—
5.500% Senior Notes due 2048	350,000		342,347		331,981		—		—		—
WES RCF	—		—		—		370,000		370,000		370,000
Total long-term debt	$	4,620,000	$	4,566,464	$	4,475,935	$	3,518,000	$	3,492,712	$	3,622,177


⁽¹⁾	Fair value is measured using the market approach and Level 2 inputs.

10. DEBT AND INTEREST EXPENSE (CONTINUED)

Debt activity. The following table presents WES and WGP’s debt activity for the nine months ended September 30, 2018:



thousands	Carrying Value
Balance at December 31, 2017	$	3,492,712
WES RCF borrowings	320,000
Issuance of 4.500% Senior Notes due 2028	400,000
Issuance of 5.300% Senior Notes due 2048	700,000
Issuance of 4.750% Senior Notes due 2028	400,000
Issuance of 5.500% Senior Notes due 2048	350,000
Repayment of 2.600% Senior Notes due 2018	(350,000		)
Repayments of WES RCF borrowings	(690,000		)
Other	(28,248		)
Balance at September 30, 2018	$	4,594,464

WGP RCF. In February 2018, WGP voluntarily reduced the aggregate commitments of the lenders under the WGP RCF, which matures in March 2019, to $35.0 million. As of September 30, 2018, the outstanding borrowings under the WGP RCF were classified as short-term debt on the consolidated balance sheet.

As of September 30, 2018, WGP had $28.0 million of outstanding borrowings and $7.0 million available for borrowing under the WGP RCF. As of September 30, 2018 and 2017, the interest rate on the outstanding WGP RCF borrowings was 4.25% and 3.24%, respectively. The commitment fee rate was 0.30% at September 30, 2018 and 2017. At September 30, 2018, WGP was in compliance with all covenants under the WGP RCF.

WES Senior Notes. In August 2018, the 4.750% Senior Notes due 2028 and 5.500% Senior Notes due 2048 were offered to the public at prices of 99.818% and 98.912%, respectively, of the face amount. Including the effects of the issuance and underwriting discounts, the effective interest rates of the senior notes are 4.885% and 5.652%, respectively. Interest is paid on each such series semi-annually on February 15 and August 15 of each year, beginning February 15, 2019. The net proceeds were used to repay the maturing 2.600% Senior Notes due August 2018, repay amounts outstanding under the WES RCF and for WES’s general partnership purposes, including to fund capital expenditures.

In March 2018, the 4.500% Senior Notes due 2028 and 5.300% Senior Notes due 2048 were offered to the public at prices of 99.435% and 99.169%, respectively, of the face amount. Including the effects of the issuance and underwriting discounts, the effective interest rates of the senior notes are 4.682% and 5.431%, respectively. Interest is paid on each such series semi-annually on March 1 and September 1 of each year, beginning September 1, 2018. The net proceeds were used to repay amounts outstanding under the WES RCF and for WES’s general partnership purposes, including to fund capital expenditures.

At September 30, 2018, WES was in compliance with all covenants under the indentures governing its outstanding notes.

WES RCF. In February 2018, WES entered into the five-year $1.5 billion WES RCF by amending and restating the $1.2 billion credit facility that was originally entered into in February 2014. The WES RCF is expandable to a maximum of $2.0 billion, matures in February 2023, with options to extend maturity by up to two additional one year increments, and bears interest at the London Interbank Offered Rate (“LIBOR”), plus applicable margins ranging from 1.00% to 1.50%, or an alternate base rate equal to the greatest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.50%, or (c) LIBOR plus 1.00%, in each case plus applicable margins currently ranging from zero to 0.50%, based upon WES’s senior unsecured debt rating. WES is required to pay a quarterly facility fee ranging from 0.125% to 0.250% of the commitment amount (whether used or unused), also based upon its senior unsecured debt rating.

As of September 30, 2018, WES had no outstanding borrowings and $4.6 million in outstanding letters of credit, resulting in $1,495.4 million available borrowing capacity under the WES RCF. As of September 30, 2018 and 2017, the interest rate on any outstanding WES RCF borrowings was 3.56% and 2.54%, respectively. The facility fee rate was 0.20% at September 30, 2018 and 2017. At September 30, 2018, WES was in compliance with all covenants under the WES RCF.

10. DEBT AND INTEREST EXPENSE (CONTINUED)

Interest expense. The following table summarizes the amounts included in interest expense:



	Three Months Ended September 30,						Nine Months Ended September 30,
thousands	2018			2017			2018			2017
Third parties
Long-term and short-term debt	$	(53,229	)	$	(36,223	)	$	(143,436	)	$	(106,412	)
Amortization of debt issuance costs and commitment fees	(2,054		)	(2,009		)	(6,955		)	(5,955		)
Capitalized interest	6,967			2,115			17,032			3,991
Total interest expense – third parties	(48,316		)	(36,117		)	(133,359		)	(108,376		)
Affiliates
Deferred purchase price obligation – Anadarko ⁽¹⁾	—			—			—			(71		)
Total interest expense – affiliates	—			—			—			(71		)
Interest expense	$	(48,316	)	$	(36,117	)	$	(133,359	)	$	(108,447	)


⁽¹⁾	See Note 3 for a discussion of the Deferred purchase price obligation - Anadarko.