Debt

9 Months Ended

Sep. 30, 2020

The following table presents the Partnership’s outstanding debt.


	September 30, 2020						December 31, 2019
	Outstanding Principal		Discount (1)		Total Debt		Outstanding Principal		Premium (Discount) (1)		Total Debt

	(In millions)
Commercial Paper	$	334	$	—	$	334	$	155	$	—	$	155
Revolving Credit Facility	—		—		—		—		—		—
2019 Term Loan Agreement	800		—		800		800		—		800
2024 Notes	600		—		600		600		—		600
2027 Notes	700		(2)		698		700		(2)		698
2028 Notes	800		(5)		795		800		(5)		795
2029 Notes	547		(1)		546		550		(1)		549
2044 Notes	531		—		531		550		—		550
EOIT Senior Notes	—		—		—		250		1		251
Total debt	$	4,312	$	(8)	$	4,304	$	4,405	$	(7)	$	4,398
Less: Short-term debt (2)					334						155
Less: Current portion of long-term debt (3)					—						251
Less: Unamortized debt expense (4)					20						23
Total long-term debt					$	3,950					$	3,969

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(1)Unamortized premium (discount) on long-term debt is amortized over the life of the respective debt.

(2)Short-term debt includes $334 million and $155 million of outstanding commercial paper as of September 30, 2020 and December 31, 2019, respectively.

(3)As of December 31, 2019, Current portion of long-term debt included $251 million outstanding balance of the EOIT Senior Notes which were repaid in March 2020.

(4)As of September 30, 2020 and December 31, 2019, there was an additional $3 million and $4 million, respectively, of unamortized debt expense related to the Revolving Credit Facility included in Other assets, not included above.

Commercial Paper

The Partnership has a commercial paper program, pursuant to which the Partnership is authorized to issue up to $1.4 billion of commercial paper. The commercial paper program is supported by our Revolving Credit Facility, and outstanding commercial paper effectively reduces our borrowing capacity thereunder. There were $334 million and $155 million outstanding under our commercial paper program at September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the weighted average interest rate for the outstanding commercial paper was 0.77%.

Revolving Credit Facility

The Partnership’s Revolving Credit Facility is a $1.75 billion, five-year senior unsecured revolving credit facility, which under certain circumstances may be increased from time to time up to an additional $875 million. The Revolving Credit Facility is scheduled to mature on April 6, 2023, subject to an extension option, which could be exercised two times to extend the term of the Revolving Credit Facility, in each case, for an additional one-year term. As of September 30, 2020, there were zero principal advances, $3 million in letters of credit outstanding and our available borrowing capacity was approximately $775 million under our Revolving Credit Facility.

The Revolving Credit Facility provides that outstanding borrowings bear interest at the LIBOR and/or an alternate base rate, at the Partnership’s election, plus an applicable margin. The applicable margin is based on the Partnership’s designated credit ratings from S&P, Moody’s and Fitch Ratings. As of September 30, 2020, the applicable margin for LIBOR-based borrowings under the Revolving Credit Facility was 1.50% based on the Partnership’s credit ratings. In addition, the Revolving Credit Facility requires the Partnership to pay a fee on unused commitments. The commitment fee is based on the Partnership’s credit ratings. As of September 30, 2020, the commitment fee under the restated Revolving Credit Facility was 0.20% per annum based on the Partnership’s credit ratings. The commitment fee is recorded as interest expense in the Partnership’s Condensed Consolidated Statements of Income.

2019 Term Loan Agreement

On January 29, 2019, the Partnership entered into an unsecured term loan agreement with Bank of America, N.A., as administrative agent, and the several lenders thereto. As of September 30, 2020, there was $800 million outstanding under the 2019 Term Loan Agreement. The 2019 Term Loan Agreement has a scheduled maturity date of January 29, 2022, but contains an option, which may be exercised up to two times, to extend the maturity date for an additional one-year term. The 2019 Term Loan Agreement provides that outstanding borrowings bear interest at the eurodollar rate and/or an alternate base rate, at the Partnership’s election, plus an applicable margin. The applicable margin is based on the Partnership’s credit ratings. The applicable margin shall equal, (1) in the case of interest rates determined by reference to the eurodollar rate, between 0.75% and 1.50% per annum and (2) in the case of interest rates determined by reference to the alternate base rate, between 0% and 0.50% per annum. As of September 30, 2020, the applicable margin for LIBOR-based advances under the 2019 Term Loan Facility was 1.25% based on the Partnership’s credit ratings. As of September 30, 2020, the weighted average interest rate of the 2019 Term Loan Agreement was 2.11%, including the impact of the associated interest rate derivatives designated as hedging instruments for accounting purposes.

Senior Notes

As of September 30, 2020, the Partnership’s debt included the 2024 Notes, 2027 Notes, 2028 Notes, 2029 Notes and 2044 Notes, which had $8 million of unamortized discount and $20 million of unamortized debt expense at September 30, 2020, resulting in effective interest rates of 4.01%, 4.56%, 5.19%, 4.29% and 4.99%, respectively, during the nine months ended September 30, 2020. In March 2020, the Partnership’s EOIT Senior Notes matured and were paid using proceeds from the Revolving Credit Facility.

During the nine months ended September 30, 2020, the Partnership repurchased $22 million aggregate principal amount of the 2029 Notes and 2044 Notes in open market transactions for approximately $17 million plus accrued interest, which resulted in a $5 million gain on extinguishment of debt. The gain is included in Other, net in the Condensed Consolidated Statements of Income.

As of September 30, 2020, the Partnership was in compliance with all of its debt agreements, including financial covenants.