Short-term Borrowings and Other Debt Obligations



(Dollars in millions)	June 30, 2017		December 31, 2016
Revolving credit facility	$	—	$	—
Other short-term bank loans	7		2
Total short-term borrowings	7		2
Current portion of long-term debt and term loan agreement	145		177
Short-term borrowings and current portion of long-term debt	$	152	$	179

Revolving Credit Agreement and Secured Term Loan Agreement

On April 17, 2017, we amended our revolving credit facility (the “Revolving Credit Agreement”) and our secured term loan agreement (the “Term Loan Agreement” and collectively with the Revolving Credit Agreement, the “Credit Agreements”). We modified the definition of consolidated adjusted earnings before interest, tax depreciation and amortization set forth in the Credit Agreements, as well as other definitional and covenant modifications, and reduced total commitments under the Revolving Credit Agreement from $1.38 billion to $1.199 billion. As of June 30, 2017, we had total commitments under the Revolving Credit Agreement of $1.199 billion and borrowings of $400 million under the Term Loan Agreement. At June 30, 2017, we had $1.1 billion available under the Credit Agreements, and there were $73 million in outstanding letters of credit.

For lenders that previously extended their commitments (“extending lenders”), the Revolving Credit Agreement matures in July of 2019. For lenders that did not extend their commitments (such lenders, representing $199 million, the “non-extending lenders”), the Revolving Credit Agreement matured in July of 2017, which will further reduce total commitments under the Revolving Credit Agreement to $1.0 billion in the third quarter of 2017. The Term Loan Agreement matures in July of 2020.

Loans under the Credit Agreements are subject to varying interest rates based on whether the loan is Eurodollar loan or an alternate base rate loan. We also incur a quarterly facility fee on the amount of the Revolving Credit Agreement. For the three months ended June 30, 2017, the interest rate for the Revolving Credit Agreement was LIBOR plus a margin rate of 2.80%. For the three months ended June 30, 2017, the interest rate for the Term Loan Agreement was LIBOR plus a margin rate of 2.30%.

Our Credit Agreements contain customary events of default, including our failure to comply with our financial covenants. We must maintain a leverage ratio of no greater than 2.5 to 1, a leverage and letters of credit ratio of no greater than 3.5 to 1 and an asset coverage ratio of at least 4.0 to 1. As of June 30, 2017, we were in compliance with these financial covenants.

Other Short-Term Borrowings and Other Debt Activity

On June 26, 2017, we issued an additional $250 million aggregate principal amount of our 9.875% senior notes due 2024 (“Notes”) and received proceeds, net of underwriting fees, of $251 million. These Notes were issued as additional securities under an indenture pursuant to which we previously issued $540 million aggregate principal amount of our 9.875% senior notes due 2024.

We have short-term borrowings with various domestic and international institutions pursuant to uncommitted credit facilities. At June 30, 2017, we had $7 million in short-term borrowings under these arrangements. In addition, we had $436 million of letters of credit under various uncommitted facilities, of which $69 million has been cash collateralized (included in “Cash and Cash Equivalents” in the accompanying Condensed Consolidated Balance Sheets), and $61 million of surety bonds, primarily performance bonds, issued by financial sureties against an indemnification from us at June 30, 2017.

In June 2017, we repaid $88 million of our 6.35% Senior Notes on the maturity date. At June 30, 2017, the current portion of long-term debt was primarily related to $66 million of our 6.00% Senior Notes due March 2018, the $50 million current portion of our Term Loan Agreement and $29 million of current portion of capital leases and other debt.