Short-Term Borrowings and Other Debt Obligations



(Dollars in millions)	September 30, 2018		December 31, 2017
364-Day Credit Agreement	$	317	$	—
A&R Credit Agreement	—		—
Other Short-term Loans	18		11
Current Portion of Long-term Debt	61		137
Short-term Borrowings and Current Portion of Long-term Debt	$	396	$	148

Revolving Credit Agreements and Term Loan Agreement

On August 16, 2018, we amended and restated our existing Revolving Credit Agreement, entered into a Secured Second Lien 364-Day Revolving Credit Agreement and amended certain terms of our existing Term Loan Agreement. At September 30, 2018, we have two revolving credit agreements with total commitments of $900 million, comprised of an unsecured senior revolving credit agreement (the “A&R Credit Agreement”) in the amount of $583 million, and a Secured Second Lien 364-Day Revolving Credit Agreement (the “364-Day Credit Agreement” and, together with the A&R Credit Agreement, the “Revolving Credit Agreements”) in the amount of $317 million. At September 30, 2018, we have principal borrowings of $338 million under the Term Loan Agreement. We collectively refer to our Revolving Credit Agreements and Term Loan Agreement as the “Credit Agreements.”

Under the terms of the A&R Credit Agreement, commitments of $226 million from non-extending lenders (“non-extending lenders”) will mature on July 12, 2019 and commitments of $357 million from extending lenders (“extending lenders”) will mature on July 13, 2020. Commitments from our extending lenders will reduce by $54 million on November 14, 2018. The 364-Day Credit Agreement matures on August 15, 2019.

The A&R Credit Agreement and Term Loan Agreement were amended to permit the debt and the liens to be incurred under the 364-Day Credit Agreement and to make other modifications related to factoring of receivables, senior borrowings, permitted liens, and covenants.

At September 30, 2018, we had total borrowing availability of $378 million available under our Credit Agreements. The following tables summarizes our Credit Agreements borrowing capacity utilization and availability:



(Dollars in millions)	September 30, 2018
Facilities	$	1,238
Less uses of facilities:
364-Day Credit Agreement	317
A&R Credit Agreement	—
Letters of Credit	205
Term Loan Principal Borrowing	338
Borrowing Availability	$	378

Loans under the Credit Agreements are subject to varying interest rates based on whether the loan is a Eurodollar or alternate base rate loan. We also incur a quarterly facility fee on the amount of the A&R Credit Agreement. For the three months ended September 30, 2018, the interest rate for the A&R Credit Agreement was LIBOR plus a margin rate of 3.55% for extending lenders and LIBOR plus a margin rate of 2.80% for non-extending lenders. For the three months ended September 30, 2018, the interest rate for borrowings under our Term Loan Agreement and 364-Day Credit Agreement were LIBOR plus a margin rate of 2.30% and LIBOR plus a margin rate of 3.05%, respectively.

Our Credit Agreements contain customary events of default, including in the event of 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 an asset coverage ratio of at least 4.0 to 1 and a current asset coverage ratio of at least 1.5 to 1, in each case with the terms and definitions for the ratios as provided in the Credit Agreements. Subsequent to September 30, 2018, we must maintain a current asset coverage ratio of at least 2.1 to 1. The Term Loan Agreement and 364-Day Credit Agreement require us to pledge assets as collateral in order to borrow under the credit facility. At September 30, 2018, we were in compliance with these financial covenants. For additional information on our credit agreement covenants, please see “Note 12 – Short-term Borrowings and Other Debt Obligations” to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017 and the credit agreements filed on Form 8-K on August 20, 2018.

Senior Notes and Tender Offers

In February 2018, we issued $600 million in aggregate principal amount of our 9.875% senior notes due 2025. We used part of the proceeds from our debt offering to repay in full our 6.00% senior notes due March 2018 and to fund a concurrent tender offer to purchase for cash any and all of our 9.625% senior notes due 2019. We settled the tender offer in cash for the amount of $475 million, retiring an aggregate face value of $425 million and accrued interest of $20 million. In April 2018, we repaid the remaining principal outstanding on an early redemption of the bond. We recognized a cumulative loss of $34 million on these transactions in “Bond Tender and Call Premium” on the accompanying Condensed Consolidated Statements of Operations.

Other Borrowings and Debt Activity

We have short-term borrowings with various domestic and international institutions pursuant to uncommitted credit facilities. At September 30, 2018, we had $18 million in short-term borrowings under these arrangements. In addition, we had $326 million of letters of credit under various uncommitted facilities and $205 million of letters of credit under the A&R Credit Agreement. At September 30, 2018, we have cash collateralized $93 million of our letters of credit, which is included “Cash and Cash Equivalents” in the accompanying Condensed Consolidated Balance Sheets. We have $9 million of surety bonds, primarily performance bonds, issued by financial sureties against an indemnification from us at September 30, 2018.