Short-Term Borrowings and Other Debt Obligations



(Dollars in millions)	March 31, 2019		December 31, 2018
364-Day Credit Agreement	$	317	$	317
A&R Credit Agreement	230		—
Other Short-term Loans	7		9
Current Portion of Long-term Debt	58		57
Short-term Borrowings and Current Portion of Long-term Debt	$	612	$	383

Revolving Credit Agreements and Term Loan Agreement

At March 31, 2019, we have two revolving credit agreements with total commitments of $846 million, comprised of an unsecured senior revolving credit agreement (the “A&R Credit Agreement”) in the amount of $529 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 March 31, 2019, we have principal borrowings of $298 million under the Term Loan Agreement. We collectively refer to our Revolving Credit Agreements and Term Loan Agreement as the “Credit Agreements.” See “Note 20 – Subsequent Events” for additional details regarding the proposed RSA, the DIP Facilities and the expected capital restructuring transaction.

Under the terms of the A&R Credit Agreement, commitments of $226 million from non-extending lenders will mature on July 12, 2019 and commitments of $303 million from extending lenders will mature on July 13, 2020.

At March 31, 2019, we had total borrowing availability of $93 million available under our Credit Agreements. The following tables summarizes borrowing capacity utilization and availability of our Credit Agreements:



(Dollars in millions)	March 31, 2019
Facilities	$	1,144
Less uses of facilities:
364-Day Credit Agreement	317
A&R Credit Agreement	230
Letters of Credit	206
Term Loan Agreement Principal Borrowing	298
Borrowing Availability	$	93

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 March 31, 2019, the interest rate for the A&R Credit Agreement was LIBOR plus a margin rate of 2.68% for extending lenders and LIBOR plus a margin rate of 1.93% for non-extending lenders. For the three months ended March 31, 2019, the interest rate for borrowings under our Term Loan Agreement and 364-Day Credit Agreement were LIBOR plus a margin rate of 1.43% and LIBOR plus a margin rate of 2.18%, respectively.

Our Credit Agreements contain customary events of default, including in the event of our failure to comply with our financial covenants. We must also 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. 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. As of March 31, 2019, we were in compliance with these financial covenants.

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 Short-term Borrowings and Debt Activity

We have short-term borrowings with various domestic and international institutions pursuant to uncommitted credit facilities. At March 31, 2019, we had $7 million in short-term borrowings under these arrangements. In addition, we had $271 million of letters of credit under various uncommitted facilities and $206 million of letters of credit under the A&R Credit Agreement. At March 31, 2019, we have cash collateralized $98 million of our letters of credit, which is included “Cash and Cash Equivalents” in the accompanying Condensed Consolidated Balance Sheets.

Fair Value of Short and Long-term Borrowings

The carrying value of our short-term borrowings approximates their fair value due to their short maturities. These short-term borrowings are classified as Level 2 in the fair value hierarchy.

The fair value of our long-term debt fluctuates with changes in applicable interest rates among other factors. Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued and will be less than the carrying value when the market rate is greater than the interest rate at which the debt was originally issued. The fair value of our long-term debt is classified as Level 2 in the fair value hierarchy and is established based on observable inputs in less active markets. The discussion on fair value is continued at “Note 10 – Fair Value of Financial Instruments, Assets and Other Assets.” The fair value and carrying value of our senior notes were as follows:



(Dollars in millions)	March 31, 2019		December 31, 2018
Fair Value	$	5,310	$	4,455
Carrying Value	7,295		7,285