Debt & Non-recourse Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt & Non-recourse Debt

Note 11: Debt & Non-recourse Debt

Debt

The following table details our outstanding debt balance and its associated interest rates:

	September 30,			December 31,
($ in millions)	2019			2018
Debt(1)
Senior secured credit facilities:
Term loan with an average rate of 3.766%, due 2023	$	190		$	197
Revolver with an average rate of 3.766%, due 2023		305			115
Senior notes with a rate of 6.125%, due 2024		300			300
Other debt		27			—
		822			612
Less: unamortized deferred financing costs and discount(2)(3)		(7	)		(8	)
	$	815		$	604

⁽¹⁾ As of September 30, 2019 and December 31, 2018, weighted-average interest rates were 4.739 percent and 5.170 percent, respectively.

⁽²⁾ Amount includes deferred financing costs related to our term loan and senior notes of $2 million and $5 million, respectively, as of September 30, 2019 and $2 million and $6 million as of December 31, 2018.

⁽³⁾ Amount does not include deferred financing costs of $5 million as of September 30, 2019 and $6 million as of December 31, 2018, relating to our revolving facility included in Other Assets in our condensed consolidated balance sheets.

During the nine months ended September 30, 2019, we borrowed $455 million and repaid $272 million (including recurring payments) under the senior secured credit facilities with an interest rate based on one month LIBOR plus 1.75 percent.  

As of September 30, 2019 and December 31, 2018, we had $1 million of outstanding letters of credit under the revolving credit facility.  We were in compliance with all applicable financial covenants as of September 30, 2019.

Non-recourse Debt

The following table details our outstanding non-recourse debt balance and its associated interest rates:

	September 30,			December 31,
($ in millions)	2019			2018
Non-recourse debt(1)
Timeshare Facility with an average rate of 3.164%, due 2021	$	—		$	120
Securitized Debt with a rate of 2.280%, due 2026		—			33
Securitized Debt with an average rate of 1.810%, due 2026		52			74
Securitized Debt with an average rate of 2.711%, due 2028		162			206
Securitized Debt with an average rate of 3.602%, due 2032		293			333
Securitized Debt with an average rate of 2.431%, due 2033		297			—
		804			766
Less: unamortized deferred financing costs(2)		(9	)		(7	)
	$	795		$	759

⁽¹⁾ As of September 30, 2019 and year ended December 31, 2018, weighted-average interest rates were 2.874 percent and 3.126 percent, respectively.

⁽²⁾ Amount relates to securitized debt only and does not include deferred financing costs of $3 million as of September 30, 2019 and December 31, 2018 relating to our Timeshare Facility which are included in Other Assets in our condensed consolidated balance sheets.

In August 2019, we completed a securitization of $300 million of gross timeshare financing receivables and issued approximately $216 million of 2.34 percent notes, $50 million of 2.54 percent notes and $34 million of 2.84 percent notes due July 2033. The Securitized Debt is backed by pledged assets, consisting primarily of a pool of timeshare financing receivables secured by first mortgages or deeds of trust on timeshare interest and temporarily by a $21 million cash deposit, which is reflected as Restricted cash in our condensed consolidated balance sheets. The Securitized Debt is a non-recourse obligation and is payable solely from the pool of timeshare financing receivables pledged as collateral to the debt. The proceeds were primarily used to pay down the remaining borrowings on our Timeshare Facility and our Securitized Debt with a rate of 2.280%, due 2026 (“2013-A”) and general corporate operating expenses. In connection with the securitization, we incurred $4 million in debt issuance costs.

In September 2019, we exercised our call option on the remaining outstanding principal balance on our 2013-A Notes and prepaid the remaining balance in accordance with the terms of the arrangement. Collateral securing the notes will be pledged as a part of the collateral backing the 2019-A Notes offering in place of the $21 million of cash used as collateral as a part of our 2019 securitization.  

The Timeshare Facility is a non-recourse obligation with a borrowing capacity of $450 million and is payable solely from the pool of timeshare financing receivables pledged as collateral and related assets. In April 2019, we amended the Timeshare Facility, extending the end of the commitment period, from March 2020 to April 2021, and certain covenants.  In September 2019, we amended the Timeshare Facility, temporarily changing certain covenant requirements. All other terms and borrowing capacity remained the same in both amendments. 

We are required to deposit payments received from customers on the timeshare financing receivables securing the Timeshare Facility and Securitized Debt into depository accounts maintained by third parties. On a monthly basis, the depository accounts are utilized to make required principal, interest and other payments due under the respective loan agreements. The balances in the depository accounts were $29 million and $27 million as of September 30, 2019 and December 31, 2018, respectively, and were included in Restricted cash in our condensed consolidated balance sheets.

Debt Maturities

The contractual maturities of our debt and non-recourse debt as of September 30, 2019 were as follows:

($ in millions)	Debt		Non-recourse Debt		Total
Year
2019 (remaining)	$	3	$	51	$	54
2020		12		247		259
2021		11		155		166
2022		10		110		120
2023		463		108		571
Thereafter		323		133		456
	$	822	$	804	$	1,626