Debt

12 Months Ended

Dec. 31, 2020

Long-term debt includes debt instruments and finance lease obligations. The following table outlines the Company's outstanding long-term debt as at December 31, 2020:


(in millions of Canadian dollars except percentages)			Maturity	Currency in which payable	2020		2019
9.450%	30-year Debentures	(A)	Aug 2021	U.S.$	318		325
5.100%	10-year Medium Term Notes	(A)	Jan 2022	CDN$	125		125
4.500%	10-year Notes	(A)	Jan 2022	U.S.$	318		324
4.450%	12.5-year Notes	(A)	Mar 2023	U.S.$	445		454
2.900%	10-year Notes	(A)	Feb 2025	U.S.$	891		909
3.700%	10.5-year Notes	(A)	Feb 2026	U.S.$	318		324
4.000%	10-year Notes	(A)	Jun 2028	U.S.$	636		649
3.150%	10-year Notes	(A)	Mar 2029	CDN$	399		399
2.050%	10-year Notes	(A)	Mar 2030	U.S.$	636		—
7.125%	30-year Debentures	(A)	Oct 2031	U.S.$	446		454
5.750%	30-year Debentures	(A)	Mar 2033	U.S.$	312		318
4.800%	20-year Notes	(A)	Sep 2035	U.S.$	381		388
5.950%	30-year Notes	(A)	May 2037	U.S.$	567		578
6.450%	30-year Notes	(A)	Nov 2039	CDN$	400		400
5.750%	30-year Notes	(A)	Jan 2042	U.S.$	313		319
4.800%	30-year Notes	(A)	Aug 2045	U.S.$	698		712
3.050%	30-year Notes	(A)	Mar 2050	CDN$	298		—
6.125%	100-year Notes	(A)	Sep 2115	U.S.$	1,146		1,169
8.000%	5-year Promissory Notes	(B)	up to Jun 2020	U.S.$	—		11
5.41%	Senior Secured Notes	(C)	Mar 2024	U.S.$	89		100
6.91%	Secured Equipment Notes	(D)	Oct 2024	CDN$	75		91
7.49%	Equipment Trust Certificates	(E)	Jan 2021	U.S.$	14		55
Obligations under finance leases
1.99% -2.97%		(F)	2021 - 2023	CDN$/U.S.$	4		3
6.99%		(F)	Mar 2022	U.S.$	97		99
6.57%		(F)	Dec 2026	U.S.$	38		45
12.77%		(F)	Jan 2031	CDN$	4		4
Commercial Paper			up to Feb 2021	U.S.$	820		516
					9,788		8,771
Perpetual 4% Consolidated Debenture Stock		(G)		U.S.$	39		39
Perpetual 4% Consolidated Debenture Stock		(G)		G.B.£	6		6
					9,833		8,816
Unamortized fees on long-term debt					(62)		(59)
					9,771		8,757
Less: Long-term debt maturing within one year					1,186		599
					$	8,585	$	8,158

At December 31, 2020, the gross amount of long-term debt denominated in U.S. dollars was U.S. $6,713 million (2019 – U.S. $6,016 million).

Annual maturities and principal repayment requirements, excluding those pertaining to finance leases, for each of the five years following 2020 are (in millions): 2021 – $1,178; 2022 – $471; 2023 – $475; 2024 – $83; 2025 – $891.

Fees on long-term debt are amortized to income over the term of the related debt.

A. These debentures and notes are presented net of unamortized discounts, pay interest semi-annually, and are unsecured but carry a negative pledge.

In 2020, the Company issued U.S $500 million 2.050% 10-year Notes due March 5, 2030 for net proceeds of U.S. $495 million ($662 million) and $300 million 3.050% 30-year Notes due March 9, 2050 for net proceeds of $296 million.

In 2019, the Company repaid U.S. $350 million 7.250% 10-year Notes at maturity for a total of U.S. $350 million ($471 million). The Company also issued $400 million 3.150% 10-year Notes due March 13, 2029 for net proceeds of $397 million.

B. On December 30, 2019, through its business combination with CMQ Canada, the Company assumed CMQ Canada's obligations under the 8.00% 5-year Promissory Notes totalling U.S. $8 million ($11 million) owing to CMQ U.S (see Note 10). In 2020, these notes were settled.

C. The 5.41% Senior Secured Notes are collateralized by specific locomotive units with a carrying value of $97 million at December 31, 2020. The Company pays equal blended semi-annual payments of principal and interest. Final repayment of the remaining principal of U.S. $44 million is due in March 2024.

D. The 6.91% Secured Equipment Notes are full recourse obligations of the Company collateralized by a first charge on specific locomotive units with a carrying value of $54 million at December 31, 2020. The Company pays equal blended semi-annual payments of principal and interest. Final repayment of the remaining principal of $11 million is due in October 2024.

E. The 7.49% Equipment Trust Certificates are secured by specific locomotive units with a carrying value of $91 million at December 31, 2020. The Company makes semi-annual payments that vary in amount and are interest-only payments or blended principal and interest payments. Final repayment of the remaining principal of U.S. $11 million is due in January 2021.

F. The carrying value of the assets collateralizing finance lease obligations was $171 million at December 31, 2020.

G. The Consolidated Debenture Stock, authorized by an Act of Parliament of 1889, constitutes a first charge upon and over the whole of the undertaking, railways, works, rolling stock, plant, property and effects of the Company, with certain exceptions.

Credit facility

CP has a revolving credit facility (the “facility”) agreement with 14 highly rated financial institutions for a commitment amount of U.S. $1.3 billion, which consists of a U.S. $1.0 billion tranche maturing September 27, 2024 and a U.S. $300 million tranche maturing September 27, 2021. The facility can accommodate draws of cash and/or letters of credit at market competitive pricing. The agreement requires the Company to maintain a financial covenant in conjunction with the facility. As at December 31, 2020 and 2019, the Company was in compliance with all terms and conditions of the credit facility arrangements and satisfied the financial covenant. During the year ended December 31, 2020, the Company drew and fully repaid U.S. $100 million from the U.S. $300 million tranche of its revolving credit facility. As at December 31, 2020 and 2019, the facility was undrawn.

The Company also has a commercial paper program which enables it to issue commercial paper up to a maximum aggregate principal amount of U.S. $1.0 billion in the form of unsecured promissory notes. This commercial paper program is backed by the revolving credit facility. As at December 31, 2020, the Company had total commercial paper borrowings of U.S. $644 million ($820 million), included in "Long-term debt maturing within one year" on the Company's Consolidated Balance Sheets (December 31, 2019 – $516 million). The weighted-average interest rate on these borrowings was 0.27% (December 31, 2019 - 2.03%). The Company presents issuances and repayments of commercial paper, all of which have a maturity of less than 90 days, in the Company's Consolidated Statements of Cash Flows on a net basis.

CP has bilateral letter of credit facilities with six highly rated financial institutions to support its requirement to post letters of credit in the ordinary course of business. Under these agreements, the Company has the option to post collateral in the form of cash or cash equivalents, equal at least to the face value of the letter of credit issued. These agreements permit CP to withdraw amounts posted as collateral at any time; therefore, the amounts posted as collateral are presented as “Cash and cash equivalents” on the Company’s Consolidated Balance Sheets. As at December 31, 2020 and 2019, the Company did not have any collateral posted on its bilateral letter of credit facilities but had letters of credit drawn of $59 million (December 31, 2019 – $80 million) from a total available amount of $300 million (December 31, 2019 – $300 million).