Short-Term Borrowings, Long-Term Debt and Available Credit Facilities

3 Months Ended

Mar. 31, 2020

SHORT-TERM BORROWINGS, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES

The following tables summarize Corteva's short-term borrowings and finance lease obligations and long-term debt:



Short-term borrowings and finance lease obligations
(In millions)	March 31, 2020		December 31, 2019		March 31, 2019
Commercial paper	$	1,918	$	—	$	2,587
Repurchase facility	30		—		19
Other loans - various currencies	45		2		80
Long-term debt payable within one year	1		1		479
Finance lease obligations payable within one year	2		4		36
Total short-term borrowings and finance lease obligations	$	1,996	$	7	$	3,201

The estimated fair value of the company's short-term borrowings, including interest rate financial instruments, was determined using Level 2 inputs within the fair value hierarchy. Based on quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's short-term borrowings and finance lease obligations was approximately carrying value.

The weighted-average interest rate on short-term borrowings outstanding at March 31, 2020, December 31, 2019, and March 31, 2019 was 2.0%, 6.7% and 2.6%, respectively. The decrease in the weighted-average interest rate was primarily due to lower average commercial paper interest.

Repurchase Facility

In February 2020, the company entered into a new committed receivable repurchase facility of up to $1.3 billion (the "2020 Repurchase Facility") which expires in December 2020. Under the 2020 Repurchase Facility, Corteva may sell a portfolio of available and eligible outstanding customer notes receivables to participating institutions and simultaneously agree to repurchase at a future date. The 2020 Repurchase Facility is considered a secured borrowing with the customer notes receivable inclusive of those that are sold and repurchased, equal to 105 percent of the outstanding amounts borrowed utilized as collateral. Borrowings under the 2020 Repurchase Facility have an interest rate of LIBOR + 0.75 percent.

As of March 31, 2020, $32 million of notes receivable, recorded in accounts and notes receivable - net, were pledged as collateral against outstanding borrowings under the 2020 Repurchase Facility of $30 million, recorded in short-term borrowings and finance lease obligations on the interim Condensed Consolidated Balance Sheet.

Revolving Credit Facilities

In November 2018, EID entered into a $3.0 billion 5-year revolving credit facility and a $3.0 billion 3-year revolving credit facility (the “Revolving Credit Facilities”). The Revolving Credit Facilities became effective May 2019. Corteva, Inc. became a party at the time of the Corteva Distribution. The Revolving Credit Facilities may serve as a substitute to the company's commercial paper program, and can be used, from time to time, for general corporate purposes including, but not limited to, the funding of seasonal working capital needs. The Revolving Credit Facilities contain customary representations and warranties, affirmative and negative covenants and events of default that are typical for companies with similar credit ratings. Additionally, the Revolving Credit Facilities contain a financial covenant requiring that the ratio of total indebtedness to total capitalization for Corteva and its consolidated subsidiaries not exceed 0.60.

In March 2020, the Company drew down $500 million under the $3.0 billion 3-year revolving credit facility as a result of the volatility and increased borrowing costs of commercial paper resulting from the unstable market conditions caused by the novel coronavirus ("COVID-19"). Unused commitments under the 3-year revolving credit facility were $2.5 billion as of March 31, 2020. The company elected a 6 month LIBOR interest rate option for the $500 million borrowing. Borrowings outstanding under the 3-year revolving credit facility as of March 31, 2020 bore interest at an all-in-rate of 1.99% per annum.

Under the Revolving Credit Facilities, all amounts borrowed, absence any event of default, are not required to be repaid until the commitment termination date which is May 2022 for the 3-year revolving credit facility and May 2024 for the 5-year revolving credit facility, despite the interest rate option elected. As a result, borrowings under the Revolving Credit Facilities as of March 31, 2020 are reflected as long-term debt in the interim Condensed Consolidated Balance Sheet.

The fair value of the company’s long-term borrowings, including debt due within one year, was $612 million, $119 million, and $6,830 million as of March 31, 2020, December 31, 2019, and March 31, 2019, respectively, and was determined using quoted market prices for the same or similar issues, or current rates offered to the company for debt of the same remaining maturities (Level 2 inputs).