Debt

12 Months Ended

Dec. 31, 2016

Note 4 – Debt

Short-Term Debt

Credco’s short-term debt outstanding (excluding short-term debt to affiliates), defined as borrowings with original contractual maturity dates of less than one year, as of December 31 were as follows:

		2016				2015
		Outstanding	Year-End Stated			Outstanding	Year-End Stated
(Millions, except percentages)		Balance	Rate on Debt			Balance	Rate on Debt
Commercial paper^(a)	$	2,993	1.13	%	$	2,120	0.38	%
Total	$	2,993	1.13	%	$	2,120	0.38	%

Average commercial paper outstanding was $491 million and $943 million in 2016 and 2015, respectively.

Credco paid interest on short-term debt of $11 million, $3.5 million and $0.3 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Long-Term Debt

Credco’s long-term debt outstanding, defined as debt with original contractual maturity dates of one year or greater, as of December 31 was as follows:

					2016							2015
									Year-End							Year-End
			Original				Year-End		Effective					Year-End		Effective
			Contractual				Stated		Interest					Stated		Interest
(Millions, except			Maturity		Outstanding		Rate		Rate with			Outstanding		Rate		Rate with
percentages)			Dates		Balance	^(a)	on Debt	^(b)	Swaps	^(b)(c)		Balance	^(a)	on Debt	^(b)	Swaps	^(b)(c)
Fixed Rate
	Senior Notes		2017-2021	$	16,201		1.98	%	1.44	%	$	16,469		2.16	%	1.28	%
Floating Rate
	Senior Notes		2017-2020		4,350		1.52		―			5,300		0.98		―
Unamortized
	Underwriting
		Fees			(39)							(44)
Total Long-Term
	Debt			$	20,512		1.88	%			$	21,725		1.87	%

The outstanding balances include (i) unamortized discount and premium, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps. Under fair value hedge accounting, the outstanding balances on these fixed-rate notes are adjusted to reflect the impact of changes in fair value due to changes in interest rates. Refer to Note 6 for more details on Credco’s treatment of fair value hedges.
For floating-rate issuances, the stated and effective interest rates are weighted based on outstanding balances and rates in effect as of December 31, 2016 and 2015.
Effective interest rates are only presented when swaps are in place to hedge the underlying debt.

Aggregate annual maturities on long-term debt obligations (based on contractual maturity or anticipated redemption dates) as of December 31, 2016 were as follows:

(Millions)
2017		$	4,900
2018			3,624
2019			5,150
2020			4,150
2021			2,794
	Total		20,618
Unamortized Underwriting Fees			(39)
Unamortized Discount and Premium			(12)
Impacts due to Fair Value Hedge Accounting			(55)
Total Long-Term Debt		$	20,512

Credco maintained a $3.0 billion bank line of credit with $ 3.0 billion undrawn as of December 31, 2016 and 2015. These undrawn amounts support contingent funding needs. Credco paid $2.2 million and $25.8 million in fees to maintain these lines for the years ended December 31, 2016 and 2015, respectively. The availability of the credit line is subject to compliance with certain financial covenants, including the maintenance of a 1.25 ratio of earnings to fixed charges. As of December 31, 2016, Credco’s ratio of earnings to fixed charges was 1.62. As of December 31, 2016 and 2015, Credco was not in violation of any of its debt covenants.

The committed facility does not contain material adverse change clauses that would preclude borrowing under the credit facility. Additionally, the facility may not be terminated should there be a change in Credco’s credit ratings.

Credco paid interest on long-term debt obligations and corresponding interest rate swaps of $0.3 billion for both the years ended December 31, 2016 and 2015, and $0.5 billion for the year ended December 31, 2014.