Debt

12 Months Ended

Dec. 31, 2017

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:

		2017				2016
		Outstanding	Year-End Stated			Outstanding	Year-End Stated
(Millions, except percentages)		Balance	Rate on Debt^(a)			Balance	Rate on Debt^(a)
Commercial paper^(b)	$	1,168	1.54	%	$	2,993	1.13	%
Other short-term borrowings^(c)		140	1.27			―	―
Total	$	1,308	1.51	%	$	2,993	1.13	%

For floating-rate issuances, the stated interest rates are weighted based on the outstanding balances and rates in effect as of December 31, 2017 and 2016.
Average commercial paper outstanding was $1,076 million and $491 million in 2017 and 2016, respectively.
Represents interest-bearing overdrafts with banks.

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:

					2017							2016
									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		2018-2027	$	19,652		2.24	%	2.27	%	$	16,201		1.98	%	1.44	%
Floating Rate
	Senior Notes		2018-2022		4,550		2.09		―			4,350		1.52		―
Unamortized
	Underwriting
		Fees			(49)							(39)
Total Long-Term
	Debt			$	24,153		2.21	%			$	20,512		1.88	%

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, 2017 and 2016.
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, 2017 were as follows:

(Millions)
2018		$	3,654
2019			7,150
2020			6,600
2021			2,939
2022			2,050
Thereafter			2,000
	Total		24,393
Unamortized Underwriting Fees			(49)
Unamortized Discount and Premium			(36)
Impacts due to Fair Value Hedge Accounting			(155)
Total Long-Term Debt		$	24,153

Credco maintained a bank line of credit of $3.5 billion and $3.0 billion as of December 31, 2017 and 2016, respectively, all of which was undrawn as of the respective dates. These undrawn amounts support contingent funding needs. Credco paid $ 6.0 million and $2.2 million in fees to maintain these lines for the years ended December 31, 2017 and 2016, 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, 2017, Credco’s ratio of earnings to fixed charges was 1.50. As of December 31, 2017 and 2016, 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 total interest, primarily related to short- and long-term debt, and corresponding interest rate swaps of $0.5 billion for the year ended December 31, 2017, and $0.3 billion for both the years ended December 31, 2016 and 2015.