Revolving Credit Facility and Commercial Paper Program

9 Months Ended

Sep. 30, 2021

Revolving Credit Facility and Commercial Paper Program

Debt

Debt

Revolving Credit Facility and Commercial Paper Program

A.    Credit Facility

We have a $3.0 billion unsecured revolving credit facility with an initial term that expires in March 2023 and includes, at our option, two six-month extensions. The revolving credit facility allows us to borrow in up to 14 currencies, including U.S. dollars, and has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under our credit facility, our investment grade credit ratings as of September 30, 2021 provide for financing at the London Interbank Offered Rate, commonly referred to as LIBOR, plus 0.775% with a facility commitment fee of 0.125%, for all-in drawn pricing of 0.90% over LIBOR. The borrowing rate is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our revolving credit facility. Our revolving credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation.

At September 30, 2021, credit facility origination costs of $5.1 million are included in other assets, net, as compared to $7.7 million at December 31, 2020, on our consolidated balance sheet. These costs are being amortized over the remaining term of our revolving credit facility.

At September 30, 2021 and December 31, 2020, we had a borrowing capacity of $3.0 billion available on our revolving credit facility (subject to customary conditions to borrowing) and no outstanding balance.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 0.8% during the nine months ended September 30, 2021 and 1.5% during the nine months ended September 30, 2020. Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at September 30, 2021, we were in compliance with the covenants on our revolving credit facility.

B.    Commercial Paper Program

In August 2020, we established a U.S. dollar-denominated unsecured commercial paper program. Under the terms of the program, we may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. The commercial paper ranks on a parity in right of payment with all of our other unsecured senior indebtedness outstanding from time to time, including borrowings under our revolving credit facility, our term loan and our outstanding senior unsecured notes. Proceeds from commercial paper borrowings will be used for general corporate purposes. As of September 30, 2021, the balance of borrowings outstanding under our commercial paper program was $405.0 million as compared to no outstanding commercial paper borrowings at December 31, 2020. The weighted average interest rate on outstanding borrowings under our commercial paper program was 0.2% for the nine months ended September 30, 2021 and 0.3% from the inception of the program through September 30, 2020. We use our $3.0 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program. The commercial paper borrowings outstanding at September 30, 2021 totaled $405.0 million and matured as follows; $80.0 million on October 14, 2021, $290.0 million on November 1, 2021 and $35.0 million on November 2, 2021.