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LONG-TERM DEBT
12 Months Ended
Dec. 31, 2015
LONG-TERM DEBT  
LONG-TERM DEBT

NOTE 5

LONG-TERM DEBT

 

Long-term debt consisted of the following:

 

Balance at December 31, (in millions)

 

2015

 

 

2014

 

 

 

 

 

 

 

 

2.50% senior notes due 2016

 

$

700

 

 

$

700

 

4.125% senior notes due 2016

 

750

 

 

750

 

1.75% senior notes due 2017

 

1,250

 

 

1,250

 

1.50% senior notes due 2018

 

500

 

 

500

 

9.25% senior debentures due 2019

 

116

 

 

116

 

4.10% senior notes due 2021

 

1,249

 

 

1,249

 

3.125% senior notes due 2022

 

813

 

 

813

 

2.70% senior notes due 2023

 

1,191

 

 

1,191

 

8.75% medium-term notes due 2023

 

22

 

 

22

 

3.50% senior notes due 2025

 

750

 

 

 

7.2% senior debentures due 2028

 

82

 

 

82

 

8.45% senior debentures due 2029

 

116

 

 

116

 

4.625% senior notes due 2045

 

750

 

 

 

Variable rate bonds due 2030 (0.15% and 0.04% as of December 31, 2015 and 2014, respectively )

 

68

 

 

68

 

 

 

 

 

 

 

 

 

 

8,357

 

 

6,857

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

Unamortized discount, net

 

(24

)

 

(19

)

Current maturities

 

(1,450

)

 

 

 

 

 

 

 

 

 

Total

 

$

6,883

 

 

$

6,838

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt are the result of Occidental’s 4.125-percent and 2.5-percent Senior Notes due in 2016.  In February 2016, Occidental used cash on hand to retire $700 million of these current maturities.

Occidental has a bank credit facility (Credit Facility) with a $2.0 billion commitment expiring in 2019.  No amounts have been drawn under this Credit Facility.  Up to $1.0 billion of the Credit Facility is available in the form of letters of credit.  Borrowings under the Credit Facility bear interest at various benchmark rates, including LIBOR, plus a margin based on Occidental’s senior debt ratings.  Additionally, Occidental paid average annual facility fees of 0.08 percent in 2015 on the total commitment amounts of the Credit Facility.

The Credit Facility provides for the termination of loan commitments and requires immediate repayment of any outstanding amounts if certain events of default occur.  The Credit Facility and other debt agreements do not contain material adverse change clauses or debt ratings triggers that could restrict Occidental’s ability to borrow or that would permit lenders to terminate their commitments or accelerate debt.

As of December 31, 2015, under the most restrictive covenants of its financing agreements, Occidental had substantial capacity for additional unsecured borrowings, the payment of cash dividends and other distributions on, or acquisitions of, Occidental stock.

In June 2015, Occidental issued $1.5 billion of debt that was comprised of $750 million of 3.50-percent senior unsecured notes due 2025 and $750 million of 4.625-percent senior unsecured notes due 2045. Occidental received net proceeds of approximately $1.48 billion. Interest on the notes is payable semi-annually in arrears in June and December of each year for both series of notes.

In 2014, Occidental repurchased approximately $107 million of various senior notes due in 2022 and later.

In December 2013, all $600 million of the outstanding 1.45-percent senior notes due 2013 matured.  In addition, Occidental repurchased approximately $90 million of various senior notes due in 2021 and later.

Occidental has provided guarantees on Dolphin Energy’s debt, which are limited to certain political and other events.  At December 31, 2015 and 2014, Occidental’s total guarantees were not material and a substantial majority of the amounts consisted of limited recourse guarantees on approximately $318 million and $336 million, respectively, of Dolphin’s debt.  The fair value of the guarantees was immaterial.

At December 31, 2015, principal payments on long-term debt aggregated approximately $8.4 billion, of which $1.5 billion is due in 2016, $1.3 billion is due in 2017, $0.5 billion is due in 2018, $0.1 billion is due in 2019, zero is due in 2020 and $5 billion is due in 2021 and thereafter.

Occidental estimates the fair value of fixed-rate debt based on the quoted market prices for those instruments or on quoted market yields for similarly rated debt instruments, taking into account such instruments’ maturities.  The estimated fair values of Occidental’s debt at December 31, 2015 and 2014, substantially all of which were classified as Level 1, were approximately $8.4 billion and $7.0 billion, respectively, compared to carrying values of approximately $8.3 billion and $6.9 billion, respectively.  Occidental’s exposure to changes in interest rates relates primarily to its variable-rate, long-term debt obligations, and is not material.  As of December 31, 2015 and 2014, variable-rate debt constituted approximately one percent of Occidental’s total debt.