Long-Term Debt

9 Months Ended

Sep. 30, 2020


NOTE 8 - LONG-TERM DEBT

The following table summarizes Occidental's outstanding debt, including finance lease liabilities:


millions	September 30, 2020		December 31, 2019
Total borrowings at face value	$	37,511	$	37,401
Adjustments to book value:
Unamortized premium, net	765		914
Debt issuance costs	(144)		(125)
Long-term finance leases	292		347
Current finance leases	33		51
Total debt and finance leases	38,457		38,588
Less current maturities of long-term debt and financing leases	(2,558)		(51)
Long-term debt, net	$	35,899	$	38,537

DEBT ACTIVITY

In March 2020, Occidental amended the sole financial covenant in its revolving credit facility (RCF) and Term Loan by revising the definition of "Total Capitalization" within each agreement to exclude any non-cash write-downs, impairments and related charges occurring after September 30, 2019.

In July and August 2020, Occidental issued several series of notes with maturities from five to ten years and used the proceeds to fund cash tender offers for certain outstanding series of notes to pay down other indebtedness, with maturities from one to three years, and the Term Loan.

In August 2020, Occidental exchanged approximately 27.9 million WES common units to retire a $260 million note payable to WES, resulting in a net loss of $46 million, which includes a $76 million gain on debt extinguished associated with an unamortized premium on the note payable to WES. This net loss on exchange has been presented in (losses) gains on sale of assets, net in the Consolidated Condensed Statement of Operations.

The following table summarizes Occidental's debt issuances, repurchases, repayments and exchanges for the nine months ended September 30, 2020:


millions	Borrowings at face value
Total borrowings at face value as of December 31, 2019	$	37,401
Issuance of July 2020 Notes: (a)
8.000% senior notes due 2025	500
8.500% senior notes due 2027	500
8.875% senior notes due 2030	1,000
July tender and purchase:
4.100% senior notes due February 2021	(943)
Variable rate bonds due February 2021	(473)
4.850% senior notes due March 2021	(530)
2.600% senior notes due August 2021	(51)
Issuance of August 2020 Notes: (b)
5.875% senior notes due 2025	900
6.375% senior notes due 2028	600
6.625% senior notes due 2030	1,500
August and September tender and purchase:
4.100% senior Notes due February 2021	(139)
Variable rate bonds due August 2021	(122)
2.600% senior Notes due August 2021	(1,099)
Variable rate bonds due August 2022	(448)
2.600% senior Notes due April 2022	(171)
2.700% senior Notes due August 2022	(102)
2.700% senior Notes due February 2023	(52)
August WES exchange:
6.500% note payable to WES due 2038	(260)
September Term Loan Repayment:
2-year variable rate Term Loan due 2021	(500)
Total borrowings at face value as of September 30, 2020	$	37,511

(a) Interest on the July notes will be paid semi-annually in arrears on July 15 and January 15 of each year, commencing on January 15, 2021.

(b) Interest on the August notes will be paid semi-annually on March 1 and September 1 of each year, commencing on March 1, 2021.

SUBSEQUENT DEBT ACTIVITY

In October 2020, Occidental fully redeemed the remaining variable rate notes due August 2021 for $377 million, and Occidental paid $1.0 billion of the Term Loan with proceeds from the sale of mineral and surface acres located in Wyoming, Colorado and Utah. After this payment, $446 million of the Term Loan remained outstanding.

FAIR VALUE OF DEBT

The estimated fair value of Occidental’s debt as of September 30, 2020, was $31.5 billion. The majority of Occidental's debt is classified as Level 1, with $1.6 billion classified as Level 2. At December 31, 2019, the estimated fair value of Occidental's debt was $38.8 billion.