LONG-TERM DEBT

12 Months Ended

Dec. 31, 2021


NOTE 6 - LONG-TERM DEBT

As of December 31, 2021 and 2020, Occidental’s debt consisted of the following:


millions	2021		2020
4.850% senior notes due 2021	$	—	$	147
2.600% senior notes due 2021	—		224
Variable rate bonds due 2021 (1.193% as of December 31, 2020)	—		27
2.700% senior notes due 2022	—		629
3.125% senior notes due 2022	—		276
2.600% senior notes due 2022	101		101
Variable rate bonds due 2022 (1.730% as of December 31, 2020)	—		1,052
2.700% senior notes due 2023	442		927
8.750% medium-term notes due 2023	22		22
2.900% senior notes due 2024	949		3,000
6.950% senior notes due 2024	650		650
3.450% senior notes due 2024	127		248
8.000% senior notes due 2025	500		500
5.875% senior notes due 2025	900		900
3.500% senior notes due 2025	326		750
5.500% senior notes due 2025	750		750
5.550% senior notes due 2026	1,100		1,100
3.200% senior notes due 2026	797		1,000
3.400% senior notes due 2026	779		1,150
7.500% debentures due 2026	112		112
8.500% senior notes due 2027	500		500
3.000% senior notes due 2027	634		750
7.125% debentures due 2027	150		150
7.000% debentures due 2027	48		48
6.625% debentures due 2028	14		14
7.150% debentures due 2028	235		235
7.200% senior debentures due 2028	82		82
6.375% senior notes due 2028	600		600
7.200% debentures due 2029	135		135
7.950% debentures due 2029	116		116
8.450% senior debentures due 2029	116		116
3.500% senior notes due 2029	1,477		1,500
Variable rate bonds due 2030 (0.900% and 2.700% as of December 31, 2021 and 2020, respectively)	68		68
8.875% senior notes due 2030	1,000		1,000
6.625% senior notes due 2030	1,500		1,500
6.125% senior notes due 2031	1,250		1,250
7.500% senior notes due 2031	900		900
7.875% senior notes due 2031	500		500
6.450% senior notes due 2036	1,750		1,750
Zero Coupon senior notes due 2036	2,269		2,269
4.300% senior notes due 2039	693		750
7.950% senior notes due 2039	325		325
6.200% senior notes due 2040	750		750
4.500% senior notes due 2044	608		625
(continued on next page)


millions (continued)	2021		2020
4.625% senior notes due 2045	634		750
6.600% senior notes due 2046 (a)	1,157		1,100
4.400% senior notes due 2046	976		1,200
4.100% senior notes due 2047	663		750
4.200% senior notes due 2048	961		1,000
4.400% senior notes due 2049	704		750
7.730% debentures due 2096	58		60
7.500% debentures due 2096	60		78
7.250% debentures due 2096	5		49
Total borrowings at face value	$	28,493	$	35,235
Adjustments to book value:
Unamortized premium, net	670		748
Debt issuance costs	(135)		(156)
Net book value of debt	$	29,028	$	35,827
Long-term finance leases	504		316
Current finance leases	85		42
Total debt and finance leases	$	29,617	$	36,185
Less current maturities of financing leases	(85)		(42)
Less current maturities of long-term debt	(101)		(398)
Long-term debt, net	$	29,431	$	35,745

(a) Occidental entered into an exchange agreement, dated as of October 20, 2021, among Occidental and certain holders of its subsidiary Anadarko’s 7.250% debentures due 2096, its subsidiary Anadarko Holding Company’s 7.500% debentures due 2096 and its subsidiary Anadarko’s 7.730% debentures due 2096 (such notes, the 2096 Notes), pursuant to which Occidental issued approximately $57.2 million of 6.600% senior notes due 2046 as additional securities under the Indenture, dated as of August 8, 2019, between Occidental and The Bank of New York Mellon Trust Company, N.A., as trustee (the 2019 Indenture), in exchange for the cancellation of approximately $64.8 million of the 2096 notes. The additional securities have identical terms and conditions as Occidental’s previously issued 6.600% senior notes due 2046 (the Initial Securities), other than the issue date and the date from which interest will accrue, are restricted securities with a related legend and initially have a different CUSIP number and ISIN number from the Initial Securities and for all purposes are treated as a single class with the outstanding Initial Securities under the 2019 Indenture.

DEBT MATURITIES

As of December 31, 2021, future principal payments on debt were approximately $28.5 billion, of which, $101 million is due in 2022, $465 million is due in 2023, $1.7 billion is due in 2024, $2.5 billion is due in 2025, and $23.7 billion is due in 2026 and thereafter.

In January 2022, Occidental used cash on hand to repay $101 million in outstanding 2.600% senior notes due April 2022 at face value. Subsequent to the purchase and retirement of this note, Occidental’s face value of debt was $28.4 billion with no maturities in 2022.

DEBT ACTIVITY - 2021

The following table summarizes Occidental’s debt activity for the year ended December 31, 2021:


millions	Borrowings at face value
Total borrowings at face value as of December 31, 2020	$	35,235
First quarter:
4.850% senior notes due 2021	$	(147)
Variable rate bonds due 2021	(27)
Third quarter:
2.700% senior notes due 2022	$	(278)
2.700% senior notes due 2023	(484)
3.450% senior notes due 2024	(81)
2.900% senior notes due 2024	(1,620)
3.500% senior notes due 2025	(229)
3.400% senior notes due 2026	(224)
3.200% senior notes due 2026	(110)
2.600% senior notes due 2021	(224)
Floating interest rate notes due August 2022	(1,051)
Fourth quarter:
4.400% senior notes due 2046	$	(224)
4.400% senior notes due 2049	(46)
7.730% debentures due 2096	(3)
7.500% debentures due 2096	(18)
7.250% debentures due 2096	(44)
6.600% senior notes due 2046	57
3.450% senior notes due 2024	(40)
2.900% senior notes due 2024	(431)
3.500% senior notes due 2025	(195)
3.400% senior notes due 2026	(148)
3.200% senior notes due 2026	(93)
3.000% senior notes due 2027	(116)
3.500% senior notes due 2029	(23)
4.100% senior notes due 2047	(87)
4.200% senior notes due 2048	(39)
4.300% senior notes due 2039	(57)
4.500% senior notes due 2044	(17)
4.625% senior notes due 2045	(116)
3.125% senior notes due 2022	(276)
2.700% senior notes due 2022	(351)
Total borrowings at face value as of December 31, 2021	$	28,493

DEBT ACTIVITY - 2020

The following table summarizes Occidental’s debt issuances, repurchases, repayments and exchanges for the year ended December 31, 2020:


millions	Borrowings at face value
Total borrowings at face value as of December 31, 2019	$	37,401
Issuance of July 2020 notes:
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:
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	(123)
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)
October Term Loan and note repayment:
2-year variable rate bonds due August 2021	(377)
0.00% senior notes due October 2036	(2)
2-year variable rate term loan due September 2021	(1,010)
November Term Loan repayment:
2-year variable rate term loan due September 2021	(232)
Issuance of December 2020 notes:
5.500% senior notes due 2025	750
6.125% senior notes due 2031	1,250
December tender and purchase:
2.600% senior notes due August 2021	(126)
3.125% senior notes due February 2022	(538)
2.600% senior notes due April 2022	(128)
2.700% senior notes due August 2022	(1,269)
2.700% senior notes due February 2023	(212)
December Term Loan and note repayment:
2-year variable rate term loan due September 2021	(214)
4.100% senior notes due February 2021	(167)
Total borrowings at face value as of December 31, 2020	$	35,235

In the fourth quarter of 2021, Occidental used cash on hand to complete a $1.6 billion cash tender offer for outstanding senior notes with a face value of $1.5 billion and maturities ranging from 2024 through 2049. Also in December 2021, Occidental used cash on hand to retire $627 million of senior notes due 2022.

In the third quarter of 2021, Occidental completed a cash tender for outstanding senior notes with a face value of $3.0 billion and maturities ranging from 2022 through 2026, paid $224 million of senior notes upon maturity and fully retired $1.1 billion of floating interest rate notes due August 2022.

In the first quarter of 2021, Occidental repaid $174 million of debt upon maturity. No debt matured or was otherwise paid during the second quarter of 2021.

In July, August, and December, 2020, Occidental issued $7.0 billion in senior unsecured notes, in aggregate, with maturities ranging from 2025 to 2031 and used the net proceeds to tender $3.5 billion of 2021, $2.7 billion of 2022 and $264 million of 2023 maturities. In addition, Occidental used proceeds from the sale of mineral and surface acres located in Wyoming, Colorado and Utah; the Colombian asset sale and proceeds from other divestitures and cash on hand to repay $2.5 billion of 2021 and $2 million of 2036 maturities.

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 included 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 Statement of Operations.

REVOLVING CREDIT FACILITY

In December 2021, Occidental entered into the Second Amended and Restated Credit Agreement on its existing $5.0 billion RCF in which the total commitment was decreased to $4.0 billion and the LIBOR benchmark was changed to SOFR. In addition, the interest rate margin and the facility fee rates were amended to be subject to adjustments based on Occidental’s performance on specified sustainability target thresholds with respect to absolute reductions in GHG emissions from its worldwide operated assets. The RCF maturity date was extended to June 30, 2025.

Borrowings under the RCF bear interest at SOFR benchmark rates, plus a margin based on Occidental’s senior debt ratings. The facility has similar terms to other debt agreements and does 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 repayment. The facility provides for the termination of loan commitments and requires immediate repayment of any outstanding amounts if certain events of default occur. As of the date of this filing, Occidental has no drawn amounts under the RCF. In 2021, Occidental paid average annual facility fees of 0.302% on the total commitment amount.

RECEIVABLES SECURITIZATION FACILITY

In December 2021, Occidental amended and extended its existing receivables securitization facility to December 2024. As of December 31, 2021, the facility had $400 million of available borrowing capacity and no drawn amounts. The amended facility includes adjustments based on the same specified sustainability target thresholds as contained in the RCF.

ZERO COUPONS

The Zero Coupons have an aggregate principal amount due at the 2036 maturity of approximately $2.3 billion, reflecting an accretion rate of 5.24%. The Zero Coupons can be put to Occidental in October of each year, in whole or in part, for the then-accreted value of the outstanding Zero Coupons. The Zero Coupons can next be put to Occidental in October 2022, which, if put in whole, would be $1.1 billion at such date. Occidental has the ability and intent to refinance these obligations under the RCF or other committed facilities.

FAIR VALUE OF DEBT

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 as of December 31, 2021, and 2020, the majority of which were classified as Level 1, were approximately $31.1 billion and $33.8 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, 2021, and 2020, variable-rate debt constituted approximately 0.2% and 3% of Occidental’s total debt, respectively.

DEBT RATINGS

As of the date of this filing, Occidental’s long-term debt was rated BB+ by Fitch Ratings, Ba2 by Moody’s Investors Service and BB+ by Standard and Poor’s. In January 2022, Standard and Poor’s upgraded Occidental’s credit rating to BB+. Any downgrade in credit ratings could impact Occidental's ability to access capital markets and increase its cost of capital. In addition, given that Occidental’s current debt ratings are non-investment grade, Occidental may be requested, and in some cases required, to provide collateral in the form of cash, letters of credit, surety bonds or other acceptable support as financial assurance of its performance and payment obligations under certain contractual arrangements such as pipeline transportation contracts, environmental remediation obligations, oil and gas purchase contracts and certain derivative instruments.

As of the date of this filing, Occidental has provided required financial assurances through a combination of cash, letters of credit and surety bonds and has not issued any letters of credit under the RCF or other committed facilities. For additional information, see Risk Factors in Part I, Item IA of this Form 10-K.