Debt and Derivatives

6 Months Ended

Jun. 30, 2023

Debt and Derivatives

Debt and Derivatives

3.    Debt and Derivatives

The following table summarizes the major components of debt at principal amounts as of each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of June 30, 2023:

	June 30,		December 31,
	2023		2022
Commercial paper program (weighted average interest rate of 5.4% as of June 30, 2023 and 4.9% as of December 31, 2022)	$	1,345	$	1,730
Senior notes, maturing through 2050, interest rates ranging from 0.75% to 7.75% (weighted average interest rate of 3.5% as of June 30, 2023 and 3.2% as of December 31, 2022)		9,376		8,626
Term Loan maturing May 2024, interest rate of 5.9% as of June 30, 2023 and 5.1% as of December 31, 2022		1,000		1,000
Canadian senior notes, C$500 million maturing September 2026, interest rate of 2.6%		378		369
Tax-exempt bonds, maturing through 2048, fixed and variable interest rates ranging from 0.4% to 4.4% (weighted average interest rate of 2.9% as of June 30, 2023 and 2.7% as of December 31, 2022)		2,658		2,648
Financing leases and other, maturing through 2071 (weighted average interest rate of 4.8% as of June 30, 2023 and 4.7% as of December 31, 2022) (a)		702		699
Debt issuance costs, discounts and other		(91)		(88)
		15,368		14,984
Current portion of long-term debt		513		414
Long-term debt, less current portion	$	14,855	$	14,570

(a) Excluding our landfill financing leases, the maturities of our financing leases and other debt obligations extend through 2059.

Debt Classification

As of June 30, 2023, we had approximately $3.6 billion of debt maturing within the next 12 months, including (i) $1.3 billion of short-term borrowings under our commercial paper program (net of related discount on issuance); (ii) our $1.0 billion, two-year, U.S. term credit agreement maturing May 2024 (“Term Loan”); (iii) $983 million of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iv) $156 million of 3.5% senior notes that mature in May 2024 and (v) $172 million of other debt with scheduled maturities within the next 12 months, including $55 million of tax-exempt bonds. As of June 30, 2023, we have classified $3.1 billion of debt maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $3.5 billion long-term U.S. and Canadian revolving credit facility (“$3.5 billion revolving credit facility”), as discussed below. The remaining $513 million of debt maturing in the next 12 months is classified as current obligations.

Access to and Utilization of Credit Facilities, Commercial Paper Program and Term Loan

$3.5 Billion Revolving Credit Facility — Our $3.5 billion revolving credit facility, maturing May 2027, provides us with credit capacity to be used for cash borrowings, to support letters of credit and to support our commercial paper program. The interest rates we pay on outstanding U.S. or Canadian loans are based on the Secured Overnight Financing Rate (“SOFR”) administered by the Federal Reserve Bank of New York or the Canadian Dollar Offered Rate (“CDOR”), respectively, plus a spread depending on WMI’s senior public debt rating assigned by Moody’s Investors Service, Inc. and Standard and Poor’s Global Ratings. As of June 30, 2023, we had no outstanding borrowings under this facility. We had $179 million of letters of credit issued and $1.3 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program, both supported by the facility, leaving unused and available credit capacity of

$2.0 billion as of June 30, 2023.WM Holdings, a wholly-owned subsidiary of WMI, guarantees all the obligations under the $3.5 billion revolving credit facility.

Commercial Paper Program — We have a commercial paper program that enables us to borrow funds for up to 397 days at competitive interest rates. The rates we pay for outstanding borrowings are based on the term of the notes. The commercial paper program is fully supported by our $3.5 billion revolving credit facility. As of June 30, 2023, we had $1.3 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program.

Term Loan — In May 2022, we entered into our $1.0 billion, Term Loan maturing May 2024 to support general corporate purposes. The interest rate we pay on our outstanding balance is generally based on SOFR, plus a spread depending on WMI’s senior public debt rating assigned by Moody’s Investors Service, Inc. and Standard and Poor’s Global Ratings. As of June 30, 2023, we had $1.0 billion of outstanding borrowings under our Term Loan. WM Holdings also guarantees all the obligations under the Term Loan.

Other Letter of Credit Lines — As of June 30, 2023, we had utilized $802 million of other uncommitted letter of credit lines with terms maturing through December 2026.

Debt Borrowings and Repayments

Commercial Paper Program — During the six months ended June 30, 2023, we made cash repayments of $10.5 billion, which were partially offset by $10.1 billion of cash borrowings (net of related discount on issuance). A portion of these borrowings were used to repay senior notes at maturity as discussed below.

Senior Notes — In February 2023, WMI issued $750 million and $500 million of 4.625% senior notes due February 2030 and February 2033, respectively, the net proceeds of which were $1.24 billion. We used the net proceeds to reduce outstanding borrowings under our commercial paper program, repay $500 million of WMI’s 2.4% senior notes upon maturity in May 2023, and for general corporate purposes, including our sustainability capital investment program.

Tax-Exempt Bonds — We issued $50 million of tax-exempt bonds during the six months ended June 30, 2023. The proceeds from the issuance of these bonds were deposited directly into a restricted trust fund and may only be used for the specific purpose for which the money was raised, which is generally to finance expenditures for solid waste disposal facility, material recovery facility and renewable natural gas facility construction and development. In 2023, we also repaid $40 million of our tax-exempt bonds with available cash at their scheduled maturities.

Financing Leases and Other — The increase in our financing leases and other debt obligations during the six months ended June 30, 2023 is due to an increase of $61 million primarily related to non-cash financing leases, partially offset by $58 million of cash repayments of debt at maturity.

Interest Rate Derivatives

During the second quarter of 2023, we entered into treasury rate locks with a notional value of $200 million to secure an underlying interest rate of a debt issuance that is currently being evaluated for the second half of 2023, subject to market conditions and other considerations. We designated our treasury rate locks as cash flow hedges. As of June 30, 2023, the fair value of these active interest rate derivatives was an asset of $8 million, classified as other current assets in our Condensed Consolidated Balance Sheet.