Debt and Derivatives

9 Months Ended

Sep. 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 September 30, 2023:

	September 30,		December 31,
	2023		2022
Commercial paper program (weighted average interest rate of 5.5% as of September 30, 2023 and 4.9% as of December 31, 2022)	$	490	$	1,730
Senior notes, maturing through 2050, interest rates ranging from 0.75% to 7.75% (weighted average interest rate of 3.7% as of September 30, 2023 and 3.2% as of December 31, 2022)		11,376		8,626
Term Loan, interest rate of 5.1% as of December 31, 2022		—		1,000
Canadian senior notes, C$500 million maturing September 2026, interest rate of 2.6%		368		369
Tax-exempt bonds, maturing through 2048, fixed and variable interest rates ranging from 0.55% to 4.4% (weighted average interest rate of 2.9% as of September 30, 2023 and 2.7% as of December 31, 2022)		2,633		2,648
Financing leases and other, maturing through 2071 (weighted average interest rate of 4.8% as of September 30, 2023 and 4.7% as of December 31, 2022) (a)		686		699
Debt issuance costs, discounts and other		(123)		(88)
		15,430		14,984
Current portion of long-term debt		297		414
Long-term debt, less current portion	$	15,133	$	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 September 30, 2023, we had approximately $2.4 billion of debt maturing within the next 12 months, including (i) $489 million of short-term borrowings under our commercial paper program (net of related discount on issuance); (ii) $1.6 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iii) $156 million of 3.5% senior notes that mature in May 2024 and (iv) $174 million of other debt with scheduled maturities within the next 12 months, including $60 million of tax-exempt bonds. As of September 30, 2023, we have classified $2.1 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 $297 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 September 30, 2023, we had no outstanding borrowings under this facility. We had $181 million of letters of credit issued and $489 million 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

$2.8 billion as of September 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 September 30, 2023, we had $489 million 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, two-year, U.S. term credit agreement maturing May 2024 (“Term Loan”) to support general corporate purposes. WM Holdings guaranteed all obligations under the Term Loan. The interest rate we paid on our Term Loan was 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. The Term Loan had a contractual maturity of May 2024, but we elected to repay all outstanding balances under the Term Loan in August 2023 with proceeds from our July 2023 senior notes issuance, which is discussed further below.

Other Letter of Credit Lines — As of September 30, 2023, we had utilized $801 million of other uncommitted letter of credit lines with terms maturing through December 2026.

Debt Borrowings and Repayments

Commercial Paper Program — During the nine months ended September 30, 2023, we made cash repayments of $15.3 billion, which were partially offset by $14.1 billion of cash borrowings (net of related discount on issuance). A portion of these borrowings were repaid with proceeds from senior note issuances 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.

In July 2023, WMI issued $750 million and $1.25 billion of 4.875% senior notes due February 2029 and February 2034, respectively, the net proceeds of which were $1.97 billion. We used the net proceeds to reduce outstanding borrowings under our commercial paper program, repay $1.0 billion of outstanding borrowings under our Term Loan and for general corporate purposes.

Term Loan — In August 2023, we repaid $1.0 billion of outstanding borrowings under our Term Loan with proceeds from our July 2023 senior notes issuance discussed above and contemporaneously terminated the facility.

Tax-Exempt Bonds — We issued $50 million of tax-exempt bonds during the nine months ended September 30, 2023. The proceeds from the issuance of these bonds were deposited directly into a restricted trust fund to 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 $65 million of our tax-exempt bonds with available cash at their scheduled maturities.

Financing Leases and Other — The decrease in our financing leases and other debt obligations during the nine months ended September 30, 2023 is due to $91 million of cash repayments of debt at maturity, partially offset by an increase of $78 million primarily related to non-cash financing leases.

Interest Rate Derivatives

During 2023, we entered into treasury rate locks with a total notional value of $800 million to secure underlying interest rates associated with our senior notes issuances discussed above. We designated our treasury rate locks as cash flow hedges. These treasury rate locks were terminated contemporaneously with the related issuances of senior notes and we received cash of $19 million to settle the related assets.