Debt and Other Financing Arrangements (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Summary of Long-term Debt Obligations

A summary of the Company's long-term debt obligations at December 31, 2020 and 2019 is set forth in the following table:

	December 31, 2020						December 31, 2019
	Principal		Carrying Amount(a)		Effective Interest Rate		Principal		Carrying Amount(a)		Effective Interest Rate
Credit Facilities
Revolver Borrowings
Due 2023	$	—	$	—	—	%	$	183	$	183	3.374	%
Term Loans
LIBOR plus 2.50% Term Loan A due 2019 through 2023(b)	1,530		1,520		2.876	%	1,615		1,608		3.665	%
LIBOR plus 3.00% Term Loan B due 2019 through 2025(c)	1,666		1,612		3.955	%	1,683		1,623		5.557	%
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024(d)	225		223		5.609	%	225		222		5.609	%
$500 million of 5.000% Senior Notes due 2026(e)	500		494		5.219	%	500		494		5.219	%
Senior Secured Notes (j)
€415 million of 4.875% Euro Fixed Rate Notes due 2022(f)	—		—		—	%	465		479		3.599	%
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024(g)	366		370		4.620	%	336		340		4.620	%
€350 million of 5.000% Euro Fixed Rate Notes due 2024(h)	428		445		3.823	%	392		413		3.823	%
$500 million of 7.875% Senior Secured Notes due 2029(i)	500		489		8.212	%	—		—		—	%
Other debt, primarily foreign instruments(k)	24		23				14		13
			5,176						5,375
Less - maturities classified as current(k)			5						4
Total long-term debt			$	5,171					$	5,371

(a) Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $82 million and $76 million as of December 31, 2020 and 2019. Total unamortized debt (premium) discount, net was $(20) million and $(37) million as of December 31, 2020 and 2019.

(b) Principal and interest payable in 19 consecutive quarterly installments beginning March 31, 2019. As of December 31, 2020, principal and interest is payable in 11 remaining quarterly installments with $32 million being paid quarterly for the next four quarters followed by $43 million in the subsequent seven quarters and the remainder at maturity. The interest rate on Term Loan A at December 31, 2019 was LIBOR plus 1.75%.

(c) Principal and interest payable in 27 consecutive quarterly installments of $4 million beginning March 31, 2019 and the remainder at maturity.

(d) Interest payable semiannually beginning on June 30, 2015 with principal due at maturity.

(e) Interest payable semiannually beginning on January 31, 2017 with principal due at maturity.

(f) The Company redeemed all of its 4.875% Euro Fixed Rate Notes on December 14, 2020.

(g) Interest accrues at the three-month EURIBOR rate (with 0% floor) plus 4.875% per annum and payable quarterly on January 15, April 15, July 15 and October 15.

(h) Interest payable semiannually on January 15 and July 15 of each year beginning on July 17, 2017 with principal due at maturity.

(i) On November 30, 2020, the Company issued $500 million aggregate principal amount of 7.875% senior secured notes due January 15, 2029. Interest payable semiannually on January 15 and July 15 of each year beginning on July 15, 2021 with principal due at maturity.

(j) Rank equally in right of payment to all indebtedness under the New Credit Facility (as subsequently defined).

(k) Finance lease obligations included in other debt were $8 million and $2 million as of December 31, 2020 and 2019. The maturities classified as current included the current portion of the finance lease obligations of $3 million and $1 million as of December 31, 2020 and 2019. Refer to Note 16, “Leases” for additional information.

The aggregate maturities applicable to the long-term debt outstanding at December 31, 2020:

	Aggregate Maturities
2021	$	150
2022	$	192
2023	$	1,253
2024	$	1,039
2025	$	1,605

Interest expense associated with the amortization of the debt issuance costs and original issue discounts (premiums) recognized in the Company's consolidated statements of income (loss) consists of the following:

	Year Ended December 31
	2020		2019		2018
Amortization of debt issuance fees	$	21	$	18	$	8
Accretion of debt premium	$	(11)	$	(13)	$	(3)

Summary of Short-term Debt Obligations

The Company's short-term debt as of December 31, 2020 and 2019 is as follows:

	At December 31
	2020		2019
Maturities classified as current	$	5	$	4
Short-term borrowings(a)	157		179
Bank overdrafts	—		2
Total short-term debt	$	162	$	185

Weighted average interest rate on outstanding short-term borrowings at end of year 3.6  % 4.3  %

(a) Includes borrowings under both committed credit facilities and uncommitted lines of credit and similar arrangements.

Financing Arrangements

Financing Arrangements

The table below shows the Company's borrowing capacity on committed credit facilities at December 31, 2020 (in billions):

	Committed Credit Facilities at December 31, 2020
	Term	Available(b)
Tenneco Inc. revolving credit facility (a)	2023	$	1.5
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2021-2028	—
		$	1.5

(a)The Company is required to pay commitment fees under the revolving credit facility on the unused portion of the total commitment.

(b)Letters of credit reduce the available borrowings under the revolving credit facility.

The interest rate on borrowings under the revolving credit facility and the Term Loan A facility are subject to step down as follows:

Consolidated net leverage ratio	Interest rate
greater than 3.0 to 1	LIBOR plus 2.00%
less than 3.0 to 1 and greater than 2.5 to 1	LIBOR plus 1.75%
less than 2.5 to 1 and greater than 1.5 to 1	LIBOR plus 1.50%
less than 1.5 to 1	LIBOR plus 1.25%

The Third Amendment provides for an increase to the margin applicable to borrowings under the revolving credit facility and the Term Loan A facility at certain leverage levels as set forth below as one of several conditions for obtaining less restrictive financial maintenance covenants described below under New Credit Facility — Other Terms and Conditions:

Consolidated net leverage ratio	Interest rate
greater than 6.0 to 1	LIBOR plus 2.50%
less than 6.0 to 1 and greater than 4.5 to 1	LIBOR plus 2.25%

After giving effect to the Third Amendment, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility include (i) a requirement to have a senior secured leverage ratio (as defined in the New Credit Facility), with step-downs, as detailed in the table below; (ii) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), with step-downs, as follows:

(i) Senior secured net leverage ratio		(ii) Consolidated net leverage ratio
not greater than 6.75 to 1	at June 30, 2020	not greater than 4.50 to 1	at March 31, 2020
not greater than 9.50 to 1	at September 30, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.75 to 1	at December 31, 2020	not greater than 4.75 to 1	at June 30, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.25 to 1	at September 30, 2021
not greater than 4.00 to 1	at December 31, 2021

and (iii) a requirement to maintain a consolidated interest coverage ratio (as defined in the New Credit Facility) for any period of four consecutive fiscal quarters of not less than 2.75 to 1 as of March 31, 2020, 2.00 to 1 as of June 30, 2020, 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

If a Covenant Reset Trigger occurs, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (the “Prior Financial Covenants”), including (i) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), at the end of each fiscal quarter, with step-downs, as follows:

(i) Consolidated net leverage ratio
not greater than 4.50 to 1	through March 31, 2021
not greater than 4.25 to 1	through September 30, 2021
not greater than 4.00 to 1	through March 31, 2022
not greater than 3.75 to 1	through September 30, 2022
not greater than 3.50 to 1	thereafter

Schedule of Gain (Loss) on Securitizations or Asset-backed Financing Arrangements of Financial Assets Accounted for as Sale

The Company has securitization programs for some of its accounts receivable, with limited recourse provisions. Borrowings on these securitization programs, which are recorded in short-term debt, at December 31, 2020 and 2019 are as follows:

	At December 31
	2020		2019
Borrowings on securitization programs	$	5	$	4

The following table represents the Company's expenses associated with these arrangements for the years ended December 31, 2020, 2019, and 2018 are as follows:

	Year Ended December 31
	2020		2019		2018
Loss on sale of receivables (a)	$	20	$	31	$	16

(a) Amount is included in “Interest expense” in the consolidated statements of income (loss).