Debt and Other Financing Arrangements (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Summary of Long-term Debt Obligations

A summary of the Company’s long-term debt obligations at March 31, 2021 and December 31, 2020 is set forth in the following table:

	March 31, 2021				December 31, 2020
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	—	$	—	$	—	$	—
Term Loans
LIBOR plus 2.25% Term Loan A due 2019 through 2023(b)	1,498		1,490		1,530		1,520
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,662		1,610		1,666		1,612
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		223
$500 million of 5.000% Senior Notes due 2026	500		495		500		494
Senior Secured Notes
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024(c)	—		—		366		370
€350 million of 5.000% Euro Fixed Rate Notes due 2024(c)	—		—		428		445
$500 million of 7.875% Senior Secured Notes due 2029	500		490		500		489
$800 million of 5.125% Senior Secured Notes due 2029(d)	800		786		—		—
Other debt, primarily foreign instruments	24		23		24		23
			5,117				5,176
Less - maturities classified as current			6				5
Total long-term debt			$	5,111			$	5,171

(a)Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $92 million and $82 million at March 31, 2021 and December 31, 2020. Total unamortized debt (premium) discount, net was $1 million and $(20) million at March 31, 2021 and December 31, 2020.

(b)The interest rate on Term Loan A at December 31, 2020 was LIBOR plus 2.50%.

(c)The Company satisfied and discharged all of its 4.875% Euro Floating Rate Notes due 2024 and 5.000% Euro Fixed Rate Notes due 2024 on March 17, 2021.

(d)On March 17, 2021, the Company issued $800 million aggregate principal amount of 5.125% senior secured notes due April 15, 2029. Interest payable semiannually on April 15 and October 15 of each year beginning on October 15, 2021 with principal due at maturity.

Interest expense associated with the amortization of the debt issuance costs and original issue discounts (premiums) recognized in the Company’s condensed consolidated statements of income (loss) for the three months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Amortization of debt issuance fees(a)	$	6	$	5
Accretion of debt premium	$	(2)	$	(3)

(a)Included in the table above is the amortization of debt issuance costs on the revolver of $2 million and $1 million during the three months ended March 31, 2021 and 2020.

Schedule of Short-term Debt

The Company’s short-term debt at March 31, 2021 and December 31, 2020 consists of the following:

	March 31, 2021		December 31, 2020
Maturities classified as current	$	6	$	5
Short-term borrowings(a)	118		157
Total short-term debt	$	124	$	162

(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 March 31, 2021 (in billions):

	March 31, 2021
	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)At March 31, 2021, the Company had $28 million of outstanding letters of credit under the revolving credit facility, which reduces the available borrowings under the revolving credit facility. The Company also had $74 million of outstanding letters of credit under uncommitted facilities at March 31, 2021.

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 the 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%

The New Credit Facility contains representations and warranties, and covenants which are customary for debt facilities of this type. The Third Amendment provided relief from the financial maintenance covenants for the revolving credit facility and Term Loan A facility subject to the non-occurrence of certain Covenant Reset Triggers that limit certain activities of the Company by implementing more restrictive affirmative and negative covenants. 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 8.75 to 1	at December 31, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.75 to 1	at June 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.25 to 1	at September 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.00 to 1	at December 31, 2021

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