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Debt Obligations

12 Months Ended

Dec. 31, 2020

Note 7. Debt Obligations

The following table presents our consolidated debt obligations (arranged by company and maturity date) at the dates indicated:

	December 31,
	2020			2019
EPO senior debt obligations:
Commercial Paper Notes, variable-rates	$	–		$	482.0
Senior Notes Q, 5.25% fixed-rate, due January 2020		–			500.0
Senior Notes Y, 5.20% fixed-rate, due September 2020		–			1,000.0
Senior Notes TT, 2.80% fixed-rate, due February 2021		750.0			750.0
Senior Notes RR, 2.85% fixed-rate, due April 2021		575.0			575.0
September 2020 364-Day Revolving Credit Agreement, variable-rate, due September 2021		–			–
Senior Notes VV, 3.50% fixed-rate, due February 2022		750.0			750.0
Senior Notes CC, 4.05% fixed-rate, due February 2022		650.0			650.0
Senior Notes HH, 3.35% fixed-rate, due March 2023		1,250.0			1,250.0
Senior Notes JJ, 3.90% fixed-rate, due February 2024		850.0			850.0
Multi-Year Revolving Credit Agreement, variable-rate, due September 2024		–			–
Senior Notes MM, 3.75% fixed-rate, due February 2025		1,150.0			1,150.0
Senior Notes PP, 3.70% fixed-rate, due February 2026		875.0			875.0
Senior Notes SS, 3.95% fixed-rate, due February 2027		575.0			575.0
Senior Notes WW, 4.15% fixed-rate, due October 2028		1,000.0			1,000.0
Senior Notes YY, 3.125% fixed-rate, due July 2029		1,250.0			1,250.0
Senior Notes AAA, 2.80% fixed-rate, due January 2030		1,250.0			–
Senior Notes D, 6.875% fixed-rate, due March 2033		500.0			500.0
Senior Notes H, 6.65% fixed-rate, due October 2034		350.0			350.0
Senior Notes J, 5.75% fixed-rate, due March 2035		250.0			250.0
Senior Notes W, 7.55% fixed-rate, due April 2038		399.6			399.6
Senior Notes R, 6.125% fixed-rate, due October 2039		600.0			600.0
Senior Notes Z, 6.45% fixed-rate, due September 2040		600.0			600.0
Senior Notes BB, 5.95% fixed-rate, due February 2041		750.0			750.0
Senior Notes DD, 5.70% fixed-rate, due February 2042		600.0			600.0
Senior Notes EE, 4.85% fixed-rate, due August 2042		750.0			750.0
Senior Notes GG, 4.45% fixed-rate, due February 2043		1,100.0			1,100.0
Senior Notes II, 4.85% fixed-rate, due March 2044		1,400.0			1,400.0
Senior Notes KK, 5.10% fixed-rate, due February 2045		1,150.0			1,150.0
Senior Notes QQ, 4.90% fixed-rate, due May 2046		975.0			975.0
Senior Notes UU, 4.25% fixed-rate, due February 2048		1,250.0			1,250.0
Senior Notes XX, 4.80% fixed-rate, due February 2049		1,250.0			1,250.0
Senior Notes ZZ, 4.20% fixed-rate, due January 2050		1,250.0			1,250.0
Senior Notes BBB, 3.70% fixed-rate, due January 2051		1,000.0			–
Senior Notes DDD, 3.20% fixed-rate, due February 2052		1,000.0			–
Senior Notes NN, 4.95% fixed-rate, due October 2054		400.0			400.0
Senior Notes CCC, 3.95% fixed rate, due January 2060		1,000.0			–
TEPPCO senior debt obligations:
TEPPCO Senior Notes, 7.55% fixed-rate, due April 2038		0.4			0.4
Total principal amount of senior debt obligations		27,500.0			25,232.0
EPO Junior Subordinated Notes C, variable-rate, due June 2067 (1)		232.2			232.2
EPO Junior Subordinated Notes D, fixed/variable-rate, due August 2077 (2)		700.0			700.0
EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (3)		1,000.0			1,000.0
EPO Junior Subordinated Notes F, fixed/variable-rate, due February 2078 (4)		700.0			700.0
TEPPCO Junior Subordinated Notes, variable-rate, due June 2067 (1)		14.2			14.2
Total principal amount of senior and junior debt obligations		30,146.4			27,878.4
Other, non-principal amounts		(280.7	)		(253.3	)
Less current maturities of debt		(1,325.0	)		(1,981.9	)
Total long-term debt	$	28,540.7		$	25,643.2

(1)	Variable rate is reset quarterly and based on 3-month London Interbank Offered Rate ("LIBOR") plus 2.778%.
(2)	Fixed rate of 4.875% through August 15, 2022; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.986%.
(3)	Fixed rate of 5.250% through August 15, 2027; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 3.033%.
(4)	Fixed rate of 5.375% through February 14, 2028; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.57%.

References to “TEPPCO” mean TEPPCO Partners, L.P. prior to its merger with one of our wholly owned subsidiaries in October 2009.

The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the year ended December 31, 2020:

	Range of Interest Rates Paid	Weighted-Average Interest Rate Paid
Commercial Paper Notes	1.78% to 2.08%	1.86%
EPO Junior Subordinated Notes C and TEPPCO Junior Subordinated Notes	3.00% to 4.68%	3.66%

Amounts borrowed under EPO’s 364-Day and Multi-Year Revolving Credit Agreements bear interest, at its election, equal to: (i) LIBOR, plus an additional variable spread; or (ii) an alternate base rate, which is the greater of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.5%, or (c) the LIBO Market Index Rate in effect on such day plus 1% and a variable spread. The applicable spreads are determined based on EPO's debt ratings.

In July 2017, the Financial Conduct Authority in the U.K. announced a desire to phase out LIBOR as a benchmark by the end of June 2023. Financial industry working groups are developing replacement rates and methodologies to transition existing agreements that depend on LIBOR as a reference rate. We currently do not expect the transition from LIBOR to have a material impact on us.

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at December 31, 2020 for the next five years, and in total thereafter:

				Scheduled Maturities of Debt
	Total			2021			2022			2023			2024			2025			Thereafter
Senior Notes		$	27,500.0		$	1,325.0		$	1,400.0		$	1,250.0		$	850.0		$	1,150.0		$	21,525.0
Junior Subordinated Notes			2,646.4			–			–			–			–			–			2,646.4
Total		$	30,146.4		$	1,325.0		$	1,400.0		$	1,250.0		$	850.0		$	1,150.0		$	24,171.4

In February 2021, EPO notified its trustee and paying agent to redeem all of the $575.0 million outstanding principal amount of its Senior Notes RR effective as of March 15, 2021 (one month prior to their scheduled maturity in April 2021). These notes are redeemable at EPO’s election at par (i.e., at a redemption price equal to the outstanding principal amount of such notes to be redeemed, plus accrued and unpaid interest thereon). On a short term basis, the redemption of EPO’s Senior Notes RR is expected to be made using proceeds from the issuance of short term notes under EPO’s commercial paper program.

EPO Debt Obligations

Commercial Paper Notes

EPO maintains a commercial paper program under which it may issue (and have outstanding at any time) up to $3.0 billion in aggregate principal amount of short-term notes. As a back-stop to the program, we intend to maintain a minimum available borrowing capacity under EPO’s Multi-Year Revolving Credit Agreement equal to the aggregate amount outstanding under our commercial paper notes. All commercial paper notes issued under the program are senior unsecured obligations of EPO that are unconditionally guaranteed by the Partnership. As of December 31, 2020, EPO had no short-term notes outstanding under its commercial paper program.

364-Day Revolving Credit Agreements

In September 2020, EPO entered into a new 364-Day Revolving Credit Agreement (the “September 2020 364-Day Revolving Credit Agreement”) that replaced its September 2019 364-Day Revolving Credit Agreement. Under the terms of the September 2020 364-Day Revolving Credit Agreement, EPO may borrow up to $1.5 billion (which may be increased by up to $200 million to $1.7 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of up to 364 days, subject to the terms and conditions set forth therein. The September 2020 364-Day Revolving Credit Agreement matures in September 2021. To the extent that principal amounts are outstanding at the maturity date, EPO may elect to have the entire principal balance then outstanding continued as non-revolving term loans for a period of one additional year, payable in September 2022. Borrowings under the September 2020 364-Day Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The September 2020 364-Day Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement. The September 2020 364-Day Revolving Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership, if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the September 2020 364-Day Revolving Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership.

Multi-Year Revolving Credit Agreement

EPO has entered into a multi-year revolving credit agreement (as amended, the “Multi-Year Revolving Credit Agreement”) that provides for a borrowing capacity of $3.5 billion, which may be increased by up to $500 million to $4.0 billion at EPO’s election provided certain conditions are met, with a maturity date of September 10, 2024. The maturity date may be extended at EPO’s request by up to two years, with the consent of required lenders as set forth under the credit agreement. Borrowings under the Multi-Year Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The Multi-Year Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement. The Multi-Year Revolving Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership, if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the Multi-Year Revolving Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership.

Senior Notes

EPO’s fixed-rate senior notes are unsecured obligations of EPO that rank equal with its existing and future unsecured and unsubordinated indebtedness. They are senior to any existing and future subordinated indebtedness of EPO. EPO’s senior notes are subject to make-whole redemption rights and were issued under indentures containing certain covenants, which generally restrict its ability (with certain exceptions) to incur debt secured by liens and engage in sale and leaseback transactions. In total, EPO issued $4.25 billion, $2.5 billion and $5.0 billion of senior notes during the years ended December 31, 2020, 2019 and 2018, respectively.

In January 2020, EPO issued $3.0 billion aggregate principal amount of senior notes comprised of (i) $1.0 billion principal amount of senior notes due January 2030 (“Senior Notes AAA”), (ii) $1.0 billion principal amount of senior notes due January 2051 (“Senior Notes BBB”) and (iii) $1.0 billion principal amount of senior notes due January 2060 (“Senior Notes CCC”). Senior Notes AAA were issued at 99.921% of their principal amount and have a fixed rate of interest of 2.80% per year. Senior Notes BBB were issued at 99.413% of their principal amount and have a fixed rate of interest of 3.70% per year. Senior Notes CCC were issued at 99.360% of their principal amount and have a fixed rate of interest of 3.95% per year. Net proceeds from the January 2020 senior notes offering were used by EPO for the repayment of $500.0 million principal amount of its Senior Notes Q that matured in January 2020, the repayment of amounts outstanding under its commercial paper program and for general company purposes. In addition, net proceeds from this offering were used by EPO for the repayment of $1.0 billion principal amount of its Senior Notes Y that matured in September 2020.

In August 2020, EPO issued $1.0 billion in principal amount of senior notes due February 2052 (“Senior Notes DDD”) and $250.0 million in principal amount of reopened Senior Notes AAA. The reopened Senior Notes AAA form a single series with the original notes of that series, trade under the same CUSIP number, and have the same terms as to status, redemption or otherwise as the original notes of that series. The reopened Senior Notes AAA were issued at 107.211% of their principal amount and have a fixed rate of interest of 2.80% per year. Senior Notes DDD were issued at 99.233% of their principal amount and have a fixed rate of interest of 3.20% per year. Net proceeds from the issuance of these senior notes were used for general company purposes, including for growth capital investments, and to repay a portion of the $750.0 million in principal amount of Senior Notes TT that matured in February 2021.

EPO’s senior notes are unconditionally guaranteed on an unsecured and unsubordinated basis by the Partnership.

EPO Junior Subordinated Notes

EPO’s payment obligations under its junior subordinated notes (“junior notes”) are subordinated to all of its current and future senior indebtedness. The indenture agreement governing the junior notes allows EPO to defer interest payments on one or more occasions for up to ten consecutive years subject to certain conditions. Subject to certain exceptions, during any period in which interest payments are deferred, neither the Partnership nor EPO can declare or make any distributions on any of our respective equity securities or make any payments on indebtedness or other obligations that rank equal with or are subordinate to the junior notes. Each series of EPO’s junior notes rank equal with each other and generally are not redeemable by EPO while such notes bear interest at a fixed annual rate. EPO issued $700.0 million of junior notes during the year ended December 31, 2018.

In connection with the issuance of EPO’s Junior Subordinated Notes C, EPO entered into a Replacement Capital Covenant in favor of covered debt holders (as defined in the underlying documents) pursuant to which EPO agreed, for the benefit of such debt holders, that it would not redeem or repurchase such junior notes unless such redemption or repurchase is made using proceeds from the issuance of certain securities.

EPO’s junior notes are unconditionally guaranteed on an unsecured and subordinated basis by the Partnership.

EPO repurchased and retired $24.2 million in principal amount of its Junior Subordinated Notes C in 2019. A $1.5 million gain on the extinguishment of these debt obligations is included in “Other, net” on our Statements of Consolidated Operations with respect to the year ended December 31, 2019.

Letters of Credit

At December 31, 2020, EPO had $200.7 million of letters of credit outstanding primarily related to our commodity hedging activities.

Lender Financial Covenants

We were in compliance with the financial covenants of our consolidated debt agreements at December 31, 2020.