Debt and Banking Arrangements

12 Months Ended

Dec. 31, 2020

Debt and Banking Arrangements [Text Block]

Note 14 – Debt and Banking Arrangements

Long-Term Debt


	December 31,
	2020		2019
	(Millions)
Transco:
7.08% Debentures due 2026	$	8	$	8
7.25% Debentures due 2026	200		200
7.85% Notes due 2026	1,000		1,000
4% Notes due 2028	400		400
3.25% Notes due 2030	700		—
5.4% Notes due 2041	375		375
4.45% Notes due 2042	400		400
4.6% Notes due 2048	600		600
3.95% Notes due 2050	500		—
Other financing obligation - Atlantic Sunrise	847		857
Other financing obligation - Dalton	257		259
Northwest Pipeline:
7.125% Debentures due 2025	85		85
4% Notes due 2027	500		500
Williams:
4.125% Notes due 2020	—		600
5.25% Notes due 2020	—		1,500
4% Notes due 2021	500		500
7.875% Notes due 2021	371		371
3.35% Notes due 2022	750		750
3.6% Notes due 2022	1,250		1,250
3.7% Notes due 2023	850		850
4.5% Notes due 2023	600		600
4.3% Notes due 2024	1,000		1,000
4.55% Notes due 2024	1,250		1,250
3.9% Notes due 2025	750		750
4% Notes due 2025	750		750
3.75% Notes due 2027	1,450		1,450
3.5% Notes due 2030	1,000		—
7.5% Debentures due 2031	339		339
7.75% Notes due 2031	252		252
8.75% Notes due 2032	445		445
6.3% Notes due 2040	1,250		1,250
5.8% Notes due 2043	400		400
5.4% Notes due 2044	500		500
5.75% Notes due 2044	650		650
4.9% Notes due 2045	500		500
5.1% Notes due 2045	1,000		1,000
4.85% Notes due 2048	800		800
Various — 7.7% to 10.25% Notes and Debentures due 2020 to 2027	3		24
Credit facility loans	—		—
Unamortized debt issuance costs	(125)		(119)
Net unamortized debt premium (discount)	(63)		(58)
Total long-term debt, including current portion	22,344		22,288
Long-term debt due within one year	(893)		(2,140)
Long-term debt	$	21,451	$	20,148

Certain of our debt agreements contain covenants that restrict or limit, among other things, our ability to create liens supporting indebtedness, sell assets, and incur additional debt. Default of these agreements could also restrict our ability to make certain distributions or repurchase equity.

The following table presents aggregate minimum maturities of long-term debt and other financing obligations, excluding net unamortized debt premium (discount) and debt issuance costs, for each of the next five years:


	December 31, 2020
	(Millions)
2021	$	894
2022	2,025
2023	1,477
2024	2,280
2025	1,617

Issuances and retirements

On August 17, 2020, we retired $600 million of 4.125 percent senior unsecured notes that were due November 15, 2020.

On May 14, 2020, we completed a public offering of $1 billion of 3.5 percent senior unsecured notes due 2030.

On May 8, 2020, Transco issued $700 million of 3.25 percent senior unsecured notes due 2030 and $500 million of 3.95 percent senior unsecured notes due 2050 to investors in a private debt placement. As part of the issuance, Transco entered into a registration rights agreement with the initial purchasers of the unsecured notes. Under the terms of the agreement, Transco was obligated to file and consummate a registration statement for an offer to exchange the notes for a new issue of substantially identical notes registered under the Securities Act of 1933, as amended, within 365 days from closing and to use commercially reasonable efforts to complete the exchange offer. In the fourth quarter of 2020, Transco filed the registration statement and completed the exchange offer.

We retired $1.5 billion of 5.25 percent senior unsecured notes that matured on March 15, 2020.

We retired $14 million of 8.75 percent senior unsecured notes that matured on January 15, 2020.

We retired $32 million of 7.625 percent senior unsecured notes that matured on July 15, 2019.

Other financing obligations

During the construction of the Atlantic Sunrise and Dalton projects, Transco received funding from its partners for their proportionate share of construction costs. Amounts received were recorded within noncurrent liabilities and the costs associated with construction were capitalized in the Consolidated Balance Sheet. Upon placing these projects into service Transco began utilizing the partners’ undivided interest in the assets, including the associated pipeline capacity, and reclassified the funding previously received from its partners from noncurrent liabilities to debt. The obligations, which mature in 2038 and 2052, respectively, require monthly interest and principal payments and both bear an interest rate of approximately 9 percent.

Credit Facilities


	December 31, 2020
	Stated Capacity		Outstanding
	(Millions)
Long-term credit facility (1)	$	4,500	$	—
Letters of credit under certain bilateral bank agreements			15

________________

(1) In managing our available liquidity, we do not expect a maximum outstanding amount in excess of the capacity of our credit facility inclusive of any outstanding amounts under our commercial paper program.

Revolving credit facility

In 2018, we along with Transco and Northwest Pipeline, the lenders named therein, and an administrative agent entered into a credit agreement (Credit Agreement) with aggregate commitments available of $4.5 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. The maturity date of the credit facility is August 10, 2023. However, the co-borrowers may request up to two extensions of the maturity date each for an additional one-year period to allow a maturity date as late as August 10, 2025, under certain circumstances. The Credit Agreement allows for swing line loans up to an aggregate of $200 million, subject to available capacity under the credit facility, and letters of credit commitments of $1 billion. Transco and Northwest Pipeline are each able to borrow up to $500 million under this credit facility to the extent not otherwise utilized by the other co-borrowers.

The Credit Agreement contains the following terms and conditions:

•Various covenants may limit, among other things, a borrower’s and its material subsidiaries’ ability to grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, make certain distributions during an event of default, and enter into certain restrictive agreements.

•If an event of default with respect to a borrower occurs under the credit facility, the lenders will be able to terminate the commitments and accelerate the maturity of the loans and exercise other rights and remedies.

•Other than swing line loans, each time funds are borrowed, the applicable borrower may choose from two methods of calculating interest: a fluctuating base rate equal to Citibank N.A.'s alternate base rate plus an applicable margin or a periodic fixed rate equal to the London Interbank Offered Rate plus an applicable margin. We are required to pay a commitment fee based on the unused portion of the credit facility. The applicable margin and the commitment fee are determined by reference to a pricing schedule based on the applicable borrower’s senior unsecured long-term debt ratings.

Significant financial covenants under the Credit Agreement require the ratio of debt to EBITDA (earnings before interest, taxes, depreciation, and amortization), each as defined in the credit facility, to be no greater than 5.0 to 1, except for the fiscal quarter and the two following fiscal quarters in which one or more acquisitions with a total aggregate purchase price of $25 million or more has been executed, in which case the ratio of debt to EBITDA is to be no greater than 5.5 to 1.

The ratio of debt to capitalization (defined as net worth plus debt) must be no greater than 65 percent for each of Transco and Northwest Pipeline.

At December 31, 2020, we are in compliance with these covenants.

Commercial Paper Program

In 2018, we entered into a $4 billion commercial paper program. The maturities of the commercial paper notes vary but may not exceed 397 days from the date of issuance. The commercial paper notes are sold under customary

terms in the commercial paper market and are issued at a discount from par, or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. The net proceeds of issuances of the commercial paper notes are expected to be used to fund planned capital expenditures and for other general corporate purposes. At December 31, 2020 and 2019, no commercial paper was outstanding.

Cash Payments for Interest (Net of Amounts Capitalized)

Cash payments for interest (net of amounts capitalized) were $1.149 billion in 2020, $1.153 billion in 2019, and $1.064 billion in 2018.