CREDIT FACILITIES AND LONG-TERM DEBT

9 Months Ended

Sep. 30, 2013

CREDIT FACILITIES AND LONG-TERM DEBT

CREDIT FACILITIES AND LONG-TERM DEBT

NOTE 5        CREDIT FACILITIES AND LONG-TERM DEBT

(unaudited)
(millions of dollars)	September 30, 2013	December 31, 2012(a)
Senior Credit Facility due 2017	350	312
Term Loan Facility due 2018	500	-
4.65% Unsecured Senior Notes due 2021	349	349
5.09% Unsecured Senior Notes due 2015	75	75
5.29% Unsecured Senior Notes due 2020	100	100
5.69% Unsecured Senior Notes due 2035	150	150
3.82% Series D Senior Notes due 2017	27	27
	1,551	1,013
Less: current portion of long-term debt	3	3
	1,548	1,010

(a)     Recast as discussed in Note 2 and Note 4.

The Partnership’s Senior Credit Facility consists of a $500 million senior revolving credit facility with a banking syndicate, maturing November 20, 2017, under which $350 million was outstanding at September 30, 2013 (December 31, 2012 - $312 million), leaving $150 million available for future borrowing.

The London Interbank Offered Rate (LIBOR) based interest rate on the Senior Credit Facility averaged 1.44 and 1.45 percent for the three and nine months ended September 30, 2013, respectively (2012 – 1.62 and 1.63 percent). The LIBOR-based interest rate was 1.44 percent at September 30, 2013 (December 31, 2012 – 1.47 percent).

On July 1, 2013, the Partnership entered into a term loan agreement with a syndicate of lenders for a $500 million term loan credit facility (Term Loan Facility). On July 2, 2013, the Partnership borrowed $500 million under the Term Loan Facility to pay a portion of the purchase price of the 2013 Acquisition. The Term Loan Facility has a term of five years, and all amounts outstanding are due and payable on July 1, 2018. Borrowings under the Term Loan Facility bears interest based, at the Partnership’s election, on the LIBOR or the base rate plus, in either case, an applicable margin. The base rate equals the highest of (i) SunTrust Bank’s prime rate, (ii) 0.50 percent above the federal funds rate and (iii) 1.00 percent above one-month LIBOR. The applicable margin for the term loans is based on the Partnership’s senior debt rating and ranges between 1.125 percent and 2.00 percent for LIBOR borrowings and 0.125 percent and 1.000 percent for base rate borrowings.

The LIBOR based interest rate on the Term Loan Facility averaged 1.44 percent for the three months ended September 30, 2013. After hedging activity, the interest rate incurred on the Term Loan Facility averaged 1.56 percent for the three months ended September 30, 2013. Prior to hedging activities, the LIBOR-based interest rate was 1.44 percent at September 30, 2013.

At September 30, 2013, the Partnership was in compliance with its financial covenants, in addition to the other covenants which include restrictions on entering into mergers, consolidations and sales of assets, granting liens, material amendments to the Second Amended and Restated Agreement of Limited Partnership (Partnership Agreement), incurring additional debt and distributions to unitholders.

Series D Senior Notes are secured by Tuscarora’s transportation contracts, supporting agreements and substantially all of Tuscarora’s property. The note purchase agreement contains certain provisions that include, among other items, limitations on additional indebtedness and distributions to partners.

The principal repayments required on the long-term debt are as follows:

(unaudited)
(millions of dollars)
2013	3
2014	4
2015	79
2016	4
2017	362
Thereafter	1,099
	1,551