NOTE 5DEBT AND CREDIT FACILITIES

(unaudited)	September 30,	December 31,	Weighted Average Interest Rate for the Nine Months Ended
(millions of dollars)	2016	2015	September 30, 2016

TC PipeLines, LP Senior Credit Facility due 2017	220	200	1.70	%
TC PipeLines, LP 2013 Term Loan Facility due 2018	500	500	1.71	%
TC PipeLines, LP 2015 Term Loan Facility due 2018	170	170	1.60	%
TC PipeLines, LP 4.65% Unsecured Senior Notes due 2021	350	350	4.65	%(b)
TC PipeLines, LP 4.375% Unsecured Senior Notes due 2025	350	350	4.375	%(b)
GTN 5.29% Unsecured Senior Notes due 2020	100	100	5.29	%(b)
GTN 5.69% Unsecured Senior Notes due 2035	150	150	5.69	%(b)
GTN Unsecured Term Loan Facility due 2019	65	75	1.40	%
Tuscarora Unsecured Term Loan due 2019	10	—	1.58	%
Tuscarora 3.82% Series D Senior Notes due 2017	16	16	3.82	%(b)

	1,931	1,911
Less: unamortized debt issuance costs and debt discount (a)	8	8
Less: current portion	27	14

	1,896	1,889

^(a)

As a result of the application of ASU No. 2015-03 and similar to the presentation of debt discounts, debt issuance costs of $7 million at December 31, 2015 previously reported as other assets in the balance sheet were reclassified as an offset against debt. Refer to Note 3, Accounting Pronouncements.

^(b)

Fixed interest rate.

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 $220 million was outstanding at September 30, 2016 (December 31, 2015 - $200 million), leaving $280 million available for future borrowing.

After hedging activity, the interest rate incurred on the 2013 Term Loan Facility averaged 2.27 percent and 2.31 percent for the three and nine months ended September 30, 2016, respectively (2015 — 1.85 percent and 1.84 percent). Prior to hedging activities, the LIBOR-based interest rate was 1.78 percent at September 30, 2016 (December 31, 2015 — 1.50 percent).

The 2013 Term Loan Facility and the 2015 Term Loan Facility (Term Loan Facilities) and the Senior Credit Facility require the Partnership to maintain a certain leverage ratio (debt to adjusted cash flow [net income plus cash distributions received, extraordinary losses, interest expense, expense for taxes paid or accrued, and depreciation and amortization expense less equity earnings and extraordinary gains]) no greater than:

5.50 to 1.00 for the quarter ending September 30, 2016;

5.00 to 1.00 for the quarter ending December 31, 2016 and each subsequent fiscal quarter, except for the fiscal quarter and the two following fiscal quarters in which one or more acquisitions has been executed, in which case the leverage ratio is to be no greater than 5.50 to 1.00.

The leverage ratio was 4.23 to 1.00 as of September 30, 2016.

GTN’s Unsecured Senior Notes, along with GTN’s Unsecured Term Loan Facility contain a covenant that limits total debt to no greater than 70 percent of GTN’s total capitalization. GTN’s total debt to total capitalization ratio at September 30, 2016 was 43.9 percent.

On April 29, 2016, Tuscarora entered into a $9.5 million unsecured variable rate term loan facility which requires yearly principal payments until its maturity on April 29, 2019. The variable interest is based on LIBOR plus an applicable margin and was 1.66 percent at September 30, 2016.

Tuscarora’s Series D Senior Notes, which require yearly principal payments until maturity, are secured by Tuscarora’s transportation contracts, supporting agreements and substantially all of Tuscarora’s property. The note purchase agreements contain certain provisions that include, among other items, limitations on additional indebtedness and distributions to partners. The Series D Senior Notes contain a covenant that limits total debt to no greater than 45 percent of Tuscarora’s total capitalization. Tuscarora’s total debt to total capitalization ratio at September 30, 2016 was 24.1 percent. Additionally, the Series D Senior Notes require Tuscarora to maintain a Debt Service Coverage Ratio (cash available from operations divided by a sum of interest expense and principal payments) of greater than 3.00 to 1.00. The ratio was 4.35 to 1.00 as of September 30, 2016.

At September 30, 2016, 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 Third Amended and Restated Agreement of Limited Partnership (Partnership Agreement), incurring additional debt and distributions to unitholders.

The principal repayments required of the Partnership on its debt are as follows:

(unaudited)
(millions of dollars)

2016		4
2017		243
2018		691
2019		43
2020		100
Thereafter		850

		1,931