NOTE 7 DEBT AND CREDIT FACILITIES

(unaudited) (millions of dollars)	March 31, 2018		Weighted Average Interest Rate for the Three Months Ended March 31, 2018		December 31, 2017		Weighted Average Interest Rate for the Year Ended December 31, 2017

TC PipeLines, LP
Senior Credit Facility due 2021	165		2.85	%	185		2.41	%
2013 Term Loan Facility due 2022	500		2.86	%	500		2.33	%
2015 Term Loan Facility due 2020	170		2.75	%	170		2.22	%
4.65% Unsecured Senior Notes due 2021	350		4.65	%(a)	350		4.65	%(a)
4.375% Unsecured Senior Notes due 2025	350		4.375	%(a)	350		4.375	%(a)
3.90 % Unsecured Senior Notes due 2027	500		3.90	%(a)	500		3.90	%(a)
GTN
5.29% Unsecured Senior Notes due 2020	100		5.29	%(a)	100		5.29	%(a)
5.69% Unsecured Senior Notes due 2035	150		5.69	%(a)	150		5.69	%(a)
Unsecured Term Loan Facility due 2019	55		2.55	%	55		2.02	%
PNGTS
5.90% Senior Secured Notes due 2018	24	(b)	5.90	%(a)	30	(c )	5.90	%(a)
Tuscarora
Unsecured Term Loan due 2020	25		2.73	%	25		2.27	%

	2,389				2,415
Less: unamortized debt issuance costs and debt discount	12				12
Less: current portion	45	(b)			51	(c)

	2,332				2,352

(a)

Fixed interest rate

(b)

Includes the PNGTS portion due at March 31, 2018 amounting to $6.1 million that was paid on April 2, 2018.

(c)

Includes the PNGTS portion due at December 31, 2017 amounting to $5.8 million that was paid on January 2, 2018.

TC PipeLines, LP

The Partnership’s Senior Credit Facility consists of a $500 million senior revolving credit facility with a banking syndicate, maturing November 10, 2021, under which $165 million was outstanding at March 31, 2018 (December 31, 2017 - $185 million), leaving $335 million available for future borrowing. The LIBOR-based interest rate on the Senior Credit Facility was 2.92 percent at March 31, 2018 (December 31, 2017 — 2.62 percent).

As of March 31, 2018, the variable interest rate exposure related to the 2013 Term Loan Facility was hedged by fixed interest rate swap arrangements and our effective interest rate was 2.31 percent (December 31, 2017 — 2.31 percent). Prior to hedging activities, the LIBOR-based interest rate on the 2013 Term Loan Facility was 2.92 percent at March 31, 2018 (December 31, 2017 — 2.62 percent).

The LIBOR-based interest rate on the 2015 Term Loan Facility was 2.81 percent at March 31, 2018 (December 31, 2017 — 2.51 percent).

The 2013 Term Loan Facility and the 2015 Term Loan Facility (collectively, the 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 5.00 to 1.00 for each 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 4.56 to 1.00 as of March 31, 2018.

GTN

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 March 31, 2018 was 44 percent. The LIBOR-based interest rate on the GTN’s Unsecured Term Loan Facility was 2.61 percent at March 31, 2018 (December 31, 2017 — 2.31 percent).

PNGTS

PNGTS’ Senior Secured Notes are secured by the PNGTS long-term firm shipper contracts and its partners’ pledge of their equity and a guarantee of debt service for six months. PNGTS is restricted under the terms of its note purchase agreement from making cash distributions unless certain conditions are met. Before a distribution can be made, the debt service reserve account must be fully funded and PNGTS’ debt service coverage ratio for the preceding and succeeding twelve months must be 1.30 or greater. At March 31, 2018, the debt service coverage ratio was 1.65 for the twelve preceding months and 2.14 for the twelve succeeding months. Therefore, PNGTS was not restricted to make any cash distributions.

On April 5, 2018, PNGTS entered into a revolving credit agreement under which PNGTS has the ability to borrow up to $125 million with a variable interest rate based on LIBOR. The credit agreement matures on April 5, 2023 and requires PNGTS to maintain a leverage ratio not greater than 5.00 to 1.00. The facility will be utilized to fund the costs of the PXP expansion project, including the repayment of the existing 5.90% Senior Notes.

Tuscarora

Tuscarora’s Unsecured Term Loan contains a covenant that requires 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 or equal to 3.00 to 1.00. As of March 31, 2018, the ratio was 11.2 to 1.00.

The LIBOR-based interest rate on the Tuscarora’s Unsecured Term Loan Facility was 2.79 percent at March 31, 2018 (December 31, 2017 — 2.49 percent).

At March 31, 2018, 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. Refer also to Note 19 for important information relating to distribution reduction to retain cash that will be used to fund ongoing capital expenditures and the repayment of debt to levels that prudently manage our financial metrics in response to the potential negative impact of the 2018 FERC Actions on our future operating performance and cashflows.

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

(unaudited)
(millions of dollars)

2018		45
2019		36
2020		293
2021		515
2022		500
Thereafter		1,000

		2,389