DEBT AND CREDIT FACILITIES

9 Months Ended

Sep. 30, 2019

DEBT AND CREDIT FACILITIES

DEBT AND CREDIT FACILITIES

NOTE 7     DEBT AND CREDIT FACILITIES

		Weighted Average				Weighted Average
		Interest Rate for the				Interest Rate for the
(unaudited)		Nine months ended			December 31,	Year Ended
(millions of dollars)	September 30, 2019	September 30, 2019			2018	December 31, 2018
TC PipeLines, LP
Senior Credit Facility due 2021	—	—			40	3.14	%
2013 Term Loan Facility due 2022	450	3.66	%		500	3.23	%
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	—	—			35	2.93	%
PNGTS
Revolving Credit Facility due 2023	30	3.65	%		19	3.55	%
Tuscarora
Unsecured Term Loan due 2020	23	3.54	%		24	3.10	%
North Baja
Unsecured Term Loan due 2021	50	3.48	%		50	3.54	%
	2,003				2,118
Less: unamortized debt issuance costs and debt discount	9				10
Less: current portion	123				36
	1,871				2,072

(a) Fixed interest rate

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. In March 2019, the Partnership repaid all amounts outstanding under its Senior Credit Facility and there was no outstanding balance at September 30, 2019 (December 31, 2018 - $40 million).

The LIBOR-based interest rate applicable to the Senior Credit Facility was 3.77 percent at December 31, 2018.

On June 26, 2019, the Partnership repaid $50 million of the principal balance under its 2013 Term Loan Facility using proceeds from Northern Border's special distribution (see Note 5). Additionally, in conjunction with this repayment, the Partnership also terminated an equivalent amount in interest rate swaps that were used to hedge this facility at a rate of 2.81 percent. As of September 30, 2019, the variable interest rate exposure related to the 2013 Term Loan Facility was hedged using interest rate swaps at an average rate of 3.26 percent (December 31, 2018 – 3.26 percent). Prior to hedging activities, the LIBOR-based interest rate on the 2013 Term Loan Facility was 3.35 percent at September 30, 2019 (December 31, 2018 - 3.60 percent).

The Senior Credit Facility and the 2013 Term Loan Facility require the Partnership to maintain a debt to adjusted cash flow leverage ratio of 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 have been executed, in which case the leverage ratio is to be no greater than 5.50 to 1.00. The leverage ratio was 2.79 to 1.00 as of September 30, 2019.

GTN

GTN’s Unsecured Senior Notes 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, 2019 was 39.8 percent.

During the three months ended June 30, 2019, GTN's Unsecured Term Loan Facility matured and was fully repaid using the Partnership's funds from operations. The LIBOR-based interest rate applicable to GTN’s Unsecured Term Loan Facility was 3.30 percent at December 31, 2018.

GTN's $100 million 5.29% Unsecured Senior Notes due June 1, 2020 are expected to be refinanced in full or at an amount based on the Partnership's preferred capitalization levels.

PNGTS

PNGTS’ Revolving Credit Facility requires PNGTS to maintain a leverage ratio not greater than 5.00 to 1.00. The leverage ratio was 0.5 to 1.00 as of September 30, 2019.

The LIBOR-based interest rate applicable to PNGTS’s Revolving Credit Facility was 3.35 percent at September 30, 2019 (December 31, 2018 - 3.60 percent).

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 September 30, 2019, the ratio was 9.01 to 1.00.

The LIBOR-based interest rate applicable to Tuscarora’s Unsecured Term Loan Facility was 3.23 percent at September 30, 2019 (December 31, 2018 - 3.47 percent).

Tuscarora's $23 million variable rate Unsecured Term Loan due August 21, 2020 is expected to be refinanced in full or at an amount based on the Partnership's preferred capitalization levels.

North Baja

North Baja’s Term Loan Facility contains a covenant that limits total debt to no greater than 70 percent of North Baja’s total capitalization. North Baja’s total debt to total capitalization ratio at September 30, 2019 was 38.94 percent.

The LIBOR-based interest rate applicable to North Baja’s Term Loan Facility was 3.18 percent at September 30, 2019 (December 31, 2018 - 3.54 percent).

Partnership (TC PipeLines, LP and its subsidiaries)

At September 30, 2019, 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 Fourth 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)	Principal Payments
2019	—
2020	123
2021	400
2022	450
2023	30
Thereafter	1,000
	2,003