DEBT AND CREDIT FACILITIES

12 Months Ended

Dec. 31, 2020


(millions of dollars)	2020		Weighted Average Interest Rate for the Year Ended December 31, 2020			2019	Weighted Average Interest Rate for the Year Ended December 31, 2019
TC PipeLines, LP
Senior Credit Facility due 2021	—		—			—	—
2013 Term Loan Facility due 2022	450		1.87	%		450	3.52	%
4.65% Unsecured Senior Notes due 2021	350	(c)	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)
5.69% Unsecured Senior Notes due 2035	150		5.69	%	(a)	150	5.69	%	(a)
3.12% Series A Senior Notes due 2030	175		3.12	%	(a)	—	—
PNGTS
Revolving Credit Facility due 2023	25		1.88	%		39	3.47	%
2.84% Series A Senior Notes due 2030	125		2.84	%	(a)	—	—
Tuscarora
Unsecured Term Loan due 2021	23		2.13	%		23	3.39	%
North Baja
Unsecured Term Loan due 2021	50		1.70	%		50	3.34	%
	2,198					2,012
Less: unamortized debt issuance costs and debt discount	7					9
Less: current portion	423	(b)				123
	1,768					1,880

(a)Fixed interest rate.

(b)Includes the Partnership's 4.65% Unsecured Senior Notes due June 15, 2021, Tuscarora’s Unsecured Term Loan due August 20, 2021 and North Baja's Unsecured Term Loan due December 19, 2021.

(c)Refer to Note 21- Subsequent events for more details on the Partnership's announcement on its intention to exercise its option to redeem this Unsecured Senior Notes at March 15, 2021.

TC PipeLines, LP

The Partnership’s Senior Credit Facility consists of a $500 million senior revolving credit facility with a banking syndicate, under which no borrowings were outstanding at December 31, 2020, leaving $500 million available for future borrowing.

At the Partnership’s option, the interest rate on the outstanding borrowings under the Senior Credit Facility may be the lenders’ base rate or LIBOR plus, in either case, an applicable margin that is based on the Partnership’s long-term unsecured credit ratings. The Senior Credit Facility permits the Partnership to specify the portion of the borrowings to be covered by specific interest rate options and, for LIBOR-based borrowings, to specify the interest rate period. The Partnership is required to pay a commitment fee based on its credit rating and on the unused principal amount of the commitments under the Senior Credit Facility. The Senior Credit Facility has a feature whereby at any time, so long as no event of default has occurred and is continuing, the Partnership may request an increase in the Senior Credit Facility of up to $500 million, but no lender has an obligation to increase their respective share of the facility.

On September 29, 2017, the Partnership’s term loan credit facility under a term loan agreement (2013 Term Loan Facility) was amended to extend the maturity period through October 2, 2022. The 2013 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 U.S. federal funds rate and (iii) 1.00 percent above one-month LIBOR. The applicable margin for the term loan 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 1.00 percent for base rate borrowings.

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 additional 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 December 31, 2020, the variable interest rate exposure related to 2013 Term Loan Facility was hedged by fixed interest rate swap arrangements and our effective interest rate was 3.26 percent (2019 – 3.26 percent). Prior to hedging activities, the LIBOR-based interest rate was 1.40 percent at December 31, 2020 (December 31, 2019 – 2.94 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 has been executed, in which case the leverage ratio is to be no greater than 5.50 to 1.00. The leverage ratio was 3.85 to 1.00 as of December 31, 2020.

The Senior Credit Facility and the 2013 Term Loan Facility contain additional covenants that include restrictions on entering into mergers, consolidations and sales of assets, granting liens, material amendments to the Partnership Agreement, incurrence of additional debt by the Partnership’s subsidiaries and distributions to unitholders. Upon any breach of these covenants, amounts outstanding under the Senior Credit Facility and the 2013 Term Loan Facility may become immediately due and payable.

On May 25, 2017, the Partnership closed a $500 million public offering of senior unsecured notes bearing an interest rate of 3.90 percent maturing May 25, 2027. The net proceeds of $497 million were used to fund a portion of the 2017 acquisition of a 49.34 percent interest in Iroquois, together with an additional 11.81 percent interest in PNGTS. The indenture for the notes contains customary investment grade covenants.

PNGTS

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 leverage ratio was 1.99 to 1.00 as of December 31, 2020. The facility is being utilized by PNGTS primarily to fund the costs of its expansion projects and for general partnership purposes. As of December 31, 2020, $25 million was drawn on the Revolving Credit Facility and the LIBOR-based interest rate was 1.28 percent (December 31, 2019 - 2.99 percent).

On October 8, 2020, PNGTS entered into a Note Purchase and Private Shelf Agreement whereby PNGTS issued $125 million 10-year Series A Senior Notes (PNGTS Series A Notes) with a coupon rate of 2.84% per annum and entered into a 3 year private shelf agreement for an additional $125 million of Senior Notes (PNGTS Private Shelf Facility). The PNGTS Series A Notes do not require any principal payments until maturity on October 8, 2030. Proceeds from the PNGTS' Series A Note issuance were used to repay the outstanding balance of PNGTS' revolving credit facility and for general partnership purposes including funding growth capital expenditures. PNGTS expects to draw the remaining $125 million available under the PNGTS Private Shelf Facility by the end of the third quarter of 2021 to refinance amounts funded on its revolving credit facility for costs associated with the Westbrook XPress Project. The PNGTS Private Shelf Facility and PNGTS Series A Notes contain a covenant that limits total debt to no greater than 65 percent of PNGTS’ total capitalization and requires PNGTS to maintain a leverage ratio of no greater than 5.00 to 1.00. The ratio of debt to capitalization was 37 percent and the leverage ratio was 1.99 to 1.00 as of December 31, 2020.

GTN

On June 1, 2020, GTN's $100 million 5.29% Unsecured Senior Notes became due and were refinanced through a Note Purchase and Private Shelf Agreement whereby GTN issued $175 million of 10-year Series A Senior Notes (GTN Series A Notes) with a coupon rate of 3.12% per annum and entered into a 3-year private shelf agreement for an additional $75 million of Senior Notes (GTN Private Shelf Facility). The GTN Series A Notes do not require any principal payments until maturity on June 1, 2030. Proceeds from the GTN Series A Note issuance were used to repay the outstanding balance of the 5.29% Unsecured Senior Notes and the remaining proceeds is being used to fund the GTN XPress capital expenditures. GTN expects to draw the remaining $75 million available under the GTN Private Shelf Facility by the end of 2023, the estimated completion date of GTN XPress. The GTN Private Shelf Facility and GTN Series A Notes contain a covenant that limits total debt to no greater than 65 percent of total capitalization. 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 December 31, 2020 was 36.8 percent.

Tuscarora

On July 23, 2020, Tuscarora's $23 million variable rate Unsecured Term Loan (Unsecured Term Loan) was amended to extend the maturity date to August 20, 2021 under generally the same terms. 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 December 31, 2020, the ratio was 31.16 to 1.00.

The LIBOR-based interest rate applicable to Tuscarora’s Unsecured Term Loan Facility was 2.15 percent at December 31, 2020 (December 31, 2019 - 2.82 percent).

North Baja

On December 19, 2018, North Baja entered into a $50 million unsecured variable rate term loan facility, which matures on December 19, 2021. The net proceeds were used for general partnership purposes. The variable interest rate is based on LIBOR plus an applicable margin. The LIBOR-based interest rate on this term loan facility was 1.23 percent at December 31, 2020 (December 31, 2019 - 2.77 percent). 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 December 31, 2020 is 40.8 percent.

Partnership (TC PipeLines, LP and its subsidiaries)

At December 31, 2020, 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 Partnership Agreement, incurring additional debt and distributions to unitholders.

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


(millions of dollars)
2021			423
2022			450
2023			25
2024			—
2025			350
Thereafter			950
			2,198