Debt, Financing Arrangements, and Leases (Notes)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt, Financing Arrangements, and Leases

DEBT AND FINANCING ARRANGEMENTS

Long-Term Debt

Long-term debt, presented net of unamortized discount and unamortized debt issuance costs, consists of the following:

	December 31,
	2019			2018
	(Thousands of Dollars)
7.125% unsecured debentures due 2025	$	85,000		$	85,000
4.0% unsecured debentures due 2027	500,000			500,000
Debt issuance costs	(4,083		)	(4,507		)
Unamortized debt discount	(3,872		)	(4,325		)
Total long-term debt	$	577,045		$	576,168

There are no maturities applicable to long-term debt outstanding through 2024.

No property is pledged as collateral under any of our long-term debt.

Restrictive Debt Covenants

At December 31, 2019, none of our debt instruments restrict the amount of distributions to our parent, provided, however, that under the credit facility described below, we are restricted from making distributions to our parent during an event of default if we have directly incurred indebtedness under the credit facility. Our debt agreements contain restrictions on our ability to incur secured debt beyond certain levels.

Issuance and Retirement of Long-Term Debt

On August 24, 2018, we issued $250 million of 4.0 percent senior unsecured notes to investors in a private debt placement. The notes are an additional issuance of the existing 4.0 percent senior unsecured notes due 2027. In the fourth quarter of 2018, we filed a registration statement and completed an exchange of these notes for substantially identical new notes that are registered under the Securities Act of 1933, as amended.

We retired $250 million of 6.05 percent senior unsecured notes that matured on June 15, 2018.

Credit Facility

On July 13, 2018, we, along with Williams and Transco (the “borrowers”), the lenders named therein, and an administrative agent entered into a Credit Agreement with aggregate commitments available of $4.5 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. We and Transco are each subject to a $500 million borrowing sublimit. The facility made available under the Credit Agreement is initially available for five years from the Credit Agreement Effective Date (the “Maturity Date”). The borrowers may request an extension of the Maturity Date for an additional one-year period up to two times, to allow a Maturity Date as late as the seventh anniversary of the Credit Agreement Effective Date, subject to certain conditions. The Credit Agreement allows for same day swingline borrowings up to an aggregate amount of $200 million, subject to other utilization of the aggregate commitments under the Credit Agreement. Letter of credit commitments of $1.0 billion are, subject to the $500 million borrowing sublimit applicable to us and Transco, available to the borrowers. At December 31, 2019, no letters of credit have been issued and no loans to Williams were outstanding under the credit facility.

Measured as of December 31, 2019, we are in compliance with our financial covenant under the credit facility.

Various covenants may limit, among other things, a borrower’s and its material subsidiaries’ ability to grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, enter into certain affiliate transactions, make certain distributions during an event of default, enter into certain restrictive agreements, and allow any material change in the nature of its business.

If an event of default with respect to a borrower occurs under the credit facility, the lenders will be able to terminate the commitments for the respective borrowers and accelerate the maturity of any loans of the defaulting borrower under the credit facility agreement and exercise other rights and remedies.

Other than swing line loans, each time funds are borrowed, the applicable borrower may choose from two methods of calculating interest: a fluctuating base rate equal to Citibank N.A.'s alternate base rate plus an applicable margin or a periodic fixed rate equal to the London Interbank Offered Rate plus an applicable margin. We are required to pay a commitment fee based on the unused portion of the credit facility. The applicable margin and the commitment fee are determined by reference to a pricing schedule based on the applicable borrower's senior unsecured long-term debt ratings.

Williams participates in a commercial paper program, and Williams management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at anytime of $4.0 billion of unsecured commercial paper notes. At December 31, 2019, Williams had no outstanding commercial paper.