Debt Obligations |
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Debt Obligations | Note 9 — Debt Obligations
The following table shows the range of interest rates and weighted average interest rate incurred on variable-rate debt obligations during the nine months ended September 30, 2018:
Compliance with Debt Covenants
As of September 30, 2018, we were in compliance with the covenants contained in our various debt agreements.
Senior Unsecured Notes
In April 2018, the Partnership issued $1.0 billion aggregate principal amount of 5⅞% senior notes due April 2026 (the “5⅞% Senior Notes due 2026”). The Partnership used the net proceeds of $991.9 million after costs from this offering to repay borrowings under its credit facilities and for general partnership purposes. The 5⅞% Senior Notes due 2026 are unsecured senior obligations that have substantially the same terms and covenants as the Partnership’s other senior notes.
TRC Revolver Amendment
In June 2018, we entered into an agreement to amend the TRC Revolver to extend the maturity date from February 2020 to June 2023. The available commitments of $670.0 million and our ability to request additional commitments of $200.0 million remained unchanged. The TRC Revolver continues to bear interest costs that are dependent on the ratio of non-Partnership consolidated funded indebtedness to consolidated adjusted EBITDA, as defined in the TRC Revolver, and the covenants remained substantially the same.
We incurred a loss of $0.7 million to partially write off debt issuance costs associated with the TRC Revolver as a result of a change in syndicate members. The remaining debt issuance costs, along with debt issuance costs incurred with this amendment, will be amortized on a straight-line basis over the TRC Revolver’s new term.
TRP Revolver Amendment
In June 2018, the Partnership entered into an agreement to amend and restate the TRP Revolver, which extended the maturity date from October 2020 to June 2023, increased available commitments from $1.6 billion to $2.2 billion and lowered the applicable margin range and commitment fee range used in the calculation of interest. The Partnership’s ability to request additional commitments of $500.0 million remained unchanged. The TRP Revolver bears interest, at the Partnership’s option, either at the base rate or the Eurodollar rate. The base rate is equal to the highest of: (i) Bank of America’s prime rate; (ii) the federal funds rate plus 0.5%; or (iii) the one-month LIBOR rate plus 1.0%, plus an applicable margin (a) before the collateral release date, ranging from 0.25% to 1.25% dependent on the Partnership’s ratio of consolidated funded indebtedness to consolidated adjusted EBITDA and (b) upon and after the collateral release date, ranging from 0.125% to 0.75% dependent on the Partnership’s non-credit-enhanced senior unsecured long-term debt ratings. The Eurodollar rate is equal to LIBOR rate plus an applicable margin (i) before the collateral release date, ranging from 1.25% to 2.25% dependent on the Partnership’s ratio of consolidated funded indebtedness to consolidated adjusted EBITDA and (ii) upon and after the collateral release date, ranging from 1.125% to 1.75% dependent on the Partnership’s non-credit-enhanced senior unsecured long-term debt ratings. The Partnership is required to pay a commitment fee equal to an applicable rate ranging from (a) before the collateral release date, 0.25% to 0.375% (dependent on the Partnership’s ratio of consolidated funded indebtedness to consolidated adjusted EBITDA) and (b) upon and after the collateral release date, 0.125% to 0.35% (dependent on the Partnership’s non-credit-enhanced senior unsecured long-term debt ratings) times the actual daily average unused portion of the TRP Revolver. Additionally, issued and undrawn letters of credit bear interest at an applicable margin (i) before the collateral release date, ranging from 1.25% to 2.25% dependent on the Partnership’s ratio of consolidated funded indebtedness to consolidated adjusted EBITDA and (ii) upon and after the collateral release date, ranging from 1.125% to 1.75% dependent on the Partnership’s non-credit-enhanced senior unsecured long-term debt ratings. The TRP Revolver’s covenants remained substantially the same.
During the nine months ended September 30, 2018, the Partnership incurred a loss of $1.3 million to partially write-off debt issuance costs associated with the TRP Revolver amendment as a result of a change in syndicate members. The remaining debt issuance costs, along with debt issuance costs incurred with this amendment, will be amortized on a straight-line basis over the TRP Revolver’s new term. |