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DEBT
9 Months Ended
Sep. 30, 2020
DEBT [Abstract]  
DEBT Note 7: Debt

Debt is detailed as follows:

Effective

September 30

December 31

September 30

in thousands

Interest Rates

2020

2019

2019

Short-term Debt

Bank line of credit expires 2025 1

$                  0 

$                0 

$                0 

Total short-term debt

$                  0 

$                0 

$                0 

Long-term Debt

Bank line of credit expires 2025 1

$                  0 

$                0 

$                0 

Floating-rate notes due 2020

0 

250,000 

250,000 

Floating-rate notes due 2021

1.10%

500,000 

500,000 

500,000 

8.85% notes due 2021

8.88%

6,000 

6,000 

6,000 

4.50% notes due 2025

4.65%

400,000 

400,000 

400,000 

3.90% notes due 2027

4.00%

400,000 

400,000 

400,000 

3.50% notes due 2030

3.94%

750,000 

0 

0 

7.15% notes due 2037

8.05%

129,239 

129,239 

129,239 

4.50% notes due 2047

4.59%

700,000 

700,000 

700,000 

4.70% notes due 2048

5.42%

460,949 

460,949 

460,948 

Other notes

0.86%

11,718 

185 

191 

Total long-term debt - face value

$    3,357,906 

$  2,846,373 

$  2,846,378 

Unamortized discounts and debt issuance costs

(71,399)

(62,033)

(63,286)

Total long-term debt - book value

$    3,286,507 

$  2,784,340 

$  2,783,092 

Less current maturities

509,435 

25 

24 

Total long-term debt - reported value

$    2,777,072 

$  2,784,315 

$  2,783,068 

Estimated fair value of long-term debt

$    3,341,097 

$  3,073,693 

$  3,036,337 

1

Borrowings on the bank line of credit are classified as short-term if we intend to repay within twelve months and as long-term if we have the intent and ability to extend payment beyond twelve months.

Discounts and debt issuance costs are amortized using the effective interest method over the terms of the respective notes resulting in $6,028,000 and $3,730,000 of net interest expense for these items for the nine months ended September 30, 2020 and 2019, respectively.

LINE OF CREDIT

In September 2020, we executed a new five-year unsecured line of credit of $1,000,000,000, incurring $4,632,000 of transaction costs. The line of credit contains affirmative, negative and financial covenants customary for an unsecured investment-grade facility. There are two primary negative covenants: 1) a limit on our ability to incur secured debt, and 2) a maximum ratio of debt to EBITDA of 3.50:1 (upon certain acquisitions, the maximum ratio can be 3.75:1 for four quarters). As of September 30, 2020, we were in compliance with the line of credit covenants.

Borrowings on our line of credit are classified as short-term if we intend to repay within twelve months and as long-term if we have the intent and ability to extend repayment beyond twelve months. Borrowings bear interest, at our option, at either LIBOR plus a credit margin ranging from 1.125% to 1.875%, or Truist Bank’s base rate (generally, its prime rate) plus a credit margin ranging from 0.125% to 0.875%. The credit margin for both LIBOR and base rate borrowings is determined by our credit ratings. Standby letters of credit, which are issued under the line of credit and reduce availability, are charged a fee equal to the credit margin for LIBOR borrowings plus 0.175%. We also pay a commitment fee on the daily average unused amount of the line of credit that ranges from 0.125% to 0.275% determined by our credit ratings. As of September 30, 2020, the credit margin for LIBOR borrowings was 1.375%, the credit margin for base rate borrowings was 0.375%, and the commitment fee for the unused amount was 0.175%.

In conjunction with the September 2020 line of credit execution, we terminated our $750,000,000 364-day delayed draw term loan executed in April 2020. During the second quarter, we had borrowed and repaid $250,000,000 on this delayed draw term loan leaving $500,000,000 available for future borrowings prior to its termination.

As of September 30, 2020, our available borrowing capacity under the line of credit was $943,371,000. Utilization of the borrowing capacity was as follows:

none was borrowed

$56,629,000 was used to provide support for outstanding standby letters of credit

TERM DEBT

All of our $3,357,906,000 (face value) of term debt is unsecured. $3,346,188,000 of such debt is governed by three essentially identical indentures that contain customary investment-grade type covenants. The primary covenant in all three indentures limits the amount of secured debt we may incur without ratably securing such debt. As of September 30, 2020, we were in compliance with all term debt covenants.

In May 2020, we issued $750,000,000 of 3.50% senior notes due 2030. Total proceeds were $741,417,000 (net of discounts and transaction costs). $250,000,000 of the proceeds were used to retire the $250,000,000 floating rate notes due June 2020. The remainder of the proceeds, together with cash on hand, will be used to retire the $500,000,000 floating rate notes due March 2021.

STANDBY LETTERS OF CREDIT

We provide, in the normal course of business, certain third-party beneficiaries with standby letters of credit to support our obligations to pay or perform according to the requirements of an underlying agreement. Such letters of credit typically have an initial term of one year, typically renew automatically, and can only be modified or canceled with the approval of the beneficiary. All of our standby letters of credit are issued by banks that participate in our $1,000,000,000 line of credit, and reduce the borrowing capacity thereunder. Our standby letters of credit as of September 30, 2020 are summarized by purpose in the table below:

in thousands

Standby Letters of Credit

Risk management insurance

$       49,531 

Reclamation/restoration requirements

7,098 

Total

$       56,629