8. DEBT AND INTEREST EXPENSE

At March 31, 2014, debt consisted of $500.0 million aggregate principal amount of 5.375% Senior Notes due 2021 (the “2021 Notes”), $670.0 million aggregate principal amount of 4.000% Senior Notes due 2022 (the “2022 Notes”), $350.0 million aggregate principal amount of 2.600% Senior Notes due 2018 (the “2018 Notes”), and $400.0 million aggregate principal amount of 5.450% Senior Notes due 2044 (the “2044 Notes”). The two tranches of the 2022 Notes, issued in June and October 2012, were issued under the same indenture and are considered a single class of securities. The two tranches of the 2018 Notes, issued in August 2013 and March 2014, were issued under the same indenture and are considered a single class of securities.

The following table presents WES’s outstanding debt as of March 31, 2014, and December 31, 2013:



	March 31, 2014						December 31, 2013
thousands	Principal		Carrying Value		Fair Value ⁽¹⁾		Principal		Carrying Value		Fair Value ⁽¹⁾
5.375% Senior Notes due 2021	$	500,000	$	495,305	$	548,287	$	500,000	$	495,173	$	533,615
4.000% Senior Notes due 2022	670,000		673,192		666,755		670,000		673,278		641,237
2.600% Senior Notes due 2018	350,000		350,567		352,159		250,000		249,718		247,988
5.450% Senior Notes due 2044	400,000		393,775		406,664		—		—		—
Total debt outstanding	$	1,920,000	$	1,912,839	$	1,973,865	$	1,420,000	$	1,418,169	$	1,422,840


⁽¹⁾	Fair value is measured using Level 2 inputs.

Debt activity. The following table presents the debt activity for the three months ended March 31, 2014:



thousands	Carrying Value
Balance at December 31, 2013	$	1,418,169
Revolving credit facility borrowings	430,000
Issuance of 5.450% Senior Notes due 2044	400,000
Issuance of 2.600% Senior Notes due 2018	100,000
Repayments of revolving credit facility	(430,000		)
Other	(5,330		)
Balance at March 31, 2014	$	1,912,839

WES Senior Notes. The 2044 Notes were offered at a price to the public of 98.443% of the face amount. Including the effects of the issuance and underwriting discounts, the effective interest rate of the 2044 Notes is 5.632%. Interest is paid semi-annually on April 1 and October 1 of each year. Proceeds (net of underwriting discount of $3.5 million, original issue discount and debt issuance costs) were used to repay amounts then outstanding under WES’s senior unsecured revolving credit facility (“WES RCF”) and for general partnership purposes.

The 2018 Notes issued in March 2014 were offered at a price to the public of 100.857% of the face amount. Including the effects of the issuance premium for the March 2014 offering, the issuance discount for the August 2013 offering of 2018 Notes, and underwriting discounts, the effective interest rate of the 2018 Notes is 2.742%. Interest is paid semi-annually on February 15 and August 15 of each year. Proceeds (net of underwriting discount of $0.6 million, original issue premium and debt issuance costs) were used to repay amounts then outstanding under the WES RCF and for general partnership purposes.

At March 31, 2014, WES was in compliance with all covenants under the indentures governing the 2021 Notes, 2022 Notes, 2018 Notes, and 2044 Notes.

8. DEBT AND INTEREST EXPENSE (CONTINUED)

WES revolving credit facility. In February 2014, WES entered into an amended and restated $1.2 billion senior unsecured WES RCF, which is expandable to a maximum of $1.5 billion. Subsequently, WES borrowed $350.0 million under the WES RCF to fund the acquisition of the TEFR Interests. The WES RCF replaced an $800.0 million credit facility, which was originally entered into in March 2011. The WES RCF matures in February 2019 and bears interest at London Interbank Offered Rate (“LIBOR”), plus applicable margins ranging from 0.975% to 1.45%, or an alternate base rate equal to the greatest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5%, or (c) LIBOR plus 1%, in each case plus applicable margins currently ranging from zero to 0.45%, based upon WES’s senior unsecured debt rating. The interest rate on the WES RCF was 1.45% at March 31, 2014. At December 31, 2013, the interest rate on the previous credit facility was 1.67%. WES is required to pay a quarterly facility fee currently ranging from 0.15% to 0.30% of the commitment amount (whether used or unused), based upon its senior unsecured debt rating. The facility fee rate was 0.20% and 0.25% at March 31, 2014, and December 31, 2013, respectively.

As of March 31, 2014, WES had no outstanding borrowings, $12.8 million in outstanding letters of credit and $1.19 billion available for borrowing under the WES RCF. At March 31, 2014, WES was in compliance with all covenants under the WES RCF.

The 2021 Notes, 2022 Notes, 2018 Notes, 2044 Notes and obligations under the WES RCF are recourse to WES GP. WES GP is indemnified by a wholly owned subsidiary of Anadarko, Western Gas Resources, Inc. (“WGRI”), against any claims made against WES GP under the 2022 Notes, 2021 Notes, and/or the WES RCF.

In connection with the acquisitions of the Non-Operated Marcellus Interest, the Anadarko-Operated Marcellus Interest, and the TEFR Interests, WES GP and other wholly owned subsidiaries of Anadarko entered into indemnification agreements, whereby such subsidiaries agreed to indemnify WES GP for any recourse liability it may have for WES RCF borrowings, or other debt financing, attributable to the acquisitions of the Non-Operated Marcellus Interest, the Anadarko-Operated Marcellus Interest, and the TEFR Interests. These indemnification agreements apply to the 2044 Notes, 2018 Notes, and/or WES RCF borrowings outstanding related to the aforementioned acquisitions.

WES GP, the other indemnifying subsidiaries of Anadarko and WGRI also amended and restated the indemnity agreements between them to (i) conform language among all the indemnification agreements and (ii) reduce the amount for which WGRI would indemnify WES GP by an amount equal to any amounts payable to the WES GP under the indemnification agreements related to the acquisitions of the Non-Operated Marcellus Interest, the Anadarko-Operated Marcellus Interest, and the TEFR Interests.

WGP working capital facility. On November 1, 2012, WGP entered into a $30.0 million working capital facility (the “WGP WCF”) with Anadarko as the lender. The facility is available exclusively to fund WGP’s working capital borrowings. Borrowings under the facility will mature on November 1, 2017, and will bear interest at LIBOR plus 1.50%. The interest rate was 1.65% and 1.67% at March 31, 2014, and December 31, 2013, respectively.

WGP is required to reduce all borrowings under the WGP WCF to zero for a period of at least 15 consecutive days during the twelve month period commencing on November 1, 2012, and during the twelve month period commencing on each anniversary thereof. As of March 31, 2014, WGP had no outstanding borrowings under the WGP WCF, and WGP was in compliance with all covenants under the WGP WCF.

Interest expense. The following table summarizes the amounts included in interest expense:



	Three Months Ended March 31,
thousands	2014			2013
Interest expense on long-term debt	$	16,135		$	13,939
Amortization of debt issuance costs and commitment fees	1,266			1,053
Capitalized interest	(3,440		)	(3,181		)
Interest expense	$	13,961		$	11,811