CONSOLIDATED DEBT (Notes)

9 Months Ended

Sep. 30, 2020

Consolidated debt is as follows (in millions):


	Average Rate (1)	September 30, 2020		December 31, 2019
LONG-TERM DEBT:
Revolving credit facility	2.66%	$	240	$	183
Term loan, net	3.23%	377		384
Credit Facilities subtotal		617		567
Senior Notes, net of deferred financing costs		1,183		1,186
Tax-Exempt Bonds, net of deferred financing costs		539		539
China venture loan		9		—
Equipment financing arrangements		80		85
Finance Leases (2)		7		6
Total long-term debt		2,435		2,383
Less: Current portion		(18)		(17)
Noncurrent long-term debt		$	2,417	$	2,366

PROJECT DEBT:
Total project debt, net of deferred financing costs and unamortized debt premium		$	127	$	133
Less: Current portion		(9)		(8)
Noncurrent project debt		$	118	$	125

TOTAL CONSOLIDATED DEBT		$	2,562	$	2,516
Less: Current debt		(27)		(25)
TOTAL NONCURRENT CONSOLIDATED DEBT		$	2,535	$	2,491

(1)As of September 30, 2020 and December 31, 2019, we entered into interest rate swap agreements to swap to a fixed rate the variable portion of our interest rate expense on $200 million of notional amount of debt under the Credit Facilities. See Note 12. Derivative Instruments for further information.

(2)Excludes Union County WtE facility finance lease which is presented within project debt.

Our subsidiary, Covanta Energy, has a senior secured credit facility consisting of a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan”). The nature and terms of our Credit Facilities, Senior Notes, Tax-Exempt Bonds, project debt and other long-term debt are described in detail in Note 15. Consolidated Debt in our 2019 Annual Report on Form 10-K.

Tax Exempt Bonds (the "NFA 2020 Bonds")

In August 2020, we entered into a loan agreement with the National Finance Authority ("NFA"), a component unit of the Business Finance Authority of New Hampshire, under which they agreed to issue $39.4 million 3.625% Resource Recovery Refunding Revenue Bonds Series 2020A, maturing on July 1, 2043, and $90 million 3.750% Resource Recovery Refunding Revenue Bonds Series 2020B, maturing on July 1, 2045 (collectively the "NFA Series 2020 Bonds").

The net proceeds of the NFA Series 2020 Bonds were used to redeem at par the outstanding principal balance of our previously outstanding New Jersey Series 2015A and Pennsylvania Series 2015A bonds.

In connection with the refinancing transaction, we recorded deferred financing costs of $1 million, which are being amortized through July 2, 2040, the mandatory tender date. In addition, during the three and nine months ended September 30, 2020, we recorded a $1 million write-off of unamortized issuance costs associated with the previously outstanding debt, which was recognized as a Loss on extinguishment of debt in our condensed consolidated statement of operations. The NFA Series 2020 Bonds are our senior unsecured obligations and are not guaranteed by any of our subsidiaries.

Senior Notes due 2030 (the "2030 Senior Notes")

In August 2020, we issued $400 million aggregate principal amount of Senior Notes due 2030. The 2030 Senior Notes bear interest at 5.00% per annum, payable semi-annually on March 1 and September 1 of each year commencing on March 1, 2021, and will mature on September 1, 2030. In connection with this issuance, we recognized $7 million of deferred financing costs which will be amortized over the term of the 2030 Senior Notes. Net proceeds from the sale of the 2030 Senior Notes were approximately $394 million and were used, along with cash on hand and direct borrowings under our Revolving Credit Facility, to fund the optional redemption of all of our 5.875% Senior Notes due 2024 ("2024 Senior Notes") and to pay transaction fees and expenses and accrued interest.

During the three and nine months ended September 30, 2020, in connection with the redemption of the 2024 Senior Notes, we recorded a Loss on extinguishment of debt of $10 million in our condensed consolidated statements of operations consisting of $8 million of redemption premium and a $2 million write-off of remaining deferred financing costs.

The 2030 Senior Notes constitute general unsecured obligations of the Company and will rank equal in right of payment with all existing and future senior unsecured indebtedness of the Company. The 2030 Senior Notes are effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and are structurally subordinated in right of payment to all of the existing and future liabilities of the Company’s subsidiaries and their indebtedness and guarantees under the existing credit facilities of its subsidiary, Covanta Energy, LLC. The 2030 Senior Notes are not guaranteed by any of the Company’s subsidiaries.

Zhao County, China Venture Loan

In January 2020, in connection with our Zhao County agreement, we obtained local equity bridge financing in the amount of RMB 61 million ($9 million). This financing is due to be repaid in January 2022 and is collateralized through a pledge of our equity in the project. We contributed the entire amount of the proceeds to the project in the form of a shareholder loan. See Note 3. New Business and Asset Management for further information.

Revolving Credit Facility

As of September 30, 2020, we had unutilized capacity under the Revolving Credit Facility as follows (in millions):


	Total Facility Commitment		Expiring	Direct Borrowings		Outstanding Letters of Credit		Unutilized Capacity
Revolving Credit Facility	$	900	2023	$	240	$	216	$	444

Credit Agreement Covenants

The loan documentation governing the Credit Facilities contains various affirmative and negative covenants, as well as financial maintenance covenants (financial ratios), that limit our ability to engage in certain types of transactions. We were in compliance with all of the affirmative and negative covenants under the Credit Facilities as of September 30, 2020.