NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES

9 Months Ended

Sep. 30, 2019

NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES



Notes Payable	Sep 30, 2019			Dec 31, 2018
In millions	Sep 30, 2019			Dec 31, 2018
Commercial paper	$	—		$	10
Notes payable to banks and other lenders	441			288
Notes payable to related companies ¹	76			—
Total notes payable	$	517		$	298
Period-end average interest rates	4.92		%	8.28		%


1.	In addition, "Notes payable" for TDCC at September 30, 2019 includes a $418 million note payable to Dow Inc., which is not reflected in the table above. See Note 22 for additional information.



Long-Term Debt	2019 Average Rate		Sep 30, 2019			2018 Average Rate		Dec 31, 2018
In millions
Promissory notes and debentures:
Final maturity 2019	9.80	%	$	3		9.80	%	$	7
Final maturity 2020	8.44	%	76			4.46	%	1,547
Final maturity 2021	4.71	%	1,424			4.71	%	1,424
Final maturity 2022	3.50	%	1,372			3.50	%	1,373
Final maturity 2023	7.64	%	325			7.64	%	325
Final maturity 2024	3.37	%	1,397			3.50	%	896
Final maturity 2025 and thereafter	5.70	%	9,507			5.98	%	7,963
Other facilities:
U.S. dollar loans, various rates and maturities	2.80	%	2,000			3.59	%	4,533
Foreign currency loans, various rates and maturities	3.33	%	605			3.20	%	708
InterNotes, varying maturities through 2049	3.44	%	792			3.26	%	778
Finance lease obligations ¹			425					371
Unamortized debt discount and issuance costs			(335		)			(334		)
Long-term debt due within one year ²			(378		)			(338		)
Long-term debt			$	17,213				$	19,253


1.	See Note 14 for additional information.


2.	Presented net of current portion of unamortized debt issuance costs.



Maturities of Long-Term Debt for Next Five Years at Sep 30, 2019
In millions
2019	$	97
2020	$	379
2021	$	1,763
2022	$	1,514
2023 ¹	$	2,509
2024	$	1,493


1.	Assumes the option to extend will be exercised for the $2.0 billion Dow Silicones Term Loan Facility.

2019 Activity

In the first nine months of 2019, the Company issued $2.0 billion of senior unsecured notes in an offering under Rule 144A of the Securities Act of 1933. The offering included $750 million aggregate principal amount of 4.80 percent notes due 2049; $750 million aggregate principal amount of 3.625 percent notes due 2026; and $500 million aggregate principal amount of 3.15 percent notes due 2024. In addition, the Company redeemed $1.5 billion of 4.25 percent notes issued by the Company with maturity in 2020. As a result, the Company recognized a pretax loss of $42 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to the Corporate segment. The Company also issued an aggregate principal amount of $136 million of International Notes ("InterNotes"), and redeemed an aggregate principal amount of $117 million at maturity. Approximately $136 million of long-term debt (net of $16 million of issuances) was repaid by consolidated variable interest entities.

In the second quarter of 2019, Dow Silicones voluntarily repaid $2.5 billion of principal under a certain third party credit agreement ("Term Loan Facility"). As a result, Dow Silicones recognized a pretax loss of $2 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to the Corporate segment. In September 2019, Dow Silicones amended the Term Loan Facility to extend the maturity date on the remaining principal balance of $2.0 billion, making amounts borrowed under the Term Loan Facility payable in September 2021. In addition, this amendment includes options to extend the maturity date through September 2023, at Dow Silicones' election, which the Company intends to exercise.

Subsequent Events

On October 11, 2019, the Company announced a make-whole call for $1.25 billion of 4.125 percent notes with maturity in November 2021, which will settle on November 12, 2019.

In October 2019, TDCC launched exchange offers for $4 billion of all the outstanding, unregistered senior notes that were issued in private offerings on November 30, 2018 and May 20, 2019, for identical, registered notes under the Securities Act of 1933 (the "Exchange Offers"). The Exchange Offers are with respect to the Company's 3.15 percent notes due 2024, 4.55 percent notes due 2025, 3.625 percent notes due 2026, 4.80 percent notes due 2028, 5.55 percent notes due 2048 and 4.80 percent notes due 2049, and fulfilled the Company's obligations contained in the registration rights agreements entered into in connection with the issuance of the aforementioned notes.

2018 Activity

In the first nine months of 2018, the Company redeemed $333 million of 5.7 percent notes at maturity, and an aggregate principal amount of $86 million of InterNotes at maturity. In addition, approximately $75 million of long-term debt was repaid by consolidated variable interest entities. The Company also called an aggregate principal amount of $343 million tax-exempt bonds of various interest rates and maturities in 2029, 2033 and 2038. As a result of the redemptions, the Company recognized a pretax loss of $7 million on the early extinguishment of debt, included in “Sundry income (expense) - net” in the consolidated statements of income and related to the Corporate segment.

Available Credit Facilities

The following table summarizes the Company's credit facilities:



Committed and Available Credit Facilities at Sep 30, 2019
In millions	Committed Credit		Credit Available		Maturity Date	Interest
Five Year Competitive Advance and Revolving Credit Facility	$	5,000	$	5,000	October 2023	Floating rate
Term Loan Facility ¹	2,000		—		September 2023	Floating rate
North American Securitization Facility	800		800		December 2019	Floating rate
European Securitization Facility ²	437		437		October 2020	Floating rate
Bilateral Revolving Credit Facility	100		100		October 2019	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2020	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2020	Floating rate
Bilateral Revolving Credit Facility	280		280		March 2020	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2020	Floating rate
Bilateral Revolving Credit Facility	200		200		March 2020	Floating rate
Bilateral Revolving Credit Facility	200		200		May 2020	Floating rate
Bilateral Revolving Credit Facility	200		200		July 2020	Floating rate
Bilateral Revolving Credit Facility	100		100		August 2020	Floating rate
Total committed and available credit facilities	$	9,617	$	7,617


1.	Assumes the option to extend the Term Loan Facility will be exercised.


2.	Equivalent to Euro 400 million.

Debt Covenants and Default Provisions

There were no material changes to the debt covenants and default provisions related to the Company's outstanding long-term debt and primary, private credit agreements in the first nine months of 2019, except for what has been noted below. Information on the Company's debt covenants and default provisions can be found in Note 17 to the Consolidated Financial Statements included in Dow Inc. and TDCC's 2018 10-K Recast filed with the SEC on July 25, 2019.

On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC. In conjunction with the separation, Dow Inc. is obligated, substantially concurrently with the issuance of any guarantee in respect of outstanding or committed indebtedness under the Company's Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement"), to enter into a supplemental indenture with TDCC and the trustee under TDCC’s existing 2008 base indenture governing certain notes issued by TDCC. Under such supplemental indenture, Dow Inc. will guarantee all outstanding debt securities and all amounts due under such existing base indenture and will become subject to certain covenants and events of default under the existing base indenture.

In addition, the Revolving Credit Agreement includes an event of default which would be triggered in the event Dow Inc. incurs or guarantees third party indebtedness for borrowed money in excess of $250 million or engages in any material activity or directly owns any material assets, in each case, subject to certain conditions and exceptions. Dow Inc. may, at its option, cure the event of default by delivering an unconditional and irrevocable guarantee to the administrative agent within thirty days of the event or events giving rise to such event of default.

No such events have occurred or have been triggered at the time of the filing of this Quarterly Report on Form 10-Q.