Short-Term Borrowings, Long-Term Debt and Available Credit Facilities

9 Months Ended

Sep. 30, 2020

SHORT-TERM BORROWINGS, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES

The following tables summarize Corteva's short-term borrowings and finance lease obligations and long-term debt:


Short-term borrowings and finance lease obligations
(In millions)	September 30, 2020		December 31, 2019		September 30, 2019
Commercial paper	$	926	$	—	$	2,432
Repurchase facility	1,175		—		1,129
Other loans - various currencies	39		2		35
Long-term debt payable within one year	1		1		4
Finance lease obligations payable within one year	1		4		4
Total short-term borrowings and finance lease obligations	$	2,142	$	7	$	3,604

The estimated fair value of the company's short-term borrowings, including interest rate financial instruments, was determined using Level 2 inputs within the fair value hierarchy. Based on quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's short-term borrowings and finance lease obligations was approximately carrying value.

The weighted-average interest rate on short-term borrowings outstanding at September 30, 2020, December 31, 2019, and September 30, 2019 was 0.9%, 6.7% and 2.6%, respectively. The change in the weighted-average interest rate was primarily due to lower Commercial Paper and Repurchase Facility interest.


Long-Term Debt
(In millions)	September 30, 2020				December 31, 2019				September 30, 2019
	Amount		Weighted Average Rate		Amount		Weighted Average Rate		Amount		Weighted Average Rate
Promissory notes and debentures:
Maturing in 2025	$	500	1.70	%	$	—	—	%	$	—	—	%
Maturing in 2030	500		2.30	%	$	—	—	%	$	—	—	%
Other loans:
Foreign currency loans, various rates and maturities	1				2				4
Medium-term notes, varying maturities through 2041	109		—	%	109		1.61	%	110		1.88	%
Finance lease obligations	4				5				6
Less: Unamortized debt discount and issuance costs	11				—				—
Less: Long-term debt due within one year	1				1				4
Total	$	1,102			$	115			$	116

The fair value of the company’s long-term borrowings, including debt due within one year, was $1,164 million, $119 million, and $123 million as of September 30, 2020, December 31, 2019, and September 30, 2019, respectively, and was determined using quoted market prices for the same or similar issues, or current rates offered to the company for debt of the same remaining maturities (Level 2 inputs).

Debt Offering

In May 2020, EID issued $500 million of 1.70 percent Senior Notes due 2025 and $500 million of 2.30 percent Senior Notes due 2030 (the May 2020 Debt Offering). The proceeds of this offering are intended to be used for general corporate purposes, which may include discretionary contributions to the company’s U.S. principal pension plan and repayment of other indebtedness.

Repurchase Facility

In February 2020, the company entered into a new committed receivable repurchase facility of up to $1.3 billion (the "2020 Repurchase Facility") which expires in December 2020. Under the 2020 Repurchase Facility, Corteva may sell a portfolio of available and eligible outstanding customer notes receivables to participating institutions and simultaneously agree to repurchase at a future date. The 2020 Repurchase Facility is considered a secured borrowing with the customer notes receivable inclusive of those that are sold and repurchased, equal to 105 percent of the outstanding amounts borrowed utilized as collateral. Borrowings under the 2020 Repurchase Facility have an interest rate of LIBOR + 0.75 percent.

As of September 30, 2020, $1,234 million of notes receivable, recorded in accounts and notes receivable - net, were pledged as collateral against outstanding borrowings under the 2020 Repurchase Facility of $1,175 million, recorded in short-term borrowings and finance lease obligations on the interim Condensed Consolidated Balance Sheet.

Revolving Credit Facilities

In November 2018, EID entered into a $3.0 billion 5-year revolving credit facility and a $3.0 billion 3-year revolving credit facility (the “Revolving Credit Facilities”). The Revolving Credit Facilities became effective May 2019. Corteva, Inc. became a party at the time of the Corteva Distribution. The Revolving Credit Facilities may serve as a substitute to the company's commercial paper program, and can be used, from time to time, for general corporate purposes including, but not limited to, the funding of seasonal working capital needs. The Revolving Credit Facilities contain customary representations and warranties, affirmative and negative covenants and events of default that are typical for companies with similar credit ratings. Additionally, the Revolving Credit Facilities contain a financial covenant requiring that the ratio of total indebtedness to total capitalization for Corteva and its consolidated subsidiaries not exceed 0.60.

In March 2020, the company drew down $500 million under the $3.0 billion 3-year revolving credit facility as a result of the volatility and increased borrowing costs of commercial paper resulting from the unstable market conditions caused by the COVID-19 pandemic and repaid that borrowing in full in June 2020. There were no additional borrowings and the unused commitments under the 3-year revolving credit facility were $3.0 billion as of September 30, 2020.