DEBT AND FINANCING COSTS

3 Months Ended

Mar. 31, 2020

The following table presents the carrying value of the Company’s debt:



	March 31, 2020			December 31, 2019
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs⁽¹⁾	$	8,217		$	8,217
Altus credit facility⁽²⁾	468			396
Apache credit facility⁽²⁾	250			—
Finance lease obligations	39			48
Unamortized discount	(42		)	(42		)
Debt issuance costs	(52		)	(53		)
Total debt	8,880			8,566
Current maturities	(544		)	(11		)
Long-term debt	$	8,336		$	8,555


(1)	The fair values of the Company’s notes and debentures were $4.3 billion and $8.4 billion as of March 31, 2020 and December 31, 2019, respectively. Apache uses a market approach to determine the fair values of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).


(2)	The carrying amount of borrowings on credit facilities approximates fair value because the interest rates are variable and reflective of market rates.

As of March 31, 2020, current debt included $292 million, net of discount, of 3.625% senior notes due February 1, 2021, $250 million of borrowings on Apache’s revolving credit facility, and $2 million of finance lease obligations. As of December 31, 2019, current debt included $11 million of finance lease obligations.

In March 2018, the Company entered into a revolving credit facility with commitments totaling $4.0 billion. In March 2019, the term of this facility was extended by one year to March 2024 (subject to Apache’s remaining one-year extension option) pursuant to Apache’s exercise of an extension option. The Company can increase commitments up to $5.0 billion by adding new lenders or obtaining the consent of any increasing existing lenders. The facility includes a letter of credit subfacility of up to $3.0 billion, of which $2.08 billion was committed as of March 31, 2020. The facility is for general corporate purposes, and committed borrowing capacity fully supports Apache’s commercial paper program. As of March 31, 2020, there were $250 million of borrowings and no letters of credit outstanding under this facility. As of December 31, 2019, there were no borrowings or letters of credit outstanding under this facility. In April 2020, an aggregate £641 million in letters of credit were issued under this facility to support North Sea decommissioning obligations, the terms of which required such support after Standard & Poor’s reduced the Company’s credit rating from BBB to BB+ on March 26, 2020.

The Company’s $3.5 billion commercial paper program, which is subject to market availability, facilitates Apache borrowing funds for up to 270 days at competitive interest rates. As of March 31, 2020 and December 31, 2019, the Company had no commercial paper outstanding.

In November 2018, Altus Midstream LP entered into a revolving credit facility for general corporate purposes that matures in November 2023 (subject to Altus Midstream LP’s two, one-year extension options). The agreement for this facility, as amended, provides aggregate commitments from a syndicate of banks of $800 million. All aggregate commitments include a letter of credit subfacility of up to $100 million and a swingline loan subfacility of up to $100 million. Altus Midstream LP may increase commitments up to an aggregate $1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. As of March 31, 2020 and December 31, 2019, there were $468 million and $396 million, respectively, of borrowings outstanding under this facility. As of March 31, 2020 and December 31, 2019, there were no letters of credit outstanding under this facility. The Altus Midstream LP credit facility is unsecured and is not guaranteed by Apache or any of Apache’s other subsidiaries.

Financing Costs, Net

The following table presents the components of Apache’s financing costs, net:



	For the Quarter Ended March 31,
	2020			2019
	(In millions)
Interest expense	$	107		$	107
Amortization of debt issuance costs	2			2
Capitalized interest	(4		)	(8		)
Interest income	(2		)	(4		)
Financing costs, net	$	103		$	97