DEBT AND FINANCING COSTS

3 Months Ended

Mar. 31, 2021

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


	March 31, 2021		December 31, 2020
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	8,045	$	8,052
Altus credit facility(2)	657		624
Apache credit facility(2)	65		150
Finance lease obligations	37		38
Unamortized discount	(34)		(35)
Debt issuance costs	(55)		(57)
Total debt	8,715		8,772
Current maturities	(2)		(2)
Long-term debt	$	8,713	$	8,770

(1)The fair values of the Company’s notes and debentures were $8.0 billion and $8.5 billion as of March 31, 2021 and December 31, 2020, 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 value of borrowings on credit facilities approximates fair value because interest rates are variable and reflective of market rates.

As of March 31, 2021 and December 31, 2020, current debt included $2 million of finance lease obligations.

During the quarter ended March 31, 2021, the Company purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $7 million for an aggregate purchase price of $6 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $1 million. No gain or loss was recognized on these repurchases.

The Company intends to reduce debt outstanding under its indentures from time to time.

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, 2021. The facility is for general corporate purposes. As of March 31, 2021, there were $65 million of borrowings and an aggregate £573 million and $20 million in letters of credit outstanding under this facility. As of December 31, 2020, there were $150 million of borrowings and an aggregate £633 million and $40 million in letters of credit outstanding under this facility. The outstanding letters of credit denominated in pounds were issued 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 the Company borrowing funds for up to 270 days. As a result of downgrades in the Company’s credit ratings during 2020, the Company does not expect that its commercial paper program will be cost competitive with its other financing alternatives and does not anticipate using it under such circumstances. As of March 31, 2021 and December 31, 2020, no commercial paper was outstanding.

Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of March 31, 2021 and December 31, 2020, there were no borrowings and £34 million and $17 million in letters of credit outstanding under these facilities.

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, 2021, there were $657 million of borrowings and a $2 million letter of credit outstanding under this facility. As of December 31, 2020, there were $624 million of borrowings and no letters of credit outstanding under this facility. The Altus Midstream LP credit facility is unsecured and is not guaranteed by Apache, APA Corporation, or any of its subsidiaries.

Financing Costs, Net

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


	For the Quarter Ended March 31,
	2021		2020
	(In millions)
Interest expense	$	112	$	107
Amortization of debt issuance costs	2		2
Capitalized interest	—		(4)

Interest income	(2)		(2)
Interest income from APA Corporation, net	(5)		—
Financing costs, net	$	107	$	103