Debt

12 Months Ended

Dec. 31, 2019

Debt with a contractual term less than one year is generally classified as short-term debt and consisted of the following at December 31, (in thousands):



	2019		2018
Unsecured commercial paper	$	571,995	$	1,135,810

Debt with a contractual term greater than one year is generally classified as long-term debt and consisted of the following at December 31, (in thousands):



	2019			2018
Secured debt:
Asset-backed Canadian commercial paper conduit facility	$	114,693		$	155,951
Asset-backed U.S. commercial paper conduit facilities	490,427			582,717
Asset-backed securitization debt	766,965			95,216
Unamortized discounts and debt issuance costs	(2,573		)	(49		)
	1,369,512			833,835



			2019			2018
Unsecured notes (at par value):
Medium-term notes:
Due in 2019, issued January 2016	2.25	%	—			600,000
Due in 2019, issued March 2017	LIBOR + 0.35%		—			150,000
Due in 2019, issued September 2014	2.40	%	—			600,000
Due in 2020, issued February 2015	2.15	%	600,000			600,000
Due in 2020, issued May 2018	LIBOR + 0.50%		450,000			450,000
Due in 2020, issued March 2017	2.40	%	350,000			350,000
Due in 2021, issued January 2016	2.85	%	600,000			600,000
Due in 2021, issued in November 2018	LIBOR + 0.94%		450,000			450,000
Due in 2021, issued May 2018	3.55	%	350,000			350,000
Due in 2022, issued February 2019	4.05	%	550,000			—
Due in 2022, issued June 2017	2.55	%	400,000			400,000
Due in 2023, issued February 2018	3.35	%	350,000			350,000
Due in 2024, issued November 2019^(a)	3.14	%	672,936			—
Unamortized discounts and debt issuance costs			(12,809		)	(12,993		)
			4,760,127			4,887,007
Senior notes:
Due in 2025, issued July 2015	3.50	%	450,000			450,000
Due in 2045, issued July 2015	4.625	%	300,000			300,000
Unamortized discounts and debt issuance costs			(6,704		)	(7,376		)
			743,296			742,624
			5,503,423			5,629,631
Long-term debt			6,872,935			6,463,466
Current portion of long-term debt, net			(1,748,109		)	(1,575,799		)
Long-term debt, net			$	5,124,826		$	4,887,667


(a)	Euro denominated €600.0 million par value remeasured to U.S. dollar at December 31, 2019

The Company’s future principal payments on debt obligations as of December 31, 2019 were as follows (in thousands):



2020	$	2,326,688
2021	1,751,129
2022	1,351,281
2023	614,982
2024	672,936
Thereafter	750,000
	$	7,467,016

Unsecured Commercial Paper – Commercial paper maturities may range up to 365 days from the issuance date. The weighted-average interest rate of outstanding commercial paper balances was 1.94% and 2.79% at December 31, 2019 and 2018, respectively.

Credit Facilities – In May 2019, the Company entered into a $195.0 million 364-day credit facility which matures in May 2020. The Company also has a $780.0 million five-year credit facility which matures in April 2023 and a $765.0 million five-year credit facility which matures in April 2021. The new 364-day credit facility and the five-year credit facilities (together, the Global Credit Facilities) bear interest at variable rates, which may be adjusted upward or downward depending on certain criteria, such as credit ratings. The Global Credit Facilities also require the Company to pay a fee based on the average daily unused portion of the aggregate commitments under the Global Credit Facilities. The Global Credit Facilities are committed facilities primarily used to support the Company's unsecured commercial paper program.

Unsecured Notes – The fixed-rate unsecured notes provide for semi-annual interest payments and the floating-rate unsecured notes provide for quarterly interest payments. Principal on the unsecured notes is due at maturity.

During January, March, and September of 2019, $600.0 million of 2.25%, $150.0 million of floating-rate, and $600.0 million of 2.40% medium-term notes matured, respectively, and the principal and accrued interest were paid in full. During June 2018, $877.5 million of 6.80% medium-term notes matured, and the principal and accrued interest were paid in full.

Operating and Financial Covenants – HDFS and the Company are subject to various operating and financial covenants related to the credit facilities and various operating covenants under the medium-term and senior notes and the U.S. and Canadian asset-backed commercial paper conduit facilities. The more significant covenants are described below.

The operating covenants limit the Company’s and HDFS' ability to:


•	Assume or incur certain liens;


•	Participate in certain mergers or consolidations; and


•	Purchase or hold margin stock.

Under the current financial covenants of the Global Credit Facilities, the ratio of HDFS’ consolidated debt, excluding secured debt, to HDFS’ consolidated shareholders' equity, excluding accumulated other comprehensive loss (AOCL), cannot exceed 10.0 to 1.0 as of the end of any fiscal quarter. In addition, the ratio of the Company's consolidated debt to the Company's consolidated debt and consolidated shareholders’ equity (where the Company's consolidated debt in each case excludes that of HDFS and its subsidiaries, and the Company's consolidated shareholders’ equity excluding AOCL), cannot exceed 0.7 to 1.0 as of the end of any fiscal quarter. No financial covenants are required under the medium-term and senior or the U.S. or Canadian asset-backed commercial paper conduit facilities.

At December 31, 2019 and 2018, HDFS and the Company remained in compliance with all of the then existing covenants.