Debt

12 Months Ended

Dec. 31, 2020

Debt with a contractual term less than 12 months is generally classified as short-term and consisted of the following at December 31, (in thousands):


	2020		2019
Unsecured commercial paper	$	1,014,274	$	571,995

Debt with a contractual term greater than 12 months is generally classified as long-term and consisted of the following at December 31, (in thousands):


	2020		2019
Secured debt:
Asset-backed Canadian commercial paper conduit facility	$	116,678	$	114,693
Asset-backed U.S. commercial paper conduit facilities	402,205		490,427
Asset-backed securitization debt	1,800,393		766,965
Unamortized discounts and debt issuance costs	(8,437)		(2,573)
	2,310,839		1,369,512


		2020		2019
Unsecured notes (at par value):
Medium-term notes:



Due in 2020, issued February 2015	2.15%	—		600,000
Due in 2020, issued May 2018	LIBOR + 0.50%	—		450,000
Due in 2020, issued March 2017	2.40%	—		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		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 2023, issued May 2020(a)	4.94%	797,206		—
Due in 2024, issued November 2019(b)	3.14%	735,882		672,936
Due in 2025, issued June 2020	3.35%	700,000		—
Unamortized discounts and debt issuance costs		(15,374)		(12,809)
		4,917,714		4,760,127
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		(6,023)		(6,704)
		743,977		743,296
		5,661,691		5,503,423
Long-term debt		7,972,530		6,872,935
Current portion of long-term debt, net		(2,039,597)		(1,748,109)
Long-term debt, net		$	5,932,933	$	5,124,826

(a)Euro denominated €650.0 million par value remeasured to U.S. dollar at December 31, 2020

(b)Euro denominated €600.0 million par value remeasured to U.S. dollar at December 31, 2020 and 2019, respectively

The Company’s future principal payments on debt obligations as of December 31, 2020 were as follows (in thousands):


2021	$	3,063,227
2022	1,655,414
2023	1,793,635
2024	1,054,362
2025	700,000
Thereafter	750,000
	$	9,016,638

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 1.34% and 1.94% at December 31, 2020 and 2019, respectively.

Credit Facilities – In April 2020, the Company entered into a $707.5 million five-year credit facility to replace the $765.0 million five-year credit facility that was due to mature in April 2021. The new five-year credit facility matures in April 2025. The Company also amended the $780.0 million five-year credit facility to $707.5 million with no change to the maturity date of April 2023. The Company also had a $195.0 million 364-day credit facility which was due to mature in May 2020. In April 2020, the Company extended the maturity date of this credit facility to August 2020; however, this facility was terminated on May 18, 2020. At the time of termination, there were no outstanding borrowings under this 364-day credit facility. On June 1, 2020, the Company entered into a new $350.0 million 364-day credit facility, and on June 4, 2020, the Company borrowed $150.0 million under this facility. On December 9, 2020, the Company amended this facility to allow for the early repayment of the $150.0 million borrowing, which was repaid in full on this date, along with the related interest. The

five-year credit facilities (together, the Global Credit Facilities), as well as the $350.0 million 364-day credit facility, bear interest at variable rates, which may be adjusted upward or downward depending on certain criteria, such as credit ratings. The Global Credit Facilities and the $350.0 million 364-day credit facility also require the Company to pay a fee based on the average daily unused portion of the aggregate commitments. The Global Credit Facilities are committed facilities primarily used to support the Company's unsecured commercial paper program.

Unsecured Notes – The fixed-rate U.S. dollar-denominated unsecured notes provide for semi-annual interest payments, the fixed-rate foreign currency-dominated unsecured notes provide for annual interest payments, and the floating-rate unsecured notes provide for quarterly interest payments. Principal on the unsecured notes is due at maturity.

During February, May, and June of 2020, $600.0 million of 2.15%, $450.0 million of floating rate, and $350.0 million 2.40% medium-term notes matured, respectively, and the principal and accrued interest were paid in full. 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.

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 allowance for credit losses on finance receivables plus 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 excludes 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 or senior notes or the U.S. or Canadian asset-backed commercial paper conduit facilities.

At December 31, 2020 and 2019, HDFS and the Company remained in compliance with all of the then existing covenants.