LONG-TERM DEBT

12 Months Ended

Dec. 31, 2020


NOTE 7 - LONG-TERM DEBT

At December 31, 2020 and 2019, Occidental’s long-term debt consisted of the following:


millions	2020		2019
4.850% senior notes due 2021	$	147	$	677
2.600% senior notes due 2021	224		1,500
4.100% senior note due 2021	—		1,249
Variable rate bonds due 2021 (1.193% and 2.854% as of December 31, 2020 and 2019, respectively)	27		500
Variable rate bonds due 2021 (3.151% as of December 31, 2019)	—		500
2-year variable rate Term Loan due 2021 (3.111% as of December 31, 2019)	—		1,956
2.700% senior notes due 2022	629		2,000
3.125% senior notes due 2022	276		814
2.600% senior notes due 2022	101		400
Variable rate bonds due 2022 (1.730% and 3.360% as of December 31, 2020 and 2019, respectively)	1,052		1,500
2.700% senior notes due 2023	927		1,191
8.750% medium-term notes due 2023	22		22
2.900% senior notes due 2024	3,000		3,000
6.950% senior notes due 2024	650		650
3.450% senior notes due 2024	248		248
8.000% senior notes due 2025	500		—
5.875% senior notes due 2025	900		—
3.500% senior notes due 2025	750		750
5.500% senior notes due 2025	750		—
5.550% senior notes due 2026	1,100		1,100
3.200% senior notes due 2026	1,000		1,000
3.400% senior notes due 2026	1,150		1,150
7.500% debentures due 2026	112		112
8.500% senior notes due 2027	500		—
3.000% senior notes due 2027	750		750
7.125% debentures due 2027	150		150
7.000% debentures due 2027	48		48
6.625% debentures due 2028	14		14


7.150% debentures due 2028	235		235
7.200% senior debentures due 2028	82		82
6.375% senior notes due 2028	600		—
7.200% debentures due 2029	135		135
7.950% debentures due 2029	116		116
8.450% senior debentures due 2029	116		116
3.500% senior notes due 2029	1,500		1,500
Variable rate bonds due 2030 (4.210% and 1.705% as of December 31, 2020 and 2019, respectively)	68		68
8.875% senior notes due 2030	1,000		—
6.625% senior notes due 2030	1,500		—
6.125% senior notes due 2031	1,250		—
7.500% senior notes due 2031	900		900
7.875% senior notes due 2031	500		500
6.450% senior notes due 2036	1,750		1,750
Zero Coupon senior notes due 2036	2,269		2,271
6.500% note payable to WES due 2038	—		260
4.300% senior notes due 2039	750		750
7.950% senior notes due 2039	325		325
6.200% senior notes due 2040	750		750
4.500% senior notes due 2044	625		625
4.625% senior notes due 2045	750		750
6.600% senior notes due 2046	1,100		1,100
4.400% senior notes due 2046	1,200		1,200
4.100% senior notes due 2047	750		750
4.200% senior notes due 2048	1,000		1,000
4.400% senior notes due 2049	750		750
7.730% debentures due 2096	60		60
7.500% debentures due 2096	78		78
7.250% debentures due 2096	49		49
Total borrowings at face value	$	35,235	$	37,401
Adjustments to book value:
Unamortized premium, net	748		914
Debt issuance costs	(156)		(125)
Long-term finance leases	316		347
Current finance leases	42		51
Total debt and finance leases	$	36,185	$	38,588
Less current maturities of financing leases	(42)		(51)
Less current maturities of long-term debt	(398)		—
Long-term Debt, net	$	35,745	$	38,537

DEBT MATURITIES

At December 31, 2020, future principal payments on long-term debt aggregated approximately $35.2 billion, of which, $398 million is due in 2021, $2.1 billion is due in 2022, $0.9 billion is due in 2023, $3.9 billion is due in 2024, and $27.9 billion is due in 2025 and thereafter.

DEBT ISSUED, REPAID AND EXCHANGED - 2020

The following table summarizes Occidental’s debt issuances, repurchases, repayments and exchanges for the twelve months ended December 31, 2020:


millions	Borrowings at face value
Total borrowings at face value as of December 31, 2019	$	37,401
Issuance of July 2020 notes:
8.000% senior notes due 2025	500
8.500% senior notes due 2027	500
8.875% senior notes due 2030	1,000
July tender and purchase:
4.100% senior notes due February 2021	(943)
Variable rate bonds due February 2021	(473)
4.850% senior notes due March 2021	(530)
2.600% senior notes due August 2021	(51)
Issuance of August 2020 notes:
5.875% senior notes due 2025	900
6.375% senior notes due 2028	600
6.625% senior notes due 2030	1,500
August and September tender and purchase:
4.100% senior notes due February 2021	(139)
Variable rate bonds due August 2021	(123)
2.600% senior notes due August 2021	(1,099)
Variable rate bonds due August 2022	(448)
2.600% senior notes due April 2022	(171)
2.700% senior notes due August 2022	(102)
2.700% senior notes due February 2023	(52)
August WES exchange:
6.500% note payable to WES due 2038	(260)
September Term Loan repayment:
2-year variable rate term loan due 2021	(500)
October Term Loan and note repayment:
2-year variable rate bonds due August 2021	(377)
0.00% senior notes due October 2036	(2)
2-year variable rate term loan due September 2021	(1,010)
November Term Loan repayment:
2-year variable rate term loan due September 2021	(232)
Issuance of December 2020 notes:
5.500% senior notes due 2025	750
6.125% senior notes due 2031	1,250
December tender and purchase:
2.600% senior notes due August 2021	(126)
3.125% senior notes due February 2022	(538)
2.600% senior notes due April 2022	(128)
2.700% senior notes due August 2022	(1,269)
2.700% senior notes due February 2023	(212)
December Term Loan and note repayment:
2-year variable rate term loan due September 2021	(214)
4.100% senior notes due February 2021	(167)
Total borrowings at face value as of December 31, 2020	$	35,235

In July, August, and December, 2020, Occidental issued $7.0 billion in senior unsecured notes, in aggregate, with maturities ranging from 2025 to 2031 and used the net proceeds to tender $3.5 billion of 2021, $2.7 billion of 2022 and $264 million of 2023 maturities. In addition, Occidental used proceeds from the sale of mineral and surface acres located in Wyoming, Colorado and Utah; the Colombian asset sale and proceeds from other divestitures and cash on hand to repay $2.5 billion of 2021 and $2 million of 2036 maturities.

In August 2020, Occidental exchanged approximately 27.9 million WES common units to retire a $260 million note payable to WES, resulting in a net loss of $46 million, which includes a $76 million gain on debt extinguished associated with an unamortized premium on the note payable to WES. This net loss on exchange has been presented in (losses) gains on sale of assets, net in the Consolidated Statement of Operations.

Interest on the notes issued in July 2020 will be paid semi-annually on July 15 and January 15 of each year, commencing on January 15, 2021. Interest on the notes issued in August 2020 will be paid semi-annually on September 1 and March 1 of each year, commencing on March 1, 2021. Interest on the December 2025 notes issued in December 2020 will be paid semi-annually on June 1 and December 1 of each year, commencing on June 1, 2021. Interest on the January 2031 notes issued in December 2020 will be paid semi-annually on July 1 and January 1 of each year, commencing on July 1, 2021.

REVOLVING CREDIT FACILITY

In March 2020, Occidental amended the sole financial covenant in its RCF by revising the definition of “Total Capitalization” to exclude any non-cash write downs, impairments and related charges occurring after September 30, 2019.

On June 30, 2019, Occidental entered into an amendment to its existing $3.0 billion RCF pursuant to which, among other things, the commitments under the RCF were increased to $5.0 billion at the closing of the Acquisition. Borrowings under the RCF bear interest at various benchmark rates, including LIBOR, plus a margin based on Occidental’s senior debt ratings. The facility has similar terms to other debt agreements and does not contain material adverse change clauses or debt ratings triggers that could restrict Occidental’s ability to borrow, or that would permit lenders to terminate their commitments or accelerate debt repayment. The facility provides for the termination of loan commitments and requires immediate repayment of any outstanding amounts if certain events of default occur. Occidental has not drawn down any amounts under the RCF. In 2020, Occidental paid average annual facility fees of 0.275% on the total commitment amount.

ZERO COUPON NOTES DUE 2036

The Zero Coupons have an aggregate principal amount due at maturity of approximately $2.3 billion, reflecting an accretion rate of 5.24%. The Zero Coupons can be put to Occidental in October of each year, in whole or in part, for the then-accreted value of the outstanding Zero Coupons. The Zero Coupons can next be put to Occidental in October 2021, which, if put in whole, would be $1.0 billion at such date. Occidental has the ability and intent to refinance these obligations under the RCF or other committed facilities.

DEBT GUARANTEES

As of December 31, 2020, and 2019, Occidental had provided limited recourse guarantees of approximately $242 million, primarily related to Dolphin Energy Limited’s debt, which are limited to certain political and other events.

FAIR VALUE OF DEBT

Occidental estimates the fair value of fixed-rate debt based on the quoted market prices for those instruments or on quoted market yields for similarly rated debt instruments, taking into account such instruments’ maturities. The estimated fair values of Occidental’s debt at December 31, 2020, and 2019, substantially all of which were classified as Level 1, were approximately $33.8 billion and $38.8 billion, respectively. Occidental’s exposure to changes in interest rates relates primarily to its variable-rate, long-term debt obligations, and is not material. As of December 31, 2020, and 2019, variable-rate debt constituted approximately 3% and 12% of Occidental’s total debt, respectively.

DEBT RATINGS

In connection with the Senior Notes Offerings, Occidental's long-term debt credit ratings were reviewed by the three major rating agencies. As of December 31, 2020, Occidental’s long-term debt was rated BB by Fitch Ratings, Ba2 by Moody’s Investors Service and BB- by Standard and Poor’s. Any additional downgrade in credit ratings could impact Occidental's ability to access capital markets and increase its cost of capital. In addition, given that Occidental’s current debt ratings are non-investment grade, Occidental may be requested, and in some cases required, to provide collateral in the form of cash, letters of credit, surety bonds or other acceptable support as financial assurance of its performance and payment obligations under certain contractual arrangements such as pipeline transportation contracts, environmental remediation obligations, oil and gas purchase contracts and certain derivative instruments.

As of the date of this filing, Occidental has provided required financial assurances through a combination of cash, letters of credit and surety bonds and has not issued any letters of credit under the RCF or other committed facilities. For additional information, see Risk Factors in Part I, Item IA of this Form 10-K.