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BORROWINGS
3 Months Ended
Mar. 31, 2015
Debt Disclosure [Abstract]  
BORROWINGS
BORROWINGS
 
March 31,
 
December 31,
(Dollars in millions)
2015
 
2014
Borrowings consisted of:
 
 
 
3% notes due 2015
$
250

 
$
250

2.4% notes due 2017
999

 
998

6.30% notes due 2018
168

 
169

5.5% notes due 2019
250

 
250

2.7% notes due 2020
798

 
798

4.5% notes due 2021
250

 
250

3.6% notes due 2022
906

 
903

7 1/4% debentures due 2024
244

 
244

7 5/8% debentures due 2024
54

 
54

3.8% notes due 2025
796

 
796

7.60% debentures due 2027
222

 
222

4.8% notes due 2042
497

 
497

4.65% notes due 2044
877

 
877

Credit facilities and commercial paper borrowings
1,328

 
1,235

Capital leases
5

 
6

Total borrowings
7,644

 
7,549

Borrowings due within one year
351

 
301

Long-term borrowings
$
7,293

 
$
7,248



Credit Facility and Commercial Paper Borrowings

In connection with the acquisition of Taminco, Eastman entered into a $1.0 billion five-year Term Loan Agreement. As of March 31, 2015, the Term Loan Agreement balance outstanding was $1.0 billion with an interest rate of 1.43 percent. As of December 31, 2014, the Term Loan Agreement balance outstanding was $1.0 billion with an interest rate of 1.41 percent. Borrowings under the Term Loan Agreement are subject to interest at varying spreads above quoted market rates.

The Company has access to a $1.25 billion revolving credit agreement (the "Credit Facility") expiring October 2019. Borrowings under the Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. At March 31, 2015 and December 31, 2014, the Company had no outstanding borrowings under the Credit Facility.

The Credit Facility provides liquidity support for commercial paper borrowings and general corporate purposes. Accordingly, any outstanding commercial paper borrowings reduce capacity for borrowings available under the Credit Facility. Given the expiration date of the Credit Facility, any commercial paper borrowings supported by the Credit Facility are classified as long-term borrowings because the Company has the ability and intent to refinance such borrowings on a long-term basis. At March 31, 2015 the Company's commercial paper borrowings were $328 million with a weighted average interest rate of 0.56 percent. At December 31, 2014 the Company's commercial paper borrowings were $235 million with a weighted average interest rate of 0.47 percent.

The Company also has a $250 million line of credit under its accounts receivable securitization agreement (the "A/R Facility"), expiring April 2017. Borrowings under the A/R Facility are subject to interest rates based on a spread over the lender's borrowing costs, and the Company pays a fee to maintain availability of the A/R Facility. At March 31, 2015 and December 31, 2014 the Company had no outstanding borrowings under the A/R Facility. During first quarter 2014, $125 million of the available amount under the A/R Facility was borrowed and then repaid during second quarter 2014.

The Term Loan Agreement, Credit Facility, and the A/R Facility contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented. Total available borrowings under the Credit Facility and A/R Facility were $1,172 million and $1,265 million as of March 31, 2015 and December 31, 2014, respectively. The Company would not violate applicable covenants for these periods if the total available amounts of the facilities had been borrowed.

Fair Value of Borrowings

The Company has classified its long-term borrowings at March 31, 2015 and December 31, 2014 under the fair value hierarchy as defined in the accounting policies in Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2014 Annual Report on Form 10-K. The fair value for fixed-rate debt securities is based on current market prices and is classified as Level 1. The fair value for the Company's other borrowings, which include the Term Loan Agreement, A/R Facility, commercial paper, and capital leases equals the carrying value and is classified as Level 2.


 
 
 
Fair Value Measurements at March 31, 2015
(Dollars in millions)
 
Recorded Amount
March 31,
2015
 
Total Fair Value
 
 Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
Long-term borrowings
 
$
7,293

 
$
7,733

 
$
6,501

 
$
1,232

 
$

 
 
 
 
 
Fair Value Measurements at December 31, 2014
(Dollars in millions)
 
Recorded Amount
December 31,
2014
 
Total Fair Value
 
 Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
Long-term borrowings
 
$
7,248

 
$
7,557

 
$
6,366

 
$
1,191

 
$