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Debt Obligations

9 Months Ended

Sep. 30, 2019

Note 7. Debt Obligations

The following table presents our consolidated debt obligations (arranged by company and maturity date) at the dates indicated:

	September 30, 2019			December 31, 2018
EPO senior debt obligations:
Commercial Paper Notes, variable-rates	$	–		$	–
Senior Notes N, 6.50% fixed-rate, repaid January 2019		–			700.0
Senior Notes LL, 2.55% fixed-rate, repaid October 2019		800.0			800.0
Senior Notes Q, 5.25% fixed-rate, due January 2020		500.0			500.0
Senior Notes Y, 5.20% fixed-rate, due September 2020		1,000.0			1,000.0
364-Day Revolving Credit Agreement, variable-rate, due September 2020		–			–
Senior Notes TT, 2.80% fixed-rate, due February 2021		750.0			750.0
Senior Notes RR, 2.85% fixed-rate, due April 2021		575.0			575.0
Senior Notes VV, 3.50% fixed-rate, due February 2022		750.0			750.0
Senior Notes CC, 4.05% fixed-rate, due February 2022		650.0			650.0
Senior Notes HH, 3.35% fixed-rate, due March 2023		1,250.0			1,250.0
Senior Notes JJ, 3.90% fixed-rate, due February 2024		850.0			850.0
Multi-Year Revolving Credit Agreement, variable-rate, due September 2024		–			–
Senior Notes MM, 3.75% fixed-rate, due February 2025		1,150.0			1,150.0
Senior Notes PP, 3.70% fixed-rate, due February 2026		875.0			875.0
Senior Notes SS, 3.95% fixed-rate, due February 2027		575.0			575.0
Senior Notes WW, 4.15% fixed-rate, due October 2028		1,000.0			1,000.0
Senior Notes YY, 3.125% fixed-rate, due July 2029		1,250.0			–
Senior Notes D, 6.875% fixed-rate, due March 2033		500.0			500.0
Senior Notes H, 6.65% fixed-rate, due October 2034		350.0			350.0
Senior Notes J, 5.75% fixed-rate, due March 2035		250.0			250.0
Senior Notes W, 7.55% fixed-rate, due April 2038		399.6			399.6
Senior Notes R, 6.125% fixed-rate, due October 2039		600.0			600.0
Senior Notes Z, 6.45% fixed-rate, due September 2040		600.0			600.0
Senior Notes BB, 5.95% fixed-rate, due February 2041		750.0			750.0
Senior Notes DD, 5.70% fixed-rate, due February 2042		600.0			600.0
Senior Notes EE, 4.85% fixed-rate, due August 2042		750.0			750.0
Senior Notes GG, 4.45% fixed-rate, due February 2043		1,100.0			1,100.0
Senior Notes II, 4.85% fixed-rate, due March 2044		1,400.0			1,400.0
Senior Notes KK, 5.10% fixed-rate, due February 2045		1,150.0			1,150.0
Senior Notes QQ, 4.90% fixed-rate, due May 2046		975.0			975.0
Senior Notes UU, 4.25% fixed-rate, due February 2048		1,250.0			1,250.0
Senior Notes XX, 4.80% fixed-rate, due February 2049		1,250.0			1,250.0
Senior Notes ZZ, 4.20% fixed-rate, due January 2050		1,250.0			–
Senior Notes NN, 4.95% fixed-rate, due October 2054		400.0			400.0
TEPPCO senior debt obligations:
TEPPCO Senior Notes, 7.55% fixed-rate, due April 2038		0.4			0.4
Total principal amount of senior debt obligations		25,550.0			23,750.0
EPO Junior Subordinated Notes C, variable-rate, due June 2067 (1)		232.2			256.4
EPO Junior Subordinated Notes D, fixed/variable-rate, due August 2077 (2)		700.0			700.0
EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (3)		1,000.0			1,000.0
EPO Junior Subordinated Notes F, fixed/variable-rate, due February 2078 (4)		700.0			700.0
TEPPCO Junior Subordinated Notes, variable-rate, due June 2067 (1)		14.2			14.2
Total principal amount of senior and junior debt obligations		28,196.4			26,420.6
Other, non-principal amounts		(257.2	)		(242.4	)
Less current maturities of debt		(2,300.0	)		(1,500.1	)
Total long-term debt	$	25,639.2		$	24,678.1

(1)	Variable rate is reset quarterly and based on 3-month LIBOR, or London Inter-Bank Offered Rate, plus 2.778%. During 2019, EPO repurchased and retired $24.2 million in principal amount of these junior subordinated notes.
(2)	Fixed rate of 4.875% through August 15, 2022; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.986%.
(3)	Fixed rate of 5.250% through August 15, 2027; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 3.033%.
(4)	Fixed rate of 5.375% through February 14, 2028; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.57%.

References to “TEPPCO” mean TEPPCO Partners, L.P. prior to its merger with one of our wholly owned subsidiaries in October 2009.

The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the nine months ended September 30, 2019:

	Range of Interest Rates Paid	Weighted-Average Interest Rate Paid
Commercial Paper Notes	2.58% to 2.80%	2.72%
EPO Junior Subordinated Notes C and TEPPCO Junior Subordinated Notes	4.91% to 5.52%	5.34%

Amounts borrowed under our 364-Day and Multi-Year Revolving Credit Agreements bear interest, at our election, equal to: (i) LIBOR, plus an additional variable spread; or (ii) an alternate base rate, which is the greater of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.5%, or (c) the LIBO Market Index Rate in effect on such day plus 1% and a variable spread. The applicable spreads are determined based on our debt ratings.

The following table presents the scheduled contractual maturities of principal amounts of our consolidated debt obligations at September 30, 2019 for the next five years and in total thereafter:

			Scheduled Maturities of Debt
	Total		Remainder of 2019		2020		2021		2022		2023		Thereafter
Principal amount of senior and junior debt obligations at September 30, 2019	$	28,196.4	$	800.0	$	1,500.0	$	1,325.0	$	1,400.0	$	1,250.0	$	21,921.4

In October 2019, we repaid $800.0 million principal amount of EPO’s Senior Notes LL at their maturity using unrestricted cash on hand.

Parent-Subsidiary Guarantor Relationships

EPD acts as guarantor of the consolidated debt obligations of EPO, with the exception of the remaining debt obligations of TEPPCO. If EPO were to default on any of its guaranteed debt, EPD would be responsible for full and unconditional repayment of that obligation.

Amendment to Multi-Year Revolving Credit Agreement

In September 2019, EPO entered into an amendment (the “First Amendment”) to its revolving credit agreement dated September 13, 2017 (the “Multi-Year Revolving Credit Agreement”). The First Amendment reduces the borrowing capacity under the Multi-Year Revolving Credit Agreement from $4.0 billion to $3.5 billion (which may be increased by up to $500 million to $4.0 billion at EPO’s election provided certain conditions are met) and extends the maturity date to September 10, 2024, although the maturity date may be extended further at EPO’s request by up to two years, with the consent of required lenders as set forth under the credit agreement. Borrowings under this revolving credit agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The Multi-Year Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement. The Multi-Year Revolving Credit Agreement also restricts EPO’s ability to pay cash distributions to its parent, Enterprise Products Partners L.P., if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the Multi-Year Revolving Credit Agreement are not secured by any collateral; however, they are guaranteed by Enterprise Products Partners L.P.

Renewal of 364-Day Revolving Credit Agreement

In September 2019, EPO entered into a new 364-Day Revolving Credit Agreement that replaced its prior 364-day credit facility. The new 364-Day Revolving Credit Agreement matures in September 2020. There are currently no principal amounts outstanding under this revolving credit agreement.

Under the terms of the new 364-Day Revolving Credit Agreement, EPO may borrow up to $1.5 billion (which may be increased by up to $200 million to $1.7 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of up to 364 days, subject to the terms and conditions set forth therein. To the extent that principal amounts are outstanding at the maturity date, EPO may elect to have the entire principal balance then outstanding continued as non-revolving term loans for a period of one additional year, payable in September 2021. Borrowings under this revolving credit agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The new 364-Day Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement. The credit agreement also restricts EPO’s ability to pay cash distributions to its parent, Enterprise Products Partners L.P., if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the new 364-Day Revolving Credit Agreement are not secured by any collateral; however, they are guaranteed by Enterprise Products Partners L.P.

Issuance of $2.5 Billion of Senior Notes in July 2019

In July 2019, EPO issued $2.5 billion aggregate principal amount of senior notes comprised of $1.25 billion principal amount of senior notes due July 2029 (“Senior Notes YY”) and $1.25 billion principal amount of senior notes due January 2050 (“Senior Notes ZZ”). Net proceeds from this offering were used by EPO for the repayment of debt and for general company purposes, including for growth capital expenditures.

Senior Notes YY were issued at 99.955% of their principal amount and have a fixed interest rate of 3.125% per year. Senior Notes ZZ were issued at 99.792% of their principal amount and have a fixed interest rate of 4.20% per year. EPD has guaranteed the senior notes through an unconditional guarantee on an unsecured and unsubordinated basis.

Partial Retirement of Junior Subordinated Notes During Second Quarter of 2019

During the second quarter of 2019, EPO repurchased and retired $24.2 million in principal amount of its Junior Subordinated Notes C. A $1.5 million gain on the extinguishment of these debt obligations is included in “Other, net” on our Unaudited Condensed Statements of Consolidated Operations with respect to the nine months ended September 30, 2019.

Lender Financial Covenants

We were in compliance with the financial covenants of our consolidated debt agreements at September 30, 2019.

Letters of Credit

At September 30, 2019, EPO had $101.4 million of letters of credit outstanding primarily related to our commodity hedging activities.