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Debt and Capital Lease Obligations | 9 Months Ended
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Sep. 30, 2018
Debt and Capital Lease Obligations [Abstract] |
DEBT AND CAPITAL LEASE OBLIGATIONS |
5. | DEBT AND CAPITAL LEASE OBLIGATIONS
Debt During the nine months ended September 30, 2018, the following activity occurred:
• | We issued in a public offering $750 million aggregate principal amount of our 4.35 percent Senior Notes due June 1, 2028. Gross proceeds from this debt issuance were $749 million before deducting the underwriting discount and other debt issuance costs totaling $7 million. The proceeds were used to redeem our 9.375 percent Senior Notes due March 15, 2019 (9.375 percent Senior Notes) for $787 million, which includes an early redemption fee of $37 million that was charged to other income, net.
• | VLP issued in a public offering $500 million aggregate principal amount of its 4.5 percent Senior Notes due March 15, 2028. Gross proceeds from this debt issuance were $498 million before deducting the underwriting discount and other debt issuance costs totaling $5 million. The proceeds are available only to the operations of VLP and were used to repay the outstanding balance of $410 million on VLP’s $750 million senior unsecured revolving credit facility (the VLP Revolver) and $85 million of its notes payable to us, which is eliminated in consolidation.
• | Central Mexico Terminals, which is the name used by us to refer to certain of our consolidated VIEs and is further described and defined in Note 8, entered into a combined $340 million unsecured revolving credit facility (IEnova Revolver) with IEnova (defined in Note 8). Central Mexico Terminals borrowed $71 million and had no repayments under the IEnova Revolver. The IEnova Revolver matures in February 2028. However, IEnova may terminate the IEnova Revolver at any time and demand repayment of all outstanding amounts; therefore, such amounts are reflected in current portion of debt. The IEnova Revolver is available only to the operations of Central Mexico Terminals, and the creditors of Central Mexico Terminals do not have recourse against Valero.
Outstanding borrowings under the IEnova Revolver bear interest at the three-month LIBO rate for the applicable interest period in effect from time to time plus the applicable margin. The interest rate under the IEnova Revolver is subject to adjustment, with agreement by both parties, based upon changes in market conditions. As of September 30, 2018, the variable rate was 5.987 percent.
• | We retired $137 million of debt assumed in connection with the Peru Acquisition with available cash on hand.
During the nine months ended September 30, 2017, we had no significant debt activity. We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted):
|  |  |  |  |  | September 30, 2018
|  | Facility Amount |  | Maturity Date |  | Outstanding Borrowings |  | Letters of Credit Issued |  | Availability
Committed facilities: |  |  |  |  |  |  |  |  |  |
Valero Revolver |  | $ | 3,000 |  |  | November 2020 |  | $ | — |  |  | $ | 60 |  |  | $ | 2,940 |
VLP Revolver |  | $ | 750 |  |  | November 2020 |  | $ | — |  |  | $ | — |  |  | $ | 750 |
IEnova Revolver |  | $ | 340 |  |  | February 2028 |  | $ | 71 |  |  | n/a |  |  | $ | 269 |
Canadian Revolver (a) |  | C$ | 75 |  |  | November 2018 |  | C$ | — |  |  | C$ | 5 |  |  | C$ | 70 |
Accounts receivable sales facility |  | $ | 1,300 |  |  | July 2019 |  | $ | 100 |  |  | n/a |  |  | $ | 1,200 |
Letter of credit facility (a) |  | $ | 100 |  |  | November 2018 |  | n/a |  |  | $ | — |  |  | $ | 100 |
Uncommitted facilities: |  |  |  |  |  |  |  |  |  |
Letter of credit facilities |  | n/a |  |  | n/a |  | n/a |  |  | $ | 307 |  |  | n/a |
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(a) | This facility is expected to be amended to extend the maturity date from November 2018 to November 2019.
Letters of credit issued as of September 30, 2018 expire at various times in 2018 through 2020. As of September 30, 2018 and December 31, 2017, the variable interest rate on the accounts receivable sales facility was 2.7959 percent and 2.0387 percent, respectively. Other Disclosures Interest and debt expense, net of capitalized interest is comprised of the following (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Interest and debt expense | $ | 134 |  |  | $ | 134 |  |  | $ | 417 |  |  | $ | 402 |
Less capitalized interest | 23 |  |  | 20 |  |  | 61 |  |  | 48 |
Interest and debt expense, net of capitalized interest | $ | 111 |  |  | $ | 114 |  |  | $ | 356 |  |  | $ | 354 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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