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Debt

3 Months Ended

Mar. 31, 2020

Public Debt

During the three months ended March 31, 2019, the following activity occurred:

•

We issued $1.0 billion of 4.00 percent Senior Notes due April 1, 2029. Proceeds from this debt issuance totaled $992 million before deducting the underwriting discount and other debt issuance costs. The proceeds were used to redeem our 6.125 percent Senior Notes due February 1, 2020 (6.125 percent Senior Notes) for $871 million, or 102.48 percent of stated value, which included an early redemption fee of $21 million that is reflected in “other income, net” in our statement of income for the three months ended March 31, 2019.


•	In connection with the completion of the Merger Transaction, Valero Energy Corporation, the parent company, entered into a guarantee agreement to fully and unconditionally guarantee the prompt payment, when due, of the following debt issued by VLP, one of its wholly owned subsidiaries, that was outstanding as of March 31, 2020:


◦	4.375 percent Senior Notes due December 15, 2026; and


◦	4.5 percent Senior Notes due March 15, 2028.

Effective March 31, 2020, we early applied the U.S. Securities and Exchange Commission’s (SEC’s) Final Rule Release No. 33-10762, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities. This rule allows us to cease providing the previously required condensed consolidating financial information in our periodic reports while the senior notes issued by VLP noted above are outstanding,

as VLP’s reporting obligation was suspended on January 22, 2019 in connection with the completion of the Merger Transaction.

During the three months ended March 31, 2020, there was no issuance or redemption activity related to our public debt.

On April 16, 2020, we issued $850 million of 2.700 percent Senior Notes due April 15, 2023 and $650 million of 2.850 percent Senior Notes due April 15, 2025. Proceeds from these debt issuances totaled $1.499 billion before deducting the underwriting discount and other debt issuance costs.

Credit Facilities

Summary of Credit Facilities

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):



				March 31, 2020
	Facility Amount		Maturity Date	Outstanding Borrowings		Letters of Credit Issued (a)		Availability
Committed facilities:
Valero Revolver	$	4,000	March 2024	$	—	$	34	$	3,966
Canadian Revolver	C$	150	November 2020	C$	—	C$	5	C$	145
Accounts receivable sales facility	$	1,300	July 2020	$	400	n/a		$	900
Letter of credit facility	$	50	November 2020	n/a		$	—	$	50
Committed facilities of VIE (b):
IEnova Revolver	$	510	February 2028	$	418	n/a		$	92
Uncommitted facilities:
Letter of credit facilities	n/a		n/a	n/a		$	118	n/a

___________________


(a)	Letters of credit issued as of March 31, 2020 expire at various times in 2020 through 2021.


(b)	Creditors of our VIE do not have recourse against us.

Accounts Receivable Sales Facility

During the three months ended March 31, 2020, we sold $300 million of eligible receivables under our accounts receivable sales facility. As of March 31, 2020 and December 31, 2019, the variable interest rate on the accounts receivable sales facility was 2.1619 percent and 2.3866 percent, respectively.

In April 2020, the available borrowing capacity under our accounts receivable sales facility decreased due to the reduction in our receivables as a result of the significant decline in product prices. On April 29, 2020, we repaid $400 million of borrowings under the facility and the available capacity to borrow was $512 million.

IEnova Revolver

During the three months ended March 31, 2020 and 2019, Central Mexico Terminals (as described in Note 8) borrowed $70 million and $23 million, respectively, and had no repayments under a combined $510 million unsecured revolving credit facility (IEnova Revolver) with IEnova (defined in Note 8). As of March 31, 2020 and December 31, 2019, the variable interest rate was 5.595 percent and 5.749 percent, respectively.

364-day Revolving Credit Facility

On April 13, 2020, we entered into an $875 million 364-Day Credit Agreement (the 364-day Revolving Credit Facility) with several lenders. This facility provides for a revolving credit facility in an aggregate principal amount of up to $875 million and matures 364 days from April 13, 2020.

Borrowings under this facility bear interest at the base rate or the eurodollar rate (at our election) plus an applicable rate ranging from 0.150 percent to 1.700 percent, based upon the elected interest rate type and our debt ratings from certain rating agencies. The facility requires us to pay a commitment fee accruing on the daily amount of used and unused commitments of the lenders, also based upon our debt ratings mentioned above. The interest and commitment fees under this facility are payable quarterly. The facility also requires us to pay a customary agency fee to the administrative agent. The facility contains various customary covenants and events of default.

Other Disclosures

“Interest and debt expense, net of capitalized interest” is comprised as follows (in millions):



	Three Months Ended March 31,
	2020		2019
Interest and debt expense	$	145	$	136
Less: Capitalized interest	20		24
Interest and debt expense, net of capitalized interest	$	125	$	112