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Debt | 12 Months Ended
--- | ---
Dec. 31, 2013
Debt |
Debt | Note 9—Debt Debt consisted of the following as of the dates indicated (in millions):
|  | December 31, |  | December 31, |
|  | 2013 |  | 2012 |
SHORT-TERM DEBT |  |  |  |  |
Credit Facilities (1): |  |  |  |  |
PAA senior secured hedged inventory facility, bearing a weighted-average interest rate of 1.6% at December 31, 2012 (2) |  | $ | — |  | $ | 665 |
PAA senior unsecured revolving credit facility, bearing a weighted-average interest rate of 2.4% at December 31, 2012 (2) |  | — |  | 92 |
PNG senior unsecured revolving credit facility, bearing a weighted-average interest rate of 2.1% at December 31, 2012 (3) |  | — |  | 77 |
PAA commercial paper notes, bearing a weighted-average interest rate of 0.33% at December 31, 2013 (2) |  | 1,109 |  | — |
5.63% senior notes due December 2013 |  | — |  | 250 |
Other |  | 4 |  | 2 |
Total short-term debt |  | 1,113 |  | 1,086 |
LONG-TERM DEBT |  |  |  |  |
Senior Notes: |  |  |  |  |
5.25% senior notes due June 2015 |  | 150 |  | 150 |
3.95% senior notes due September 2015 |  | 400 |  | 400 |
5.88% senior notes due August 2016 |  | 175 |  | 175 |
6.13% senior notes due January 2017 |  | 400 |  | 400 |
6.50% senior notes due May 2018 |  | 600 |  | 600 |
8.75% senior notes due May 2019 |  | 350 |  | 350 |
5.75% senior notes due January 2020 |  | 500 |  | 500 |
5.00% senior notes due February 2021 |  | 600 |  | 600 |
3.65% senior notes due June 2022 |  | 750 |  | 750 |
2.85% senior notes due January 2023 |  | 400 |  | 400 |
3.85% senior notes due October 2023 |  | 700 |  | — |
6.70% senior notes due May 2036 |  | 250 |  | 250 |
6.65% senior notes due January 2037 |  | 600 |  | 600 |
5.15% senior notes due June 2042 |  | 500 |  | 500 |
4.30% senior notes due January 2043 |  | 350 |  | 350 |
Unamortized discounts |  | (15 | ) | (15 | )
Senior notes, net of unamortized discounts |  | 6,710 |  | 6,010 |
Credit Facilities and Other Long-Term Debt (1): |  |  |  |  |
PNG senior unsecured revolving credit facility, bearing a weighted-average interest rate of 2.1% at December 31, 2012 (3) |  | — |  | 105 |
PNG GO Bond term loans, bearing a weighted-average interest rate of 1.5% at December 31, 2012 (3) |  | — |  | 200 |
Other |  | 5 |  | 5 |
Total long-term debt |  | 6,715 |  | 6,320 |
Total debt (2) (3) (4) |  | $ | 7,828 |  | $ | 7,406 |
(1) During 2013 and 2012, we renewed, extended or refinanced our principal bank credit facilities. See “Credit Facilities” below for further discussion. (2) We classify as short-term certain borrowings under our commercial paper program, PAA senior unsecured revolving credit facility and PAA senior secured hedged inventory facility. These borrowings are primarily designated as working capital borrowings, must be repaid within one year and are primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits. (3) On December 31, 2013, in connection with the completion of the PNG Merger, all of PNG’s outstanding debt obligations were repaid and terminated. See Note 10 for further discussion of the PNG Merger. (4) Our fixed-rate senior notes (including current maturities) had a face value of approximately $6.7 billion and $6.3 billion as of December 31, 2013 and 2012, respectively. We estimated the aggregate fair value of these notes as of December 31, 2013 and 2012 to be approximately $7.2 billion and $7.3 billion, respectively. Our fixed-rate senior notes are traded among institutions, and these trades are routinely published by a reporting service. Our determination of fair value is based on reported trading activity near year end. We estimate that the carrying value of outstanding borrowings under our credit facilities and agreements and commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for both our senior notes and credit facilities are based upon observable market data and are classified within Level 2 of the fair value hierarchy. Commercial Paper Program In August 2013, we established a commercial paper program under which we may issue, from time to time, privately placed, unsecured commercial paper notes for up to a maximum aggregate amount outstanding at any time of $1.5 billion. Such notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility; as such, any borrowings under our commercial paper program reduce the available capacity under these facilities. Credit Facilities PAA senior secured hedged inventory facility. In August 2013, we amended our senior secured hedged inventory facility agreement to, among other things, extend the maturity date of the facility by two years to August 2016. The agreement also provides for one or more one-year extensions, subject to applicable approval. The facility has a committed borrowing capacity of $1.4 billion, of which $400 million is available for the issuance of letters of credit. Subject to obtaining additional or increased lender commitments, the committed amount of the facility may be increased to $1.9 billion. Proceeds from the facility are being used to finance purchased or stored hedged inventory. Obligations under the committed facility are secured by the financed inventory and the associated accounts receivable and will be repaid from the proceeds of the sale of the financed inventory. Borrowings accrue interest based, at our election, on either the Eurocurrency Rate or the Base Rate, in each case plus a margin based on our credit rating at the applicable time. PAA senior unsecured revolving credit facility. In August 2013, we amended our senior unsecured revolving credit facility agreement to, among other things, extend the maturity date by two years to August 2018. The agreement also provides for one or more one-year extensions, subject to applicable approval. The facility has a committed borrowing capacity of $1.6 billion which contains an accordion feature that enables us to increase the committed capacity to $2.1 billion, subject to obtaining additional or increased lender commitments. The credit agreement also provides for the issuance of letters of credit. Borrowings accrue interest based, at our election, on the Eurocurrency Rate, the Base Rate or the Canadian Prime Rate, in each case plus a margin based on our credit rating at the applicable time. PNG senior unsecured credit agreement. The PNG senior unsecured credit agreement provided for (i) $350 million under a revolving credit facility and (ii) two $100 million GO Bond term loans. PNG’s revolving credit facility included the ability to issue letters of credit. Borrowings under the revolving credit facility accrued interest, at PNG’s election, on either the Eurodollar Rate or the Base Rate, in each case plus an applicable margin. The GO Bond term loans accrued interest in accordance with the interest payable on the related GO Bonds purchased with respect thereto as provided in such GO Bonds and the GO Bonds Indenture pursuant to which such GO Bonds are issued and governed. On December 31, 2013, in connection with the completion of the PNG Merger, all outstanding borrowings were repaid under the credit facility and the related revolving credit commitments were terminated. We retained the effectiveness of the GO Bond Indenture, which may be utilized for a future tax-exempt $200 million debt issuance. Senior Notes Our senior notes are co-issued, jointly and severally, by Plains All American Pipeline, L.P. and a 100%-owned consolidated finance subsidiary (neither of which have independent assets or operations) and are unsecured senior obligations of such entities and rank equally in right of payment with existing and future senior indebtedness of the issuers. We may, at our option, redeem any series of senior notes at any time in whole or from time to time in part, prior to maturity, at the redemption prices described in the indentures governing the senior notes. In August 2011, as permitted under the indentures governing the senior notes, PAA released the guarantees of each subsidiary guarantor. As such, our senior notes are not guaranteed by any of our subsidiaries. Senior Notes Issuances In August 2013, we completed the sale and issuance of $700 million, 3.85% senior notes due October 15, 2023. The senior notes were sold at 99.792% of face value. Interest payments are due on April 15 and October 15 each year beginning on April 15, 2014. In December 2012, we completed the sale and issuance of $400 million, 2.85% senior notes due January 31, 2023 and $350 million, 4.30% senior notes due January 31, 2043. The senior notes were sold at 99.752% and 99.925% of face value, respectively. Interest payments are due on January 31 and July 31 each year, which began on July 31, 2013. In March 2012, we completed the sale and issuance of $750 million, 3.65% senior notes due June 1, 2022 and $500 million, 5.15% senior notes due June 1, 2042. The senior notes were sold at 99.823% and 99.755% of face value, respectively. Interest payments are due on June 1 and December 1 each year, which began on December 1, 2012. Senior Note Repayments and Redemptions On December 13, 2013, we repaid our $250 million 5.63% senior notes. We utilized cash on hand and available capacity under our commercial paper program to repay these notes. On September 4, 2012, we repaid our $500 million, 4.25% senior notes. We utilized cash on hand and available capacity under our credit facilities to repay these notes. On February 7, 2011, our $200 million 7.75% senior notes due 2012 were redeemed in full. In conjunction with the early redemption, we recognized a loss of approximately $23 million, recorded to “Other income/(expense), net” in our Consolidated Statement of Operations. We utilized cash on hand and available capacity under our credit facilities to redeem these notes. Maturities The weighted average life of our long-term debt outstanding at December 31, 2013 was approximately 11 years and the aggregate maturities for the next five years and thereafter are as follows (in millions):
Calendar Year |  | Payment |
2014 |  | $ | — |
2015 |  | 550 |
2016 |  | 175 |
2017 |  | 400 |
2018 |  | 600 |
Thereafter |  | 5,000 |
Total (1) |  | $ | 6,725 |
(1) Excludes aggregate unamortized net discount of approximately $15 million and other long-term obligations of approximately $5 million. Covenants and Compliance Our credit agreements (which impact our ability to access our commercial paper program) and the indentures governing the senior notes contain cross-default provisions. Our credit agreements prohibit declaration or payments of distributions on, or purchases or redemptions of, units if any default or event of default is continuing. In addition, the agreements contain various covenants limiting our ability to, among other things: · grant liens on certain property; · incur indebtedness, including capital leases; · sell substantially all of our assets or enter into a merger or consolidation; · engage in certain transactions with affiliates; and · enter into certain burdensome agreements. The PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility treat a change of control as an event of default and also require us to maintain a debt-to-EBITDA coverage ratio that will not be greater than 5.00 to 1.00 (or 5.50 to 1.00 on all outstanding debt during an acquisition period (generally, the period consisting of three fiscal quarters following an acquisition greater than $150 million)). For covenant compliance purposes, letters of credit and borrowings to fund hedged inventory and margin requirements are excluded when calculating the debt coverage ratio. A default under our credit facilities would permit the lenders to accelerate the maturity of the outstanding debt. As long as we are in compliance with our credit agreements, our ability to make distributions of available cash is not restricted. As of December 31, 2013, we were in compliance with the covenants contained in our credit agreements and indentures. Borrowings and Repayments Total borrowings under our credit agreements and commercial paper program for the years ended December 31, 2013, 2012 and 2011 were approximately $31.0 billion, $12.9 billion and $9.7 billion, respectively. Total repayments under our credit agreements and commercial paper program were approximately $31.0 billion, $12.2 billion and $10.9 billion for the years ended December 31, 2013, 2012 and 2011, respectively. The variance in total gross borrowings and repayments is impacted by various business and financial factors including, but not limited to, the timing, average term and method of general partnership borrowing activities. Letters of Credit In connection with our supply and logistics activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase of crude oil, NGL and natural gas. These letters of credit are issued under the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility, and our liabilities with respect to these purchase obligations are recorded in accounts payable on our balance sheet in the month the crude oil, NGL or natural gas is purchased. Generally, these letters of credit are issued for periods of up to seventy days and are terminated upon completion of each transaction. Additionally, we issue letters of credit to support insurance programs and construction activities. At December 31, 2013 and 2012, we had outstanding letters of credit of approximately $41 million and $24 million, respectively.

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- Definition The entire disclosure for 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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