Note 10—Debt

Debt consisted of the following as of the dates indicated (in millions):

	December 31,			December 31,
	2014			2013
SHORT-TERM DEBT
PAA commercial paper notes, bearing a weighted-average interest rate of 0.46% and 0.33%, respectively (1)	$	734		$	1,109
PAA senior notes:
5.25% senior notes due June 2015	150			—
3.95% senior notes due September 2015	400			—
Other	3			4
Total short-term debt	1,287			1,113

LONG-TERM DEBT
PAA senior notes:
5.25% senior notes due June 2015	—			150
3.95% senior notes due September 2015	—			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
2.60% senior notes due December 2019	500			—
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			700
3.60% senior notes due November 2024	750			—
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
4.70% senior notes due June 2044	700			—
4.90% senior notes due February 2045	650			—
Unamortized discounts	(18		)	(15		)
PAA senior notes, net of unamortized discounts	8,757			6,710
Other	5			5
Total long-term debt	8,762			6,715
Total debt (2)	$	10,049		$	7,828

(1)

At December 31, 2014 and 2013, we classified all of the borrowings under our commercial paper program as short-term as 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.

(2)

Our fixed-rate senior notes (including current maturities) had a face value of approximately $9.3 billion and $6.7 billion as of December 31, 2014 and 2013, respectively. We estimated the aggregate fair value of these notes as of December 31, 2014 and 2013 to be approximately $9.9 billion and $7.2 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 commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for our senior notes, credit facilities and commercial paper program 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. 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. In October 2014, the maximum aggregate borrowing capacity was increased from $1.5 billion to $3.0 billion.

Credit Facilities

PAA senior secured hedged inventory facility. The PAA senior secured hedged inventory 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 primarily used to finance purchased or stored hedged inventory, including NYMEX and ICE margin deposits. Such obligations under the committed facility are secured by the financed inventory and the associated accounts receivable and are 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. The agreement also provides for one or more one-year extensions, subject to applicable approval. In August 2014, we extended the maturity date of the facility by one year to August 2017 through the exercise of the option included in the current credit agreement.

PAA senior unsecured revolving credit facility. The PAA senior unsecured revolving credit facility has a committed borrowing capacity of $1.6 billion and 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. The agreement also provides for one or more one-year extensions, subject to applicable approval. In August 2014, we extended the maturity date of the facility by one year to August 2019 through the exercise of the option included in the current credit agreement.

PAA senior unsecured 364-day revolving credit facility. In January 2015, we entered into a 364-day senior unsecured credit agreement with a borrowing capacity of $1.0 billion. Borrowings will 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. The covenants, restrictions and events of default in the credit agreement are substantially the same as those in the PAA senior unsecured revolving credit facility agreement. See “-Covenants and Compliance” below.

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. Our senior notes are not guaranteed by any of our subsidiaries.

Senior Notes Issuances

The table below summarizes our issuances of senior unsecured notes during 2014, 2013 and 2012 (in millions):

Year	Description	Maturity	Face Value		Interest Payment Dates
2014	2.60% Senior Notes issued at 99.813% of face value	December 2019	$	500	June 15 and December 15
2014	4.90% Senior Notes issued at 99.876% of face value	February 2045	$	650	February 15 and August 15
2014	3.60% Senior Notes issued at 99.842% of face value	November 2024	$	750	May 1 and November 1
2014	4.70% Senior Notes issued at 99.734% of face value	June 2044	$	700	June 15 and December 15

2013	3.85% Senior Notes issued at 99.792% of face value	October 2023	$	700	April 15 and October 15

2012	2.85% Senior Notes issued at 99.752% of face value	January 2023	$	400	January 31 and July 31
2012	4.30% Senior Notes issued at 99.925% of face value	January 2043	$	350	January 31 and July 31
2012	3.65% Senior Notes issued at 99.823% of face value	June 2022	$	750	June 1 and December 1
2012	5.15% Senior Notes issued at 99.755% of face value	June 2042	$	500	June 1 and December 1

Senior Note Repayments

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.

Maturities

The weighted average life of our senior notes outstanding at December 31, 2014 was approximately 13 years and the aggregate maturities for the next five years and thereafter are as follows (in millions):

Calendar Year	Payment
2015	$	550
2016	175
2017	400
2018	600
2019	850
Thereafter	6,750
Total (1)	$		9,325

(1)

Excludes aggregate unamortized net discount of $18 million.

Covenants and Compliance

Our credit agreements (which impact our ability to access our commercial paper program because they provide the backstop that supports our short-term credit ratings) and the indentures governing our 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, 2014, 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, 2014, 2013 and 2012 were approximately $70.9 billion, $31.0 billion and $12.9 billion, respectively. Total repayments under our credit agreements and commercial paper program were approximately $71.3 billion, $31.0 billion and $12.2 billion for the years ended December 31, 2014, 2013 and 2012, 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, 2014 and 2013, we had outstanding letters of credit of $87 million and $41 million, respectively.