Debt

Debt consisted of the following (in millions):



	December 31, 2018			December 31, 2017
SHORT-TERM DEBT
Senior secured hedged inventory facility, bearing a weighted-average interest rate of 2.6% ⁽¹⁾	$	—		$	664
Other	66			73
Total short-term debt	66			737

LONG-TERM DEBT
Senior notes:
2.60% senior notes due December 2019 ⁽²⁾	500			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			750
4.65% senior notes due October 2025	1,000			1,000
4.50% senior notes due December 2026	750			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			700
4.90% senior notes due February 2045	650			650
Unamortized discounts and debt issuance costs	(59		)	(67		)
Senior notes, net of unamortized discounts and debt issuance costs	8,941			8,933
Other long-term debt:
Commercial paper notes, bearing a weighted-average interest rate of 2.4%, and senior secured hedged inventory facility borrowings ⁽²⁾	—			247
GO Zone term loans, net of debt issuance costs of $2, bearing a weighted-average interest rate of 3.1%	198			—
Other	4			3
Total long-term debt	9,143			9,183
Total debt ⁽³⁾	$	9,209		$	9,920


⁽¹⁾	We classified these commercial paper notes and credit facility borrowings as short-term as of December 31, 2017, as these notes and borrowings were primarily designated as working capital borrowings, were required to be repaid within one year and were primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.


⁽²⁾	As of December 31, 2018, we classified our $500 million, 2.60% senior notes due December 2019 as long-term, and as of December 31, 2017, we classified a portion of our commercial paper notes and senior unsecured hedged inventory facility borrowings as long-term based on our ability and intent to refinance such amounts on a long-term basis.

⁽³⁾

Our fixed-rate senior notes had a face value of approximately $9.0 billion at both December 31, 2018 and 2017. We estimated the aggregate fair value of these notes as of December 31, 2018 and 2017 to be approximately $8.6 billion and $9.1 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 in Level 2 of the fair value hierarchy.

Commercial Paper Program

We have a commercial paper program under which we may issue (and have outstanding at any time) up to $3.0 billion in the aggregate of privately placed, unsecured commercial paper notes. Such notes are backstopped by our senior unsecured revolving credit facility and our senior secured hedged inventory facility; as such, any borrowings under our commercial paper program reduce the available capacity under these facilities.

Credit Agreements

Senior secured hedged inventory facility. We have a credit agreement that provides for a senior secured hedged inventory facility with 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 capacity 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 2018, we amended this agreement to, among other things, extend the maturity date of the facility to August 2021 for each extending lender. The maturity date with respect to each non-extending lender (which represent aggregate commitments of approximately $35 million out of total commitments of $1.4 billion from all lenders) remains August 2020.

Senior unsecured revolving credit facility. We have a credit agreement that provides for a senior unsecured revolving credit facility with a committed borrowing capacity of $1.6 billion. Subject to obtaining additional or increased lender commitments, the committed capacity may be increased to $2.1 billion. 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 2018, we amended this agreement to, among other things, extend the maturity date of the facility to August 2023 for each extending lender. The maturity date with respect to each non-extending lender (which represent aggregate commitments of $35 million out of total commitments of $1.6 billion from all lenders) remains August 2022.

Senior unsecured 364-day revolving credit facility. Our credit agreement that provided for a 364-day senior unsecured revolving credit facility matured in August 2018.

GO Zone term loans. In August 2018, we entered into an agreement for two $100 million term loans (the “GO Zone term loans”) from the remarketing of our $100,000,000 Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds (SG Resources Mississippi, LLC Project), Series 2009 and our $100,000,000 Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds (SG Resources Mississippi, LLC Project), Series 2010 (collectively, the “GO Bonds”). The GO Zone term loans accrue interest in accordance with the interest payable on the related GO Bonds as provided in the GO Bonds Indenture pursuant to which such GO Bonds are issued and governed. The purchasers of the two GO Zone term loans have the right to put, at par, the GO Zone term loans in July 2023. The GO Bonds mature by their terms in May 2032 and August 2035, respectively.

AAP senior secured credit agreement. In connection with the Simplification Transactions, on November 15, 2016, we assumed all of AAP’s then outstanding borrowings under the AAP senior secured credit agreement, and immediately repaid such amounts and canceled the credit agreement. See Note 1 for further discussion of the Simplification Transactions.

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 2016 (in millions):



Year	Description	Maturity	Face Value		Interest Payment Dates
2016	4.50% Senior Notes issued at 99.716% of face value	December 2026	$	750	June 15 and December 15

We did not issue any senior unsecured notes during the years ended December 31, 2018 or 2017.

Senior Notes Repayments. We did not repay any senior unsecured notes during 2018. During 2017 and 2016, we repaid the following senior unsecured notes (in millions):



Year	Description	Repayment Date
2017	$400 million 6.13% Senior Notes due January 2017	January 2017	⁽¹⁾
2017	$600 million 6.50% Senior Notes due May 2018	December 2017	^{(1) (2)}
2017	$350 million 8.75% Senior Notes due May 2019	December 2017	^{(1) (2)}

2016	$175 million 5.88% Senior Notes due August 2016	August 2016	⁽¹⁾


⁽¹⁾	We repaid these senior notes with cash on hand and proceeds from borrowings under our credit facilities and commercial paper program.


⁽²⁾	In conjunction with the early redemptions of these senior notes, we recognized a loss of approximately $40 million, recorded to “Other income/(expense), net” in our Consolidated Statement of Operations.

Maturities

The weighted average maturity of our long-term debt outstanding at December 31, 2018 was approximately 11 years. The following table presents the aggregate contractually scheduled maturities of such long-term debt for the next five years and thereafter. The amounts presented exclude unamortized discounts and debt issuance costs.



Calendar Year	Payment (in millions)
2019	$	500
2020	$	500
2021	$	600
2022	$	750
2023	$	1,300
Thereafter	$	5,554

Covenants and Compliance

The credit agreements for our revolving credit facilities (which impact our ability to access our commercial paper program because they provide the financial backstop that supports our short-term credit ratings) and our term loans 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 credit agreements for our senior unsecured revolving credit facility, senior secured hedged inventory facility and GO Zone term loans treat a change of control as an event of default and also require us to maintain a debt-to-EBITDA coverage ratio that, on a trailing four-quarter basis, 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, Consolidated EBITDA may include certain adjustments, including those for material projects and certain non-recurring expenses. Additionally, 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 agreements or indentures would permit the lenders to accelerate the maturity of the outstanding debt. As long as we are in compliance with the provisions contained in our credit agreements, our ability to make distributions of available cash is not restricted. As of December 31, 2018, 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, 2018, 2017 and 2016 were approximately $45.4 billion, $60.8 billion and $60.3 billion, respectively. Total repayments under our credit agreements and commercial paper program were approximately $46.3 billion, $61.5 billion and $61.0 billion for the years ended December 31, 2018, 2017 and 2016, 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 and transportation 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, derivative transactions, including hedging-related margin obligations, and construction activities. At December 31, 2018 and 2017, we had outstanding letters of credit of $184 million and $166 million, respectively.

Debt Issuance Costs

Costs incurred in connection with the issuance of senior notes are recorded as a direct deduction from the related debt liability and are amortized using the straight-line method over the term of the related debt. Use of the straight-line method does not differ materially from the “effective interest” method of amortization.