DEBT

9 Months Ended

Sep. 30, 2020


	Weighted Average Interest Rate
	September 30, 2020	Maturities	September 30, 2020		December 31, 2019
			(In thousands)




Debt:
U.S. commercial paper (1)	0.25%	2023	$	55,408	$	511,486
Canadian commercial paper (1)	0.99%	2023	96,040		136,199
Trade receivables program	—%	2021	—		—
Global revolving credit facility	1.25%	2023	800		8,104
Unsecured U.S. notes — Medium-term notes (1)(2)	3.36%	2021-2026	5,770,695		5,965,064
Unsecured U.S. obligations	2.53%	2021-2024	500,000		200,000
Unsecured foreign obligations	1.80%	2021-2024	271,639		270,719
Asset-backed U.S. obligations (3)	2.52%	2020-2026	720,925		807,374
Finance lease obligations and other		2020-2073	47,456		51,717
			7,462,963		7,950,663
Debt issuance costs			(26,391)		(25,875)
Total debt			7,436,572		7,924,788
Short-term debt and current portion of long-term debt			(1,133,396)		(1,154,564)
Long-term debt			$	6,303,176	$	6,770,224

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(1)Amounts are net of unamortized original issue discounts of $5 million and $6 million as of September 30, 2020 and December 31, 2019, respectively.

(2)Includes the impact from the fair market values of hedging instruments on our notes, which were not material as of both September 30, 2020 and December 31, 2019. The notional amount of the executed interest rate swaps designated as fair value hedges was $150 million and $525 million as of September 30, 2020 and December 31, 2019, respectively.

(3)Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment.

Debt Proceeds and Repayments

The following table includes our debt proceeds and repayments for the nine months ended September 30, 2020.




Debt Proceeds			Debt Repayments
(In thousands)
Medium-term notes	$	799,648	Medium-term notes	$	1,000,000
Trade receivables program	300,000		Trade receivables program	300,000
U.S. and foreign term loans and other	656,849		U.S. and foreign term loan, finance lease obligations, and other repayments	448,121

Total debt proceeds	$	1,756,497	Total debt repaid	$	1,748,121

In October 2020, we repaid the remaining $300 million outstanding balance on our floating-rate unsecured 364-day U.S. term loan.

Global Revolving Credit Facility

We maintain a $1.4 billion global revolving credit facility with a syndicate of twelve lending institutions, which matures in September 2023. The agreement provides for annual facility fees that range from 7.5 basis points to 20 basis points based on our long-term credit ratings. The annual facility fee is 15 basis points as of September 30, 2020, which applies to the total facility size of $1.4 billion. The credit facility is primarily used to finance working capital, but can also be used to issue up to $75 million in letters of credit (there were no letters of credit outstanding against the credit facility at September 30, 2020). At our option, the interest rate on borrowings under the credit facility is based on LIBOR, prime, federal funds or local equivalent rates. The credit facility contains no provisions limiting its availability in the event of a material adverse change to our business operations; however, the credit facility does contain standard representations and warranties, events of default, cross-default provisions and certain affirmative and negative covenants. As of September 30, 2020, there was $1.2 billion available under the credit facility.

In order to maintain availability of funding, we must maintain a ratio of debt to consolidated Net Worth of less than or equal to 300%. Consolidated Net Worth, as defined in the credit facility, represents shareholders' equity excluding any accumulated other comprehensive income or loss associated with our pension and other postretirement plans. In the second quarter of 2020, Net Worth was amended to also (1) exclude currency translation adjustment as reported in our consolidated balance sheet; (2) add back the after-tax charge to shareholders' equity which resulted from our adoption of the new lease accounting standard as of December 31, 2018 (amortized quarterly to 50% of the charge over a 7 year period); and (3) add back any potential non-cash FMS North America goodwill impairment charges, should they occur, up to a maximum amount. As of September 30, 2020, the ratio was 218%.

Our global revolving credit facility enables us to refinance short-term obligations on a long-term basis. Short-term commercial paper obligations are classified as long-term as we have both the intent and ability to refinance on a long-term basis. Starting in 2020, we have reflected all contractual maturities within the next twelve months in the current portion of long-term debt even though we may refinance these obligations on a long-term basis and have the ability to do so under our revolving credit facility. As of December 31, 2019, we classified $227 million of short-term commercial paper, $400 million of the current portion of long-term debt and $201 million of short-term debt as long-term debt as we had the intent and ability to refinance the current portion of these long-term debt on a long-term basis.

Trade Receivables Program

In February 2020, we increased the amount of maximum available proceeds from our trade receivables purchase and sale program from $225 million to $300 million. In April 2020, we extended the maturity of the trade receivables program to April 2021. As of September 30, 2020, the available proceeds under the program were $300 million.

Fair Value and Other

We had letters of credit and surety bonds outstanding of $484 million and $453 million as of September 30, 2020 and December 31, 2019, respectively, which primarily guarantee the payment of insurance claims.

The fair value of total debt (excluding capital lease and asset-backed U.S. obligations) was approximately $7.1 billion and $7.0 billion as of September 30, 2020 and December 31, 2019, respectively. For publicly-traded debt, estimates of fair value were based on market prices. For other debt, fair value was estimated based on a model-driven approach using rates currently available to us for debt with similar terms and remaining maturities. The fair value measurements of our publicly-traded debt and other debt were classified within Level 2 of the fair value hierarchy. The carrying amounts reported in the Condensed Consolidated Balance Sheets for “Cash and cash equivalents,” “Receivables, net” and “Accounts payable” approximate fair value due to the immediate or short-term maturities of these financial instruments.