Note 6—Debt

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

	June 30,		December 31,
	2014		2013
SHORT-TERM DEBT
PAA commercial paper notes, bearing a weighted-average interest rate of 0.29% and 0.33%, respectively (1)	$	760	$	1,109
Other	3		4
Total short-term debt	763		1,113

LONG-TERM DEBT
PAA senior notes, net of unamortized discounts of $16 and $15, respectively (2)	7,409		6,710
Credit Facilities and Other:
AAP term loan, bearing a weighted-average interest rate of 1.8% and 1.9%, respectively	500		500
AAP senior secured revolving credit facility, bearing a weighted-average interest rate of 1.7% and 2.2%, respectively	26		15
Other	5		5
Total long-term debt	7,940		7,230
Total debt (3)	$	8,703	$	8,343

(1) PAA commercial paper notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility, which mature in August 2018 and August 2016, respectively; as such, any borrowings under the PAA commercial paper program reduce the available capacity under these facilities. At June 30, 2014 and December 31, 2013, we classified $760 million and $1.1 billion, respectively, of borrowings under the PAA commercial paper program as short-term. 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) As of June 30, 2014, we have classified PAA’s $150 million, 5.25% senior notes due June 2015 as long-term based on the ability and intent to refinance them on a long-term basis.

(3) PAA’s fixed-rate senior notes had a face value of approximately $7.4 billion and $6.7 billion at June 30, 2014 and December 31, 2013, respectively. We estimated the aggregate fair value of these notes as of June 30, 2014 and December 31, 2013 to be approximately $8.2 billion and $7.2 billion, respectively. PAA’s 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 quarter end. We estimate that the carrying value of outstanding borrowings under credit facilities and agreements and commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for both the senior notes and credit facilities are based upon observable market data and are classified within Level 2 of the fair value hierarchy. See Note 10 for additional discussion of the fair value hierarchy.

Borrowings and Repayments

Total borrowings under credit agreements and the commercial paper program for the six months ended June 30, 2014 and 2013 were approximately $34.6 billion and $7.6 billion, respectively. Total repayments under credit agreements and the commercial paper program for the six months ended June 30, 2014 and 2013 were approximately $34.9 billion and $7.8 billion, 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. Additionally, we issue letters of credit to support insurance programs and construction activities. At June 30, 2014 and December 31, 2013 we had outstanding letters of credit of approximately $38 million and $41 million, respectively.

PAA Senior Notes Issuance

On April 23, 2014, PAA completed the issuance of $700 million, 4.70% senior notes due 2044 at a public offering price of 99.734%. Interest payments are due on June 15 and December 15 of each year, commencing on December 15, 2014. In anticipation of the issuance of these senior notes, PAA entered into $250 million notional principal amount of U.S. treasury locks in March and April 2014 to hedge the treasury rate portion of the interest rate on a portion of the notes. PAA terminated these treasury locks in April 2014. See Note 10 for additional disclosure.