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Long-Term Debt and Finance Lease Obligations

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt and Finance Lease Obligations

(7) Long-Term Debt and Finance Lease Obligations

Long-term debt and finance lease obligations consist of the following:

(in millions)	September 30, 2019				December 31, 2018
CVR Partners:
9.25% Senior Secured Notes due 2023 (1)(3)	$	645			$	645
6.50% Senior Notes due 2021	2				2
Unamortized discount and debt issuance costs	(16		)		(18		)
Total CVR Partners Debt	$	631			$	629
CVR Refining:
6.50% Senior Notes due 2022 (2)(4)	$	500			$	500
Finance lease obligations, net of current portion (5)	62				41
Unamortized debt issuance cost	(3		)		(3		)
Total CVR Refining Debt	559				538
Total Long-Term Debt and Finance Lease Obligations	$	1,190			$	1,167

(1) This debt was issued at a $16 million discount which is being amortized, as interest expense, over the remaining term of the debt. Debt issuance costs associated with this debt totaled $9 million.

(2) Debt issuance costs associated with this debt totaled $9 million. On January 29, 2019, the 2022 Senior Notes were amended such that CVR Energy was included as the primary guarantor, on a senior unsecured basis, of the 2022 Senior Notes. The CVR Energy guarantee is full and unconditional and joint and several. See Note 15 (“Guarantor Financial Information”) for further discussion and implications of this change to guarantor.

(3) The estimated fair value of the 9.25% Senior Notes due 2023 was approximately $672 million and $671 million as of September 30, 2019 and December 31, 2018, respectively.

(4) The estimated fair value of the 2022 Senior Notes was approximately $506 million and $493 million as of September 30, 2019 and December 31, 2018, respectively.

(5) Current portion of finance lease obligations was approximately $5 million and $3 million as of September 30, 2019 and December 31, 2018, respectively.

Credit Facilities

(in millions)	Total Capacity				Amount Borrowed as of September 30, 2019				Outstanding Letters of Credit				Available Capacity as of September 30, 2019				Maturity Date
CVR Refining:
Amended and Restated Asset Based (“Amended and Restated ABL”) Credit Facility (1)	$	400			$	—			$	7			$	393			November 14, 2022
CVR Partners:
Asset Based (“AB”) Credit Facility (2)	$	48			$	—			$	—			$	48			September 30, 2021

(1) Loans under the Amended and Restated ABL Credit Facility initially bear interest at an annual rate equal to (i) 1.50% plus LIBOR or (ii) 0.50% plus a base rate, subject to quarterly excess availability.

(2) Loans under the AB Credit Facility initially bear interest at an annual rate equal to (i) 2.00% plus LIBOR or (ii) 1.00% plus a base rate, subject to a 0.50% step-down based on the previous quarter’s excess availability.

Covenant Compliance

The Company is in compliance with all covenants of the Amended and Restated ABL and AB credit facilities and the senior notes as of September 30, 2019.

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- Definition

The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-URI http://asc.fasb.org/topic&trid=2208923

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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- References

No definition available.

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