Debt

3 Months Ended

Mar. 31, 2020

The Company’s short and long-term debt consists of the following:



	March 31		December 31
(In millions)	2020		2019
Short-Term Debt:
Short-term borrowings	$	36	$	37

Long-Term Debt:
Term debt facility, net	$	348	$	348
Revolving credit facility	400		—
Total long-term debt, net	$	748	$	348

Short-Term Debt

Short-term borrowings are primarily related to the Company's non-U.S. joint ventures and are payable in Chinese Renminbi and India Rupee. As of March 31, 2020, the available borrowings under these affiliate credit facilities are $117 million. Certain of these facilities have pledged assets as security or accompanied by corporate credit support.

Long-Term Debt

On March 19, 2020, the Company borrowed the entire amount of revolving loans available under the Revolving Credit Facility to increase its cash position and maximize its flexibility in light of the current uncertainty surrounding the impact of COVID-19. As of March 31, 2020, the Company had $350 million of Term Facility loans and $400 million of Revolving Credit Facility loans outstanding under the Company's credit agreement (the "Credit Agreement"), both facilities will mature during 2024.

Interest on the Term Facility loans accrue at a rate equal to a LIBOR-based rate plus an applicable margin of 1.75% per annum. Revolving Credit Facility loans accrue interest at a rate equal to a LIBOR-based rate plus an applicable margin of between 1.00% - 2.00%, as determined by the Company's total gross leverage ratio. As of March 31, 2020, the all-in rates for the Term Facility and Revolving Credit Facility loans were 2.79% and 2.49%, respectively.

The Credit Agreement requires compliance with customary affirmative and negative covenants and contains customary events of default. The Revolving Credit Facility also requires that the Company maintain a total net leverage ratio no greater than 3.50:1.00. During any period when the Company’s corporate and family ratings meet investment grade ratings, certain of the negative covenants shall be suspended. As of March 31, 2020, the Company was in compliance with all its debt covenants.

The Revolving Credit Facility also provides $75 million availability for the issuance of letters of credit and a maximum of $20 million for swing line borrowings. Any amount of the facility utilized for letters of credit or swing line loans outstanding will reduce the amount available under the existing Revolving Credit Facility. The Company may request increases in the limits under the Credit Agreement and may request the addition of one or more term loan facilities. Outstanding borrowings may be prepaid without penalty (other than borrowings made for the purpose of reducing the effective interest rate margin or weighted average yield of the loans). There are mandatory prepayments of principal in connection with: (i) excess cash flow sweeps above certain leverage thresholds, (ii) certain asset sales or other dispositions, (iii) certain refinancing of indebtedness and (iv) over-advances under the Revolving Credit Facility. There are no excess cash flow sweeps required at the Company’s current leverage level.

All obligations under the Credit Agreement and obligations with respect to certain cash management services and swap transaction agreements between the Company and its lenders are unconditionally guaranteed by certain of the Company’s subsidiaries. Under the terms of the Credit Agreement, any amounts outstanding are secured by a first-priority perfected lien (subject to certain exceptions) on substantially all property of the Company and the subsidiaries party to the security agreement, subject to certain limitations.

Other

The Company has a $5 million letter of credit facility, whereby the Company is required to maintain a cash collateral account equal to 103% (110% for non-U.S. dollar denominated letters) of the aggregate stated amount of issued letters of credit and must reimburse any amounts drawn under issued letters of credit. The Company had $2 million of outstanding letters of credit issued under this facility secured by restricted cash, as of March 31, 2020. Additionally, the Company had $12 million of locally issued letters of credit with less than $1 million of collateral as of March 31, 2020, to support various tax appeals, customs arrangements and other obligations at its local affiliates.