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Financial Instruments and Other Guarantees
3 Months Ended
Mar. 31, 2021
Financial Instruments And Guarantees [Abstract]  
Financial Instruments and Other Guarantees Financial Instruments and Other Guarantees
In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-sheet risk and are not reflected in the accompanying condensed consolidated balance sheets. At March 31, 2021, such instruments included $1,570.8 million of surety bonds and $423.4 million of letters of credit. Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees. The Company periodically evaluates the instruments for on-balance sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance. The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying condensed consolidated balance sheets.
In connection with the Refinancing Transactions described in Note 11. “Long-term Debt,” at the Settlement Date, all letters of credit issued under the Company’s former revolving credit facility were deemed issued under the Company LC Agreement in support of the same obligations.
The Company is required to provide various forms of financial assurance in support of its mining reclamation obligations in the jurisdictions in which it operates. Such requirements are typically established by statute or under mining permits. At March 31, 2021, the Company’s asset retirement obligations of $735.9 million were supported by surety bonds of $1,394.5 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement. Letters of credit issued at March 31, 2021 which served as collateral for surety bonds in support of asset retirement obligations amounted to $297.7 million.
Accounts Receivable Securitization
The Company is party to an accounts receivable securitization agreement (Securitization Program) which expires in April 2022 and provides up to $250.0 million in funding, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program, from time to time. Funding capacity under the Securitization Program may also be utilized for letters of credit in support of other obligations. The borrowings under the Securitization Program bear interest at LIBOR plus 1.5% per annum and remain outstanding throughout the term of the agreement, subject to the Company maintaining sufficient eligible receivables, by continuing to contribute trade receivables, unless an event of default occurs. The Securitization Program is subject to customary events of default.
Under the terms of the Securitization Program, the Company contributes the trade receivables of its participating subsidiaries on a revolving basis to a wholly-owned, bankruptcy-remote subsidiary, which then sells the receivables to unaffiliated banks. The Securitization Program does not receive off-balance sheet accounting treatment due to the Company’s ability to repurchase the receivables in certain circumstances.
At March 31, 2021, the Company had no outstanding borrowings and $120.8 million of letters of credit issued under the Securitization Program. The letters of credit were primarily in support of portions of the Company’s obligations for property and casualty insurance. Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $0.8 million at March 31, 2021. The Company had $43.5 million of collateral posted under the Securitization Program at March 31, 2021 and none at December 31, 2020. The Company incurred interest and fees associated with the Securitization Program of $0.7 million during the three months ended March 31, 2021 and 2020, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.
Cash Collateral Arrangements and Restricted Cash
From time to time, the Company is required to remit cash to certain regulatory authorities and other third parties as collateral for financial assurances associated with a variety of long-term obligations and commitments surrounding employee related matters and the mining, reclamation and shipping of its production. At March 31, 2021, the Company had $43.5 million of cash collateral and restricted cash requirements due to outstanding letters of credit temporarily exceeding the balance of eligible receivables at quarter-end. The Company had no such requirements at December 31, 2020.
Other
Substantially all of the Company’s U.S. subsidiaries provide financial guarantees under long-term debt agreements entered into by the Company. The maximum amounts payable under the Company’s debt agreements are equal to the respective principal and interest payments.