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Note 7 - Debt
 3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

7. DEBT

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Our outstanding debt, net of debt issuance costs, consisted of the following (dollars in millions):

​

  

March 31,

  

December 31,

 
  

2023

  

2022

 

Senior Credit Facilities:

        

Revolving facility

 $—  $55 

Amounts outstanding under A/R programs

  —   166 

Senior notes

  1,462   1,455 

Variable interest entities

  33   35 

Other

  25   26 

Total debt

 $1,520  $1,737 

Current portion of debt

 $11  $66 

Long-term portion of debt

  1,509   1,671 

Total debt

 $1,520  $1,737 

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Direct and Subsidiary Debt

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Substantially all of our debt, including the facilities described below, has been incurred by our subsidiaries (primarily Huntsman International). Huntsman Corporation is not a guarantor of such subsidiary debt.

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Certain of our subsidiaries have third-party debt agreements that contain certain restrictions with regard to dividends, distributions, loans or advances. In certain circumstances, the consent of a third party would be required prior to the transfer of any cash or assets from these subsidiaries to us.

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Debt Issuance Costs

​

We record debt issuance costs related to a debt liability on the balance sheets as a reduction to the face amount of that debt liability. As of both  March 31, 2023 and December 31, 2022, the amount of debt issuance costs directly reducing the debt liability was $8 million. We amortize debt issuance costs using either a straight line or effective interest method, depending on the debt agreement, and record them as interest expense.

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Revolving Credit Facility

 

On May 20, 2022, Huntsman International entered into a new $1.2 billion senior unsecured revolving credit facility (the “2022 Revolving Credit Facility”). Borrowings will bear interest at the rates specified in the credit agreement governing the 2022 Revolving Credit Facility, which will vary based on the type of loan and Huntsman International’s debt ratings. Under the credit agreement, the interest rate margin and the commitment fee rates are also subject to adjustments based on the Company’s performance on specified sustainability target thresholds with respect to annual percentage reduction in operational greenhouse gas emissions intensity and annual percentage reduction in water consumption intensity. Unless previously terminated in accordance with its terms, the credit agreement will mature in May 2027. Huntsman International may increase the 2022 Revolving Credit Facility commitments up to an additional $500 million, subject to the satisfaction of certain conditions. 

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The following table presents certain amounts under our 2022 Revolving Credit Facility as of  March 31, 2023 (monetary amounts in millions):

​

          

Unamortized

           
          

discounts and

           
  

Committed

  

Principal

  

debt issuance

  

Carrying

       

Facility

 

amount

  

outstanding

  

costs

  

value

  

Interest rate(2)

 

Maturity

 

2022 Revolving Credit Facility

 $1,200  $—(1) $—(1) $—(1) 

Term Secured Overnight Financing Rate (“SOFR”) plus 1.475%

  May 2027 

 

(1)

On March 31, 2023, we had an additional $13 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our 2022 Revolving Credit Facility.

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(2)

Interest rates on borrowings under the 2022 Revolving Credit Facility vary based on the type of loan and Huntsman International’s debt ratings. The representative interest rate for U.S. dollar borrowings as of March 31, 2023 was 1.475% above term SOFR.

 

A/R Programs

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Our U.S. accounts receivable securitization program (“U.S. A/R Programs”) and our European accounts receivable securitization program (“EU A/R Program” and collectively with the U.S. A/R Program, “A/R Programs”) are structured so that we transfer certain of our trade receivables to the U.S. special purpose entity (“U.S. SPE”) and the European special purpose entity (“EU SPE”) in transactions intended to be true sales or true contributions. The receivables collateralize debt incurred by the U.S. SPE and the EU SPE.

 

On July 1, 2021, we entered into amendments to our A/R Programs that, among other things, extended the respective scheduled termination dates of our A/R Programs from April 2022 to July 2024.

 

Information regarding our A/R Programs as of March 31, 2023 was as follows (monetary amounts in millions):

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Maximum funding

  

Amount

   

Facility

 

Maturity

 

availability(1)

  

outstanding

  

Interest rate(2)

U.S. A/R Program

 

July 2024

 $150  $— 

(3)

Applicable rate plus 0.90%

EU A/R Program

 

July 2024

 €100  €—  

Applicable rate plus 1.30%

    

(or approximately $109)

      

 

(1)

The amount of actual availability under our A/R Programs may be lower based on the level of eligible receivables sold, changes in the credit ratings of our customers, customer concentration levels and certain characteristics of the accounts receivable being transferred, as defined in the applicable agreements.

​

(2)

The applicable rate for our U.S. A/R Program is defined by the lender as USD LIBOR. The applicable rate for our EU A/R Program is either USD LIBOR, EURIBOR or SONIA (Sterling Overnight Interbank Average Rate). In anticipation of the transition away from USD LIBOR, the amendments we made in July 2021 to our A/R Programs incorporated replacement rates for the USD LIBOR.

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(3)

As of March 31, 2023, we had approximately $8 million (U.S. dollar equivalents) of letters of credit issued and outstanding under our U.S. A/R Program.

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As of March 31, 2023 and December 31, 2022, $306 million and $272 million, respectively, of accounts receivable were pledged as collateral under our A/R Programs.

 

Senior Notes

 

Our senior notes consisted of the following (monetary amounts in millions): 

 

          

Unamortized

 
          

premiums,

 
          

discounts

 
          

and debt

 

Notes

 

Maturity

 

Interest rate

  

Amount outstanding

 

issuance costs

 

2025 Senior Notes

 

April 2025

  4.25% 

€300 (€299 carrying value $(325))

 $1 

2029 Senior Notes

 

February 2029

  4.50% 

$750 ($740 carrying value)

  10 

2031 Senior Notes

 

June 2031

  2.95% 

$400 ($397 carrying value)

  3 

 

Variable Interest Entity Debt

 

 As of  March 31, 2023, AAC, our consolidated 50%-owned joint venture, had $33 million outstanding under its loan commitments and debt financing arrangements. As of March 31, 2023, we have $9 million classified as current debt and $24 million as long-term debt on our condensed consolidated balance sheets. We do not guarantee these loan commitments, and AAC is not a guarantor of any of our other debt obligations.

 

Compliance with Covenants

​

We believe that we are in compliance with the covenants contained in the agreements governing our material debt instruments, including our 2022 Revolving Credit Facility, our A/R Programs and our senior notes.​