Note 7—Guarantees, Contingencies and Commitments
Transocean Inc. and certain indirect subsidiaries’ debt obligations—Transocean Inc., Transocean Guardian Limited, Transocean Phoenix 2 Limited, Transocean Pontus Limited, Transocean Poseidon Limited, Transocean Proteus Limited and Transocean Sentry Limited have each issued certain debt securities or entered into other credit arrangements, including notes, bank credit agreements, debentures, surety bonds and letters of credit. We agreed to guarantee certain of these debt securities or other credit arrangements in exchange for a guarantee fee from our subsidiaries. With certain exceptions under the indentures of the debt securities issued by our subsidiaries, we are not subject to significant restrictions on our ability to obtain funds from our consolidated subsidiaries by dividends, loans or return of capital distributions. At December 31, 2021 and 2020, the aggregate carrying amount of debt that we have guaranteed was USD 6.89 billion and USD 7.43 billion, respectively, equivalent to approximately CHF 6.28 billion and CHF 6.58 billion, respectively. In the years ended December 31, 2021 and 2020, we recognized guarantee fee income of CHF 1 million.
Surety bond performance obligations—On August 18, 2020, we provided a guarantee in favor of our subsidiaries issuing or reinsuring or procuring the issue or reinsurance of surety bonds in Brazil. At December 31, 2021, our guarantee was in support of $53 million of outstanding surety bonds.
Swiss group value added tax obligations—We are one of a group of Swiss entities that are jointly and severally liable for the entire Swiss value added tax amount due to the Swiss tax authorities by this group.
Note 8—Related Party Transactions
Credit agreements—On June 1, 2011, we and Transocean Inc., as the borrower and lender, respectively, entered into a credit agreement establishing a USD 2.00 billion revolving credit facility. Under the terms of the agreement, as amended, interest is incurred on outstanding borrowings at a variable rate based on the Swiss Safe Harbor Rate and payable at maturity. At December 31, 2021 and 2020, we had borrowings of USD 4 million and USD 92 million, respectively, equivalent to approximately CHF 4 million and CHF 81 million, respectively, outstanding under the revolving credit facility at a rate of 1.25 percent.
On November 30, 2018, we and Transocean Inc., as the borrower and lender, respectively, entered into a credit agreement establishing a USD 1.20 billion revolving credit facility, which is scheduled to expire on December 5, 2024. Under the terms of the agreement, as amended, interest is incurred on outstanding borrowings at a variable rate based on the Swiss Safe Harbor Rate and payable at maturity. At December 31, 2021 and 2020, we had borrowings of USD 1.13 billion and USD 1.20 billion, equivalent to CHF 1.03 billion and CHF 1.06 billion, respectively, outstanding under the credit facility at an interest rate of 1.25 percent.
Exchangeable notes—On February 26, 2021, we issued to Transocean Inc. USD 294 million aggregate principal amount of an exchangeable loan note (the “4.0% note”) with interest payable semiannually at a rate of 4.0 percent per annum in a non-cash exchange for USD 323 million aggregate principal amount of the 0.5 percent loan note. The 4.0% note may be converted at any time prior to the maturity date at an exchange rate of 190.4762 shares per USD 1,000 note, which implies a conversion price of USD 5.25 per share, subject to adjustment upon the occurrence of certain events. Transocean Inc. may require us to repurchase all or a portion of the 4.0% note upon the occurrence of certain events. At December 31 2021, the outstanding principal amount of the 4.0% note was USD 294 million, equivalent to approximately CHF 268 million.
On August 14, 2020, we issued to Transocean Inc. USD 238 million aggregate principal amount of an exchangeable loan note (the “2.5% note”) with interest payable semiannually at a rate of 2.5 percent per annum in a non-cash exchange for USD 397 million aggregate principal amount of the 0.5 percent loan note. The 2.5% note may be exchanged at any time prior to the maturity date at an exchange rate of 162.1626 shares per USD 1,000 note, which implies a conversion price of USD 6.17 per share, subject to adjustment upon the occurrence of certain events. Transocean Inc. may require us to repurchase all or a portion of the 2.5% note upon the occurrence of certain events. At December 31, 2021 and 2020, the outstanding principal amount of the 2.5% note was USD 238 million, equivalent to approximately CHF 217 million and CHF 210 million, respectively.
In the year ended December 31, 2018, we issued to Transocean Inc. USD 863 million aggregate principal amount of an exchangeable loan note, as amended (the “0.5% note”), with interest payable at maturity at a rate of 0.50 percent per annum. The 0.5% note may be exchanged at any time prior to the maturity date at an exchange rate of 97.29756 shares per USD 1,000 note, which implies a conversion price of USD 10.28 per share, subject to adjustment upon the occurrence of certain events. Transocean Inc. may require us to repurchase all or a portion of the 0.5% note upon the occurrence of certain events. In the year ended December 31, 2021 and 2020, Transocean Inc. made a distribution of USD 29 million and USD 162 million, respectively, equivalent to approximately CHF 27 million and CHF 148 million, respectively, in satisfaction of amounts due under the 0.5% note. At December 31, 2021 and 2020, the outstanding principal amount of the 0.5% note was USD 140 million and USD 463 million, respectively, equivalent to approximately CHF 128 million and CHF 409 million, respectively.
General and administrative services—Our subsidiaries perform on our behalf certain general and administrative services, including executive administration, procurement and payables, treasury and cash management, personnel and payroll, accounting and other administrative functions. In the years ended December 31, 2021 and 2020, we recognized such costs of less than CHF 1 million, recorded in general and administrative costs and expenses.
