Debt | 9 Months Ended |
Sep. 30, 2014 |
Debt Disclosure [Abstract] | ' |
Debt | ' |
Debt |
Total debt, including the current portion of long-term debt, consisted of the following: |
|
| | | | | | | |
(millions) | September 30, | | December 31, |
2014 | 2013 |
5.875% senior notes due 2021 | $ | 350 | | | $ | 350 | |
|
6.3% senior notes due 2016 | 500 | | | 500 | |
|
7.75% senior notes due 2018, net of discount | 500 | | | 500 | |
|
7.875% senior notes due 2020, net of discount | 249 | | | 249 | |
|
8.375% senior notes due 2018 | 350 | | | 350 | |
|
9.75% senior notes due 2014, net of discount | — | | | 59 | |
|
10% convertible senior notes due 2018, net of discount | — | | | 72 | |
|
Ship mortgage facility (includes $4 million of current portion of long-term debt) | 22 | | | 25 | |
|
Credit facilities of Oman joint ventures | — | | | 11 | |
|
Industrial revenue bonds (due 2028 through 2034) | 239 | | | 239 | |
|
Total | $ | 2,210 | | | $ | 2,355 | |
|
|
On August 1, 2014, we repaid the remaining of $59 million of principal balance of our 9.75% senior notes due 2014. |
In March 2014, we issued a notice of redemption to redeem the remaining $75 million in aggregate principal amount of outstanding 10% convertible senior notes due 2018. As of March 31, 2014, the notes were recorded on our accompanying consolidated balance sheet at $72 million, net of debt discount of $3 million. The notes could either be (1) redeemed at a stated redemption price or (2) converted into shares of our common stock. The holders of all $75 million in notes called for redemption elected to convert their notes into shares of USG’s common stock. Accordingly, in April 2014, we issued an additional 6,578,946 shares of our common stock in connection with the conversion of the notes. |
Our U.S. credit facility contains a single financial covenant that would require us to maintain a minimum fixed charge coverage ratio of no less than 1.1-to-1.0 if and for so long as the excess of the borrowing base over the outstanding borrowings under the credit agreement is less than the greater of (a) $40 million and (b) 15% of the lesser of (i) the aggregate revolving commitments at such time and (ii) the borrowing base at such time. As of September 30, 2014, our fixed charge coverage ratio was 1.14-to-1.0. Because we currently satisfy the required fixed charge coverage ratio, we are not required to maintain a minimum borrowing availability under the credit facility. Taking into account the most recent borrowing base calculation delivered under the credit facility, which reflects trade receivables and inventory as of September 30, 2014, and outstanding letters of credit of $54 million as of September 30, 2014, borrowings available under the credit facility were approximately $311 million. As of September 30, 2014 and during the quarter then-ended, there were no borrowings under the facility. |
On April 17, 2014, we entered into Amendment No. 1 (the “Amendment”) to our U.S. credit facility. The Amendment, among other things, (i) deleted the provisions providing for an early maturity date in the event we either (1) have not repaid or provided for the repayment of our outstanding 9.75% senior notes due 2014 (the “2014 Notes”) by May 2, 2014 or (2) did not have at least $500 million in liquidity from May 2, 2014 until the repayment of the 2014 Notes, and (ii) revised the definition of borrowing base to add an additional reserve against the borrowing base in the amount of the unpaid principal balance of the 2014 Notes outstanding from time to time. |
During the nine months ended September 30, 2014, there was an immaterial amount of borrowings outstanding under our Canadian credit agreement and no borrowings outstanding as of September 30, 2014. The U.S. dollar equivalent of borrowings available under this agreement as of September 30, 2014 was $35 million. On October 22, 2014, in connection with the amendment and restatement of our credit facility described below, we terminated our Canadian credit facility. |
In June 2013, our joint ventures in Oman, which were fully consolidated at that time, each entered into separate secured credit agreements, which were guaranteed by us and our joint venture partner. As of December 31, 2013, there was $11 million in outstanding term loan borrowings under the credit agreements. During the first two months of 2014, an additional $3 million of term loans were borrowed under these agreements. In connection with our investment in UBBP on February 27, 2014, we contributed our joint ventures in Oman, and the corresponding credit facilities, to UBBP. See further description of our investment in UBBP in Note 2. |
The fair value of our debt was approximately $2.362 billion as of September 30, 2014 and $2.659 billion as of December 31, 2013. The fair values were based on quoted prices for identical or similar liabilities in markets that are not active or valuation models in which all significant inputs and value drivers are observable and, as a result, are classified as Level 2 inputs. See Note 10 for further discussion on fair value measurements and classifications. |
As of September 30, 2014, we were in compliance with the covenants contained in our credit facilities. |
AMENDED AND RESTATED CREDIT FACILITY |
On October 22, 2014, we amended and restated our credit facility in order to, among other things, join CGC, Inc., or CGC, as a party and to increase the maximum borrowing limit under the credit agreement from $400 million to $450 million (including a $50 million borrowing sublimit for CGC). As amended and restated, the credit agreement allows for the borrowing of revolving loans and issuance of letters of credit (up to a maximum of $200 million at any time outstanding, in aggregate) to USG and its subsidiaries. Pursuant to the credit agreement, the maximum principal amount of revolving loans and letters of credit that may be borrowed by and/or be issued in favor USG and CGC at any time may fluctuate based upon two separate borrowing base calculations. |
USG's obligations under the credit facility are guaranteed by USG and its significant domestic subsidiaries and secured by their and USG’s trade receivables and inventory. CGC's obligation's under the credit facility are secured by trade receivables and inventory of certain subsidiaries. The credit facility matures on October 22, 2019 unless terminated earlier in accordance with its terms. The credit facility is available to fund working capital needs and for other general corporate purposes.. |
The credit agreement contains a financial covenant that would require us to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 if availability (as defined in the credit agreement) is less than an amount equal to 10% of the lesser of (a) the aggregate revolving commitment at such time and (b) the aggregate borrowing base at such time. We would be required to continue to comply with such financial covenant until availability under the credit agreement exceeds such minimum threshold for 30 consecutive calendar days thereafter. |