Huntsman Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Debt

Note 8 - Debt

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

8. DEBT

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

	*March 31,*		*December 31,*
	*2021*		*2020*
Senior Credit Facilities:
Revolving facility	$	—	$	—
Amounts outstanding under A/R programs		—		—
Senior notes		1,489		2,047
Variable interest entities		55		50
Other		23		24
Total debt	$	1,567	$	2,121
Total current portion of debt	$	57	$	593
Long-term portion of debt		1,510		1,528
Total debt	$	1,567	$	2,121

Direct and Subsidiary Debt

Huntsman Corporation’s direct debt and guarantee obligations consist of a guarantee of certain indebtedness incurred from time to time to finance certain insurance premiums. Substantially all of our other 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.

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.

Debt Issuance Costs

We record debt issuance costs related to a debt liability on the balance sheet as a reduction to the face amount of that debt liability. For March 31, 2021 and December 31, 2020, the amount of debt issuance costs directly reducing the debt liability was $8 million and $9 million, respectively. We record the amortization of debt issuance costs as interest expense.

Revolving Credit Facility

As of March 31, 2021, our $1.2 billion senior unsecured revolving credit facility (“Revolving Credit Facility”) was as follows (dollars in millions):

Unamortized

Discounts and

Committed

Principal

Debt Issuance

Carrying

Facility

Amount

Outstanding

Costs

Value

Interest Rate(2)

Maturity

Revolving Credit Facility

1,200

—

(1)

—

(1)

—

(1)

USD LIBOR plus 1.50%

2023

(1)	On March 31, 2021, we had an additional $6 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Credit Facility.

(2)	Interest rates on borrowings under the Revolving Credit Facility vary based on the type of loan and Huntsman International’s debt ratings. The then applicable interest rate as of March 31, 2021 was 1.50% above LIBOR.

A/R Programs

Our U.S. accounts receivable securitization program (“U.S. A/R Program”) 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.

Information regarding our A/R Programs as of March 31, 2021 was as follows (monetary amounts in millions):

Maximum Funding

Amount

Facility

Maturity

Availability⁽¹⁾

Outstanding

Interest Rate⁽²⁾

U.S. A/R Program

April 2022

150

—

(3)

Applicable rate plus 0.90%

EU A/R Program

April 2022

€

100

€

—

Applicable rate plus 1.30%

(or approximately $118)

(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 GBP LIBOR, USD LIBOR or EURIBOR.

(3)	As of March 31, 2021, we had approximately $5 million (U.S. dollar equivalents) of letters of credit issued and outstanding under our U.S. A/R Program.

As of March 31, 2021 and December 31, 2020, $245 million and $198 million, respectively, of accounts receivable were pledged as collateral under our A/R Programs.

Senior Notes

On January 15, 2021, we redeemed in full €445 million (approximately $541 million) in aggregate principal amount of our 2021 Senior Notes at the redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest to, but not including, the redemption date. In connection with this redemption, we incurred an incremental cash tax liability of approximately $15 million in the first quarter of 2021 related to foreign currency exchange gains.

Note Payable from Huntsman International to Huntsman Corporation

During the first quarter of 2020, our intercompany loan of $380 million to our subsidiary Huntsman International was repaid to us in full.

Compliance with Covenants

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