The following is a summary of debt outstanding, net of unamortized issuance costs and discounts, as of September 30, 2019 and December 31, 2018, respectively:
September 30, 2019
December 31, 2018
Term Loan A Facility (net of $3 and $4 unamortized issuance costs)
Senior Notes at 5.00% (net of $10 and $12 unamortized issuance costs and $3 and $3 discount, respectively)
Finance lease liabilities and other
Less: current portion
On September 7, 2017, Delphi Technologies and its wholly-owned subsidiary Delphi Powertrain Corporation entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), with respect to $1.25 billion in senior secured credit facilities. The Credit Agreement consists of a senior secured five-year $750 million term loan facility due 2022 (the “Term Loan A Facility”) and a $500 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders party thereto and JPMorgan Chase Bank, N.A. We incurred $9 million of issuance costs in connection with the Credit Agreement. As of September 30, 2019, there were no amounts drawn on the Revolving Credit Facility.
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, with respect to our and our subsidiaries’ equity interests. In addition, the Credit Agreement requires that we maintain a consolidated net leverage ratio (the ratio of Consolidated Total Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement) of not greater than 3.5 to 1.0. The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events. The Company was in compliance with the Credit Agreement covenants as of September 30, 2019.
On September 28, 2017, Delphi Technologies PLC issued $800 million in aggregate principal amount of 5.00% senior unsecured notes due 2025 in a transaction exempt from registration under the Securities Act (the “Senior Notes”).
The Senior Notes indenture contains certain restrictive covenants, including with respect to Delphi Technologies’ (and subsidiaries) ability to incur liens, enter into sale and leaseback transactions and merge with or into other entities. The Company was in compliance with the Senior Notes covenants as of September 30, 2019.
Receivable factoring—The Company entered into arrangements with various financial institutions to sell eligible trade receivables from certain Aftermarket customers in North America and Europe. These arrangements can be terminated at any time subject to prior written notice. The receivables under these arrangements are sold to a third party without recourse to the Company and are therefore accounted for as true sales. During the three and nine months ended September 30, 2019, $38 million and $112 million of receivables were sold under these arrangements, and expenses of $1 million and $3 million were recognized within interest expense, respectively. During the three and nine months ended September 30, 2018, $30 million and $75 million of receivables were sold under these arrangements, and expenses of $1 million and $3 million were recognized within interest expense, respectively.
In addition, during the nine months ended September 30, 2019 and September 30, 2018, one of the Company’s European subsidiaries factored, without recourse, $21 million and $22 million of receivables related to certain foreign research credits to a financial institution, respectively. These transactions were accounted for as true sales of the receivables, and the Company therefore derecognized these amounts from other long-term assets in the consolidated balance sheet as a result of these transactions. During the three and nine months ended September 30, 2019 and September 30, 2018, less than $1 million of expenses were recognized within interest expense related to these transactions.
Finance leases—There were approximately $14 million and $14 million of finance lease obligations outstanding as of September 30, 2019 and December 31, 2018, respectively.
Interest—Cash paid for interest related to debt outstanding, including the effect of interest rate and cross currency swaps, totaled $42 million and $46 million, for the nine months ended September 30, 2019 and 2018, respectively.