Hess 1999 Annual Report Download - page 38

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36
As part of the formation of the joint venture, PDVSA, V.I.
purchased a 50% interest in the fixed assets of the Corpora-
tion’s Virgin Islands refinery for $62,500,000 in cash and a
10-year note from PDVSA V.I. for $562,500,000 bearing interest
at 8.46% per annum and requiring principal payments over its
term. At December 31, 1999, the principal balance of the note
was $538,500,000. In addition, there was a $125,000,000,
10-year, contingent note, also bearing interest at 8.46% per
annum. The contingent note was not valued for accounting
purposes. PDVSA V.I.’s payment obligations under both notes
are guaranteed by PDVSA and secured by a pledge of PDVSA
V.I.’s interest in the joint venture.
In February 2000, HOVENSA reached agreement on a
$600,000,000 bank financing for the construction of a 58,000
barrel per day delayed coking unit and related facilities at its
refinery and for general working capital requirements. In
connection with the financing, the Corporation and PDVSA
V.I. agreed to amend the note received by the Corporation at
the formation of the joint venture. PDVSA V.I. will defer prin-
cipal payments on the note until after completion of coker
construction but not later than February 14, 2003. Principal
payments are due ratably until maturity on February 14, 2011.
The interest rate on the note has been increased to 9.46%.
PDVSA V.I. has the option to reduce the interest rate to the
original rate of 8.46% by repaying principal in accordance
with the original amortization schedule.
6. Short-Term Notes and Related Lines of Credit
Short-term notes payable to banks amounted to $17,912,000
at December 31, 1999 and $3,500,000 at December 31, 1998.
The weighted average interest rates on these borrowings were
6.3% and 8.8% at December 31, 1999 and 1998, respectively.
At December 31, 1999, the Corporation has uncommitted
arrangements with banks for unused lines of credit aggregat-
ing $376,000,000.
7. Long-Term Debt
Long-term debt at December 31 consists of the following:
Thousands of dollars 1999 1998
73⁄8% and 77⁄8% Debentures,
due in 2009 and 2029 $ 990,026 $
—
6.1% Marine Terminal Revenue
Bonds—Series 1994—
City of Valdez, Alaska,
due 2024 20,000 20,000
Pollution Control Revenue Bonds,
weighted average rate 6.6%,
due through 2022 52,623 52,607
Fixed rate notes, payable principally
to insurance companies,
weighted average rate 8.0%*,
due through 2014 915,000 1,154,285
Global Revolving Credit Facility
with banks, weighted average
rate 6.5%, due 2002 120,000 1,195,000
Project lease financing, weighted
average rate 5.1%, due
through 2014 182,588 185,513
Capitalized lease obligations,
weighted average rate 5.3%, due
through 2009 8,332 35,960
Other loans, weighted average rate
8.0%, due through 2007 3,200 5,600
2,291,769 2,648,965
Less amount included in
current maturities 5,109 172,820
Total $2,286,660 $2,476,145
*Includes effect of interest rate conversion agreements.
The aggregate long-term debt maturing during the next
five years is as follows (in thousands): 2000—$5,109
(included in current liabilities); 2001—$25,411; 2002—
$320,695; 2003—$80,990 and 2004—$159,794.