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This excerpt taken from the DELL 10-K filed Mar 18, 2010. Long-Term
Debt
During Fiscal 2010, Dell issued the 2012 Notes, 2014 Notes, and
the 2019 Notes (collectively, the “Notes”). The net
proceeds from the Notes, after payment of expenses, were
approximately $1.5 billion. The estimated fair value of all
the notes included in long-term debt was approximately
$3.2 billion at January 29, 2010, compared to a
carrying value of $3.0 billion at that date.
Table of Contents
DELL
INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During Fiscal 2010, Dell entered into several interest rate swap
agreements to effectively convert $200 million of the
Notes’ fixed rate to a floating rate. The floating rates
are based on six-month LIBOR plus a fixed rate. The interest
rate swaps qualified for hedge accounting treatment as fair
value hedges.
The principal amount of the Senior Debentures was
$300 million at January 29, 2010. The estimated fair
value of the Senior Debentures was approximately
$333 million at January 29, 2010, compared to a
carrying value of $394 million at that date. The carrying
value includes an unamortized amount related to the termination
of interest rate swap agreements in the fourth quarter of Fiscal
2009, which were previously designated as hedges of the debt.
Dell India Pvt Ltd., Dell’s wholly-owned subsidiary,
borrowed $24 million under a two-year term note agreement
during Fiscal 2010 for working capital needs. The term note
contains customary events of default, including failure to make
required payments, failure to comply with certain agreements or
covenants, misrepresentation, change of ownership, and certain
events of bankruptcy and insolvency.
The indentures governing the Notes and the Senior Debentures
contain customary events of default, including failure to make
required payments, failure to comply with certain agreements or
covenants, and certain events of bankruptcy and insolvency. The
Indentures also contain covenants limiting Dell’s ability
to create certain liens; enter into
sale-and-lease
back transactions; and consolidate or merge with, or convey,
transfer or lease all or substantially all of its assets to
another person.
As of January 29, 2010, there were no events of default
with respect to the Notes, the Senior Debentures, or the India
term note.
Aggregate future maturities of long-term debt at face value
(excluding a $97 million unamortized carrying value
adjustment related to the termination of interest rate swap
agreements, a $5 million discount on debt issuance, and a
$1 million hedge accounting adjustment) were as follows at
January 29, 2010:
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