TYC » Topics » 8. Debt

This excerpt taken from the TYC 10-Q filed Feb 3, 2009.

8.    Debt

        Debt was as follows ($ in millions):

 
  December 26,
2008
  September 26,
2008
 

Commercial paper

  $ 165   $ 116  

6.125% public notes due 2008(2)

        300  

6.125% public notes due 2009(1)(2)

    215     215  

6.75% public notes due 2011

    516     516  

6.375% public notes due 2011

    849     849  

Revolving senior credit facility due 2011

    400      

Revolving senior credit facility due 2012

    286     286  

6.0% notes due 2013

    655     655  

7.0% public notes due 2019

    435     435  

6.875% public notes due 2021

    717     717  

7.0% public notes due 2028

    16     16  

6.875% public notes due 2029

    23     23  

Other(1)(2)

    90     136  
           

Total debt

    4,367     4,264  

Less current portion

    235     555  
           

Long-term debt

  $ 4,132   $ 3,709  
           

(1)
This instrument, plus $20 million of the amount shown as other, comprise the current portion of long-term debt as of December 26, 2008.

(2)
These instruments, plus $40 million of the amount shown as other, comprise the current portion of long-term debt as of September 26, 2008.

        At December 26, 2008 and September 26, 2008, the Company classified $165 million and $116 million, respectively, of short-term commercial paper as long-term. Settlement of this debt is not expected to require the use of working capital in the next year, as the Company has both the intent and the ability to refinance this debt on a long-term basis.

        In May 2008, Tyco International Finance S.A. ("TIFSA") commenced issuing commercial paper to U.S. institutional accredited investors and qualified institutional buyers. Borrowings under the commercial paper program are available for general corporate purposes. As of December 26, 2008, TIFSA had $165 million of commercial paper outstanding bearing interest at an average rate of 2.63%.

        On June 24, 2008, Tyco and TIFSA entered into a $500 million senior unsecured revolving credit agreement with Citibank, N.A, as administrative agent for the lenders party thereto. This credit agreement has a three-year term. Borrowings under this agreement have a variable interest rate based on LIBOR or an alternate base rate. The margin over LIBOR can vary based on changes in the Company's credit rating and facility utilization. Together with the existing $1.25 billion five-year senior revolving credit agreement, dated as of April 25, 2007, the Company's total commitments under these facilities increased to $1.75 billion. These revolving credit facilities will be used for working capital, capital expenditures and other corporate purposes. As of December 26, 2008, there was $686 million drawn under these unsecured revolving credit facilities.

        On September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman") filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York. Lehman was one of the lenders in our $1.25 billion revolving credit facility maturing on

19



TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

8.    Debt (Continued)


April 25, 2012, with a commitment of $60 million. Our $500 million credit facility maturing on June 24, 2011 did not have a commitment from Lehman.

        On December 26, 2008, Lehman relinquished all of its rights and obligations as a lender under the $1.25 billion credit facility. At that time, Lehman assigned all of its commitment under the facility to TIFSA. As a result, the aggregate available commitment under the facility was reduced by the assigned amount. As of December 26, 2008, the aggregate available commitment under the Company's senior revolving credit facilities was $1.69 billion.

This excerpt taken from the TYC 10-Q filed May 6, 2008.

7.    Debt

        Debt was as follows ($ in millions):

 
  March 28, 2008
  September 28, 2007
364-day senior bridge loan facility due 2008(2)   $   $ 367
6.125% public notes due 2008(1)     300     300
6.125% public notes due 2009(1)     215     215
6.75% public notes due 2011     516     516
6.375% public notes due 2011     849     849
Revolving senior credit facility due 2012     725     308
6.0% notes due 2013     655     654
3.125% convertible senior debentures due 2023     19     21
7.0% public notes due 2028     437     437
6.875% public notes due 2029     723     723
Other(1)(2)     63     72
   
 
Total debt     4,502     4,462
Less current portion     525     380
   
 
Long-term debt   $ 3,977   $ 4,082
   
 

(1)
These instruments, plus $10 million of the amount shown as other, comprise the current portion of long-term debt as of March 28, 2008.

(2)
This instrument, plus $13 million of the amount shown as other, comprise the current portion of long-term debt as of September 28, 2007.

16


TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Debt (Continued)

        On April 25, 2007, Tyco, certain of its subsidiaries and a syndicate of banks entered into a 364-day unsecured bridge loan facility. This facility has a variable interest rate based on LIBOR. The margin over LIBOR payable by Tyco International Finance S.A. ("TIFSA"), a wholly-owned subsidiary of the Company and successor company to Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), can vary based on changes in its credit rating. On October 1, 2007, the commitments with respect to the unused portion of the Company's unsecured bridge loan facility expired, but were subsequently renewed as described below. As of March 28, 2008, no amounts were outstanding under the bridge loan facility.

        The Company's unsecured revolving credit facility and its letter of credit facility described below provide the lenders under those facilities with the right to demand repayment of outstanding amounts, and to terminate commitments to extend additional credit, if (i) certain of the Company's outstanding public debt is declared due and payable and (ii) the Company does not have sufficient liquidity available under its unsecured bridge loan facility to refinance such debt. As a result, on November 27, 2007, the Company secured additional firm commitments from certain of its lenders under the bridge loan facility. These additional commitments provide the Company with sufficient liquidity to repay the outstanding public debt with borrowings of up to $4.0 billion. The additional commitments expire on, and any borrowings under the facility would mature on, November 25, 2008. The facility may only be used to repay, settle or otherwise extinguish the public debt described above, which is the subject of ongoing litigation between the Company and the trustee for such public debt. In April 2008, the Company reached a preliminary agreement to settle this litigation. For more information, see "Indenture Trustee Litigation" in Note 9.

        In addition to signing the bridge loan facility, on April 25, 2007, Tyco, certain of its subsidiaries and a syndicate of banks entered into a 5-year $1.25 billion unsecured revolving credit facility. This revolving credit facility will be used for working capital, capital expenditures and other corporate purposes. At March 28, 2008, $725 million was outstanding under the unsecured revolving credit facility, with $367 million of the proceeds drawn on the revolver used to repay the bridge loan facility. This facility has a variable interest rate based on LIBOR. The margin over LIBOR payable by TIFSA can vary based on changes in its credit rating.

        On June 21, 2007, Tyco and TIFSA entered into a $500 million letter of credit facility, with Citibank N.A. as administrative agent, that was originally scheduled to expire on December 15, 2007. The facility provides for the issuance of letters of credit supported by a related line of credit facility. TIFSA may only borrow under the line of credit agreement to reimburse the bank for obligations with respect to letters of credit issued under this facility. The covenants under this facility are similar to the covenants under the bridge loan and revolving credit facilities. TIFSA would pay interest on any outstanding borrowings at a variable interest rate, based on the bank's base rate or the Eurodollar rate, as defined. On October 19, 2007, the facility was amended to extend the maturity date to June 15, 2008 and adjust the interest rate spreads and fees applicable to extensions of credit thereunder. Loans under the amended letter of credit agreement will continue to bear interest based on LIBOR plus the applicable margin. As of March 28, 2008, letters of credit of $477 million have been issued under the $500 million credit facility. There were no amounts borrowed under this credit facility at March 28, 2008.

17


TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

This excerpt taken from the TYC 10-Q filed Feb 5, 2008.

7.    Debt

        Debt was as follows ($ in millions):

 
  December 28,
2007

  September 28,
2007

364-day senior bridge loan facility due 2008(1)(2)   $ 367   $ 367
6.125% public notes due 2008(1)     300     300
6.125% public notes due 2009     215     215
6.75% public notes due 2011     516     516
6.375% public notes due 2011     849     849
Revolving senior credit facility due 2012     308     308
6.0% notes due 2013     654     654
3.125% convertible senior debentures due 2023     21     21
7.0% public notes due 2028     437     437
6.875% public notes due 2029     723     723
Other(1)(2)     80     66
   
 
Total debt     4,470     4,456
Less current portion     693     380
   
 
Long-term debt   $ 3,777   $ 4,076
   
 

(1)
These instruments, plus $26 million of the amount shown as other, comprise the current portion of long-term debt as of December 28, 2007.

(2)
This instrument, plus $13 million of the amount shown as other, comprise the current portion of long-term debt as of September 28, 2007.

14


TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Debt (Continued)

        On April 25, 2007, Tyco, certain of its subsidiaries and a syndicate of banks entered into a 364-day unsecured bridge loan facility. This facility has a variable interest rate based on LIBOR. The margin over LIBOR payable by Tyco International Finance S.A. ("TIFSA"), a wholly owned subsidiary of the Company and successor company to Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), can vary based on changes in its credit rating. As of December 28, 2007, Tyco's aggregate commitment and outstanding balance under its unsecured bridge loan facility was $367 million.

        On October 1, 2007, the commitments with respect to the unused portion of the Company's unsecured bridge loan facility expired. The Company's unsecured revolving credit facility and its letter of credit facility described below provide the lenders under those facilities with the right to demand repayment of outstanding amounts, and to terminate commitments to extend additional credit, if (i) certain of the Company's outstanding public debt is declared due and payable and (ii) the Company does not have sufficient liquidity available under its unsecured bridge loan facility to refinance such debt. As a result, on November 27, 2007, the Company secured additional firm commitments from certain of its lenders under the bridge loan facility. These additional commitments provide the Company with sufficient liquidity to repay the outstanding public debt with borrowings of up to $4.0 billion. The additional commitments expire on, and any borrowings under the facility would mature on, November 25, 2008. The facility may only be used to repay, settle or otherwise extinguish the public debt described above, which is the subject of ongoing litigation between the Company and the trustee for such public debt. For more information regarding such litigation, see "Indenture Trustee Litigation" in Note 9.

        Additionally, on April 25, 2007, Tyco, certain of its subsidiaries and a syndicate of banks entered into a 5-year $1.25 billion unsecured revolving credit facility. This revolving credit facility will be used for working capital, capital expenditures and other corporate purposes. At December 28, 2007, $308 million was outstanding under the unsecured revolving credit facility. This facility has a variable interest rate based on LIBOR. The margin over LIBOR payable by TIFSA can vary based on changes in its credit rating.

        On June 21, 2007, Tyco and TIFSA entered into a $500 million letter of credit facility, with Citibank N.A. as administrative agent, that was originally set to expire on December 15, 2007. The facility provides for the issuance of letters of credit, supported by a related line of credit facility. TIFSA may only borrow under the line of credit agreement to reimburse the bank for obligations with respect to letters of credit issued under this facility. The covenants under this facility are substantially similar to the covenants under the bridge loan and revolving credit facilities. TIFSA would pay interest on any outstanding borrowings at a variable interest rate, based on the bank's base rate or the Eurodollar rate, as defined. On October 19, 2007, the facility was amended. The amendment extended the maturity date to June 15, 2008 and adjusted the interest rate spreads and fees applicable to extensions of credit thereunder. Loans under the amended letter of credit agreement will continue to bear interest based on LIBOR plus the applicable margin. As of December 28, 2007, letters of credit of $477 million have been issued under the $500 million credit facility. There were no amounts borrowed under this credit facility at December 28, 2007.

This excerpt taken from the TYC 10-Q filed Aug 9, 2007.

8.    Debt

        Debt was as follows ($ in millions):

 
  June 29,
2007

  September 29,
2006

6.125% Euro denominated public notes due 2007(2)   $   $ 762
Revolving bank credit facility due 2007         700
364-day senior bridge loan facility due 2008(1)     367    
6.125% public notes due 2008     300     399
5.5% Euro denominated notes due 2008         869
6.125% public notes due 2009     215     399
6.75% public notes due 2011     516     999
6.375% public notes due 2011     849     1,500
6.5% British Pound denominated public notes due 2011         373
Revolving senior credit facility due 2012     308    
6.0% notes due 2013     654     997
3.125% convertible senior debentures due 2023     24     750
7.0% public notes due 2028     437     497
6.875% public notes due 2029     723     790
6.5% British Pound denominated public notes due 2031         536
Other(1)(2)     92     79
   
 
Total debt     4,485     9,650
Less current portion     384     773
   
 
Long-term debt   $ 4,101   $ 8,877
   
 

(1)
These instruments, plus $17 million of the amount shown as other, comprise the current portion of long-term debt as of June 29, 2007.

(2)
These instruments, plus $11 million of the amount shown as other, comprise the current portion of long-term debt as of September 29, 2006.

Debt Tenders

        On April 27, 2007, Tyco announced that, in connection with the Separation, Tyco and certain of its subsidiaries that are issuers of its corporate debt had commenced tender offers to purchase for cash substantially all of its outstanding U.S. dollar denominated public debt, aggregating approximately $6.6 billion. Of this amount, approximately $5.9 billion was non-convertible U.S. debt and $750 million was convertible U.S. debt, with maturities from 2007 to 2029. In conjunction with the tender offers, the relevant issuer solicited consents for certain clarifying amendments to the indentures pursuant to which the debt was issued. Tyco received acceptance notices for approximately $2.1 billion, or 36% of its outstanding non-convertible U.S. debt and approximately $726 million or 97% of its outstanding convertible U.S. debt. Debt which was not tendered in an amount of approximately $3.8 billion remains with Tyco.

20



        Additionally, Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), commenced on April 30, 2007 tender offers to purchase for cash all of its outstanding Euro and Pound Sterling denominated public debt, aggregating the equivalent of approximately $1.9 billion, with maturities from 2008 to 2031, issued under its Euro Medium Term Note Programme (the "EMTN Notes") and a consent solicitation for certain clarifying amendments to the fiscal agency agreement pursuant to which the EMTN Notes were issued. Tyco received acceptance notices for approximately $1.5 billion, or 80% of its EMTN Notes. The remaining EMTN Notes were repurchased pursuant to an optional redemption.

        In connection with the debt tender offers, Tyco incurred a pre-tax charge for the early extinguishment of debt of approximately $647 million, for which no tax benefit is available. This charge consists primarily of premium paid and the write-off of unamortized debt issuance costs and discounts, of which $388 million is included in discontinued operations.

        TIGSA's remaining debt was contributed to Tyco International Finance S.A. ("TIFSA"), a wholly owned subsidiary of the company and successor company to TIGSA.

Bank and Credit Facilities

        On April 25, 2007, Tyco, certain of its subsidiaries and a syndicate of banks entered into three 364-day unsecured bridge loan facilities with an aggregate commitment amount of $10 billion. At the end of May 2007, the aggregate commitment amount under these facilities was increased to $12.5 billion. Tyco borrowed approximately $8.9 billion under the unsecured bridge loan facilities to fund its debt tender offers, repay its existing bank credit facilities and to finance the class action settlement. Of this amount, approximately $4.3 billion and $3.6 billion was assigned to Covidien and Tyco Electronics, respectively. Tyco initially guaranteed the new unsecured bridge loan facilities and Covidien and Tyco Electronics each assumed Tyco's obligations with respect to their unsecured bridge loan facilities upon the Separation. Tyco's aggregate commitment under its unsecured bridge loan facility is $4.7 billion. On June 29, 2007, $367 million remained outstanding under its unsecured bridge loan facility. This facility has a variable interest rate based on LIBOR. The margin over LIBOR payable by TIFSA can vary based on changes in its credit rating.

        Additionally, on April 25, 2007, Tyco, certain of its subsidiaries and a syndicate of banks entered into three unsecured revolving credit facilities with an initial aggregate commitment amount of $2.5 billion that increased to $4.25 billion at the time of the Separation. Of the aggregate commitment amount of $4.25 billion, a $1.25 billion commitment is available to Tyco, and a $1.5 billion commitment is available to each of Covidien and Tyco Electronics. The revolving credit facilities will be used for working capital, capital expenditures and other corporate purposes. Tyco initially guaranteed the new revolving credit facilities and Covidien and Tyco Electronics each assumed Tyco's obligations with respect to their revolving credit facilities upon the Separation. At June 29, 2007, Tyco has borrowed $308 million under its unsecured revolving credit facility. This facility has a variable interest rate based on LIBOR. The margin over LIBOR payable by TIFSA can vary based on changes in its credit rating.

        The unsecured revolving credit facilities replaced TIGSA's existing $1.0 billion 5-year revolving credit facility, $1.5 billion 3-year revolving bank credit facility and $500 million 3-year unsecured letter of credit facility, which were all terminated by June 1, 2007 prior to their scheduled expiration dates of December 16, 2009, December 21, 2007 and June 15, 2007, respectively. On the date of termination, no amounts were borrowed under the $1.0 billion facility and the $1.5 billion facility, and letters of credit of $494 million were issued under the $500 million facility. On June 21, 2007, Tyco, TIFSA and a

21



syndicate of banks entered into a new $500 million letter of credit facility expiring on December 15, 2007. At June 29, 2007, there were $494 million of letters of credit issued and outstanding.

This excerpt taken from the TYC 10-Q filed May 8, 2007.

9.    Debt

        Debt was as follows ($ in millions):

 
  March 30,
2007

  September 29,
2006

6.125% Euro denominated public notes due 2007(1)(2)   $ 801   $ 762
Revolving bank credit facility due 2007(1)     700     700
Bank overdraft(1)     195    
6.5% notes due 2007(1)     100     100
6.125% public notes due 2008     399     399
7.2% notes due 2008     86     86
5.5% Euro denominated notes due 2008     911     869
6.125% public notes due 2009     399     399
6.75% public notes due 2011     999     999
6.375% public notes due 2011     1,500     1,500
6.5% British Pound denominated public notes due 2011     392     373
6.0% notes due 2013     997     997
7.0% debentures due 2013     87     86
3.125% convertible senior debentures due 2023     750     750
7.0% public notes due 2028     497     497
6.875% public notes due 2029     791     790
6.5% British Pound denominated public notes due 2031     557     536
Other(1)(2)     301     297
   
 
Total debt     10,462     10,140
Less current portion     1,853     800
   
 
Long-term debt   $ 8,609   $ 9,340
   
 

(1)
These instruments, plus $57 million of the amount shown as other, comprise the current portion of long-term debt as of March 30, 2007.

(2)
These instruments, plus $38 million of the amount shown as other, comprise the current portion of long-term debt as of September 29, 2006.

        Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), holds a $1.0 billion 5-year revolving credit facility expiring on December 16, 2009 and a $1.5 billion 3-year revolving bank credit facility expiring on December 21, 2007. Additionally, TIGSA holds a $500 million 3-year unsecured letter of credit facility expiring on June 15, 2007. At March 30, 2007, letters of credit of $494 million have been issued under the $500 million facility and $6 million remains available for issuance. At March 30, 2007, $700 million has been borrowed under the $1.5 billion 3-year revolving bank credit facility. There were no amounts borrowed under the other credit facility at March 30, 2007.

18



This excerpt taken from the TYC 10-Q filed Apr 20, 2007.

9.    Debt

        Debt was as follows ($ in millions):

 
  December 29,
2006

  September 29,
2006

6.125% Euro denominated public notes due 2007(1)(2)   $ 787   $ 762
Revolving bank credit facility due 2007(1)     700     700
6.5% notes due 2007(1)     100     100
6.125% public notes due 2008     399     399
7.2% notes due 2008     86     86
5.5% Euro denominated notes due 2008     898     869
6.125% public notes due 2009     399     399
6.75% public notes due 2011     999     999
6.375% public notes due 2011     1,500     1,500
6.5% British Pound denominated public notes due 2011     391     373
6.0% notes due 2013     997     997
7.0% debentures due 2013     87     86
3.125% convertible senior debentures due 2023     750     750
7.0% public notes due 2028     497     497
6.875% public notes due 2029     790     790
6.5% British Pound denominated public notes due 2031     555     536
Other(1)(2)     294     297
   
 
Total debt     10,229     10,140
Less current portion     1,627     800
   
 
Long-term debt   $ 8,602   $ 9,340
   
 

(1)
These instruments, plus $40 million of the amount shown as other, comprise the current portion of long-term debt as of December 29, 2006.

(2)
These instruments, plus $38 million of the amount shown as other, comprise the current portion of long-term debt as of September 29, 2006.

        Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), holds a $1.0 billion 5-year revolving credit facility expiring on December 16, 2009 and a $1.5 billion 3-year revolving bank credit facility expiring on December 21, 2007. Additionally, TIGSA holds a $500 million 3-year unsecured letter of credit facility expiring on June 15, 2007. At December 29, 2006, letters of credit of $494 million have been issued under the $500 million facility and $6 million remains available for issuance. At December 29, 2006, $700 million has been borrowed under the $1.5 billion 3-year revolving bank credit facility. There were no amounts borrowed under the other credit facilities at December 29, 2006.

This excerpt taken from the TYC 10-Q filed Feb 6, 2007.

9.    Debt

        Debt was as follows ($ in millions):

 
  December 29,
2006

  September 29,
2006

6.125% Euro denominated public notes due 2007(1)(2)   $ 787   $ 762
Revolving bank credit facility due 2007(1)     700     700
6.5% notes due 2007(1)     100     100
6.125% public notes due 2008     399     399
7.2% notes due 2008     86     86
5.5% Euro denominated notes due 2008     898     869
6.125% public notes due 2009     399     399
6.75% public notes due 2011     999     999
6.375% public notes due 2011     1,500     1,500
6.5% British Pound denominated public notes due 2011     391     373
6.0% notes due 2013     997     997
7.0% debentures due 2013     87     86
3.125% convertible senior debentures due 2023     750     750
7.0% public notes due 2028     497     497
6.875% public notes due 2029     790     790
6.5% British Pound denominated public notes due 2031     555     536
Other(1)(2)     294     297
   
 
Total debt     10,229     10,140
Less current portion     1,627     800
   
 
Long-term debt   $ 8,602   $ 9,340
   
 

(1)
These instruments, plus $40 million of the amount shown as other, comprise the current portion of long-term debt as of December 29, 2006.

(2)
These instruments, plus $38 million of the amount shown as other, comprise the current portion of long-term debt as of September 29, 2006.

        Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), holds a $1.0 billion 5-year revolving credit facility expiring on December 16, 2009 and a $1.5 billion 3-year revolving bank credit facility expiring on December 21, 2007. Additionally, TIGSA holds a $500 million 3-year unsecured letter of credit facility expiring on June 15, 2007. At December 29, 2006, letters of credit of $494 million have been issued under the $500 million facility and $6 million remains available for issuance. At December 29, 2006, $700 million has been borrowed under the $1.5 billion 3-year revolving bank credit facility. There were no amounts borrowed under the other credit facilities at December 29, 2006.

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