Long-Term Debt and Credit Facility

9 Months Ended

Sep. 30, 2012

The following table presents details of our long-term debt liabilities:



	September 30,			December 31,
	2012			2011
	(In millions)
1.500% fixed-rate notes, due 2013	$	300		$	300
2.375% fixed-rate notes, due 2015	400			400
2.700% fixed-rate notes, due 2018	500			500
2.500% fixed-rate notes, due 2022	500			—
	$	1,700		$	1,200
Unaccreted discount	(7		)	(4		)
	$	1,693		$	1,196

In August 2012 we issued senior unsecured notes in an aggregate principal amount of $500 million which mature in August 2022 and bear interest at a fixed rate of 2.500% per annum, or the 2022 Notes. Interest is payable in cash semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2013. The 2022 Notes were issued at an effective yield of 2.585% and an original issue discount at 99.255%.

In connection with the 2022 Notes, we entered into a registration rights agreement pursuant to which we agreed to use our reasonable commercial efforts to file with the SEC an exchange offer registration statement to issue registered notes with substantially identical terms as the 2022 Notes in exchange for any outstanding 2022 Notes, or, under certain circumstances, a shelf registration statement to register the 2022 Notes. We agreed to use our commercially reasonable efforts to consummate the exchange offer or cause the shelf registration statement to be declared effective by the SEC, in each case on or prior to 365 days after the closing of the 2022 Notes offering. If we are unable to complete our registration statement, we will be subject to interest penalties.

We may redeem the 2022 Notes at any time, subject to a specified make-whole premium as defined in the indenture governing the 2022 Notes. In the event of a change of control triggering event, each holder of 2022 Notes will have the right to require us to purchase for cash all or a portion of their 2022 Notes at a redemption price of 101% of the aggregate principal amount of such 2022 Notes plus accrued and unpaid interest. Default can be triggered by any missed interest or principal payment, breach of covenant, or in certain events of bankruptcy, insolvency or reorganization.

The Notes contain a number of restrictive covenants, including, but not limited to, restrictions on our ability to grant liens on assets; enter into sale and lease-back transactions; or merge, consolidate or sell assets. Failure to comply with these covenants, or any other event of default, could result in acceleration of the principal amount and accrued but unpaid interest on the Notes.

These 2022 Notes are recorded as long-term debt, net of original issue discount. The discount and debt issuance costs associated with the issuance of the 2022 Notes are amortized to interest expense over the term. The effective rates for the fixed-rate debt include the interest on the notes and the accretion of the original issue discount.

Relative to our overall indebtedness, the notes rank in right of payment (i) equal with all of our other existing and future senior unsecured indebtedness (ii) senior to all of our existing and future subordinated indebtedness, and (iii) effectively subordinated to all of our subsidiaries' existing and future indebtedness and other obligations (including secured and unsecured obligations) and subordinated to our existing and future secured indebtedness and other obligations, to the extent of the assets securing such indebtedness and other obligations.

We also have a credit facility with certain institutional lenders that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $500 million with a maturity date of November 19, 2016, at which time all outstanding revolving facility loans (if any) and accrued and unpaid interest must be repaid. No amounts were outstanding on our credit facility at September 30, 2012 and December 31, 2011.

The long-term debt and credit facility contain customary representations, warranties and covenants.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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