
	Financing Arrangements

In connection with the Merger, on October 26, 2007, the Company entered into financing arrangements consisting of (a) a senior secured credit facility (the "Senior Secured Credit Agreement"), (b) a senior unsecured credit facility, which later became senior unsecured notes, and (c) a senior secured asset-based revolving credit facility (the "Domestic ABL"). The Senior Secured Credit Agreement consists of senior secured term loans and a senior secured multi-currency revolver. The financing arrangements were subsequently amended through a series of refinancing transactions and in connection with the acquisition of NES discussed in Note 1, "Background, Merger and Basis of Presentation". During fiscal 2015, the Company entered into several refinancing transactions which extended the maturity dates of certain existing debt and provided for a new senior secured foreign asset-based revolving credit facility.

On May 29, 2015, Avaya Inc. entered into Amendment No. 9 to the Senior Secured Credit Agreement pursuant to which the Company refinanced a portion of the senior secured term B-3 loans ("term B-3 loans"), senior secured term B-4 loans ("term B-4 loans") and senior secured term B-6 loans ("term B-6 loans") in exchange for and with the proceeds from the issuance of $2,125 million in principal amount of senior secured term B-7 loans ("term B-7 loans") maturing May 29, 2020.

On June 4, 2015, Avaya Inc. entered into Amendment No. 4 to the Domestic ABL which, among other things: (i) extended the stated maturity of the facility from October 26, 2016 to June 4, 2020 (subject to certain conditions specified in the Domestic ABL), (ii) increased the sublimit for letter of credit issuances under the Domestic ABL from $150 million to $200 million, and (iii) amended certain covenants and other provisions of the existing agreement. At the same time, Avaya Inc. and certain foreign subsidiaries of the Company (the "Foreign Borrowers") entered into a new senior secured foreign asset-based revolving credit facility (the "Foreign ABL") which matures June 4, 2020 (subject to certain conditions specified in the Foreign ABL). Available credit under the Domestic ABL remains $335 million subject to availability under the borrowing base. Available credit under the Foreign ABL is $150 million subject to availability under the respective borrowing bases of the Foreign Borrowers.

At December 31, 2015 and September 30, 2015, the Company had aggregate outstanding borrowings of $70 million and $55 million, in addition to $114 million and $119 million of issued and outstanding letters of credit with aggregate remaining revolver availability of $108 million and $83 million, respectively, under the Domestic ABL.

At December 31, 2015 and September 30, 2015, the Company had aggregate outstanding borrowings of $20 million and $20 million, in addition to $22 million and $22 million of issued and outstanding letters of credit with aggregate remaining revolver availability of $88 million and $101 million, respectively, under the Foreign ABL.

On June 5, 2015, the Company permanently reduced the senior secured multi-currency revolver from $200 million to $18 million and all letters of credit under the Senior Secured Credit Agreement were transferred to the Domestic ABL. At December 31, 2015 and September 30, 2015, the Company had aggregate outstanding borrowings of $18 million and $18 million, respectively, under the senior secured multi-currency revolver.

The weighted average contractual interest rate of the Company’s outstanding debt as of December 31, 2015 and September 30, 2015 was 7.3% and 7.3%, respectively. The effective interest rate of each obligation is not materially different than its contractual interest rate.

Principal amounts of long term debt and long term debt net of discounts and issuance costs consisted of the following:



	December 31, 2015					September 30, 2015
In millions	Principal Amount		Net of Discounts and Issuance Costs			Principal Amount		Net of Discounts and Issuance Costs
Variable rate revolving loans under the Senior Secured Credit Agreement due October 26, 2016	$	18	$	18		$	18	$	18
Variable rate revolving loans under the Domestic ABL due June 4, 2020	70		70			55		55
Variable rate revolving loans under the Foreign ABL due June 4, 2020	20		20			20		20
Variable rate term B-3 loans due October 26, 2017	616		612			616		611
Variable rate term B-4 loans due October 26, 2017	1		1			1		1
Variable rate term B-6 loans due March 31, 2018	537		533			537		532
Variable rate term B-7 loans due May 29, 2020	2,106		2,073			2,112		2,077
7% senior secured notes due April 1, 2019	1,009		1,000			1,009		999
9% senior secured notes due April 1, 2019	290		286			290		286
10.50% senior secured notes due March 1, 2021	1,384		1,368			1,384		1,368
Total debt	$	6,051	5,981			$	6,042	5,967
Debt maturing within one year			(25		)			(7		)
Non-current portion of long-term debt			$	5,956				$	5,960

Annual maturities of the principal amounts of our long-term debt for the next five years ending September 30 and thereafter consist of:



In millions
Remainder of fiscal 2016	$	19
2017	43
2018	1,179
2019	1,324
2020	2,102
2021 and thereafter	1,384
Total	$	6,051

Capital Lease Obligations

Included in other liabilities is $61 million and $61 million of capital lease obligations, net of imputed interest as of December 31, 2015 and September 30, 2015, respectively, which includes assets under a sale-leaseback arrangement and an office facility.

On August 20, 2014, the Company entered into an agreement to outsource certain delivery services associated with the Avaya Private Cloud Services business. That agreement also included the sale of specified assets owned by the Company which are being leased-back by Avaya and accounted for as a capital lease. Under the terms of the agreement, additional financing is also available to Avaya and its subsidiaries of up to $24 million per year for the sale of equipment used in the performance of services under the agreement, provided that no material adverse change with respect to the Company has occurred or is continuing as of the date any such financing is requested. During the three months ended December 31, 2014, the Company received proceeds of $12 million in connection with the sale of equipment used in the performance of services under this agreement. As of December 31, 2015 and September 30, 2015, capital lease obligations associated with this agreement were $46 million and $48 million, respectively.