10. LONG-TERM DEBT

Unsecured Senior Notes

In October 2017, the company issued $8.25 billion of unsecured senior notes to finance the Orbital ATK Acquisition and to pay related fees and expenses as follows:


•	$1.0 billion of 2.08 percent Senior Notes due 2020 (the “2020 Notes”),


•	$1.5 billion of 2.55 percent Senior Notes due 2022 (the “2022 Notes”),


•	$1.5 billion of 2.93 percent Senior Notes due 2025 (the “2025 Notes”),


•	$2.0 billion of 3.25 percent Senior Notes due 2028 (the “2028 Notes”) and


•	$2.25 billion of 4.03 percent Senior Notes due 2047 (the “2047 Notes”).

We refer to the 2020 Notes, 2022 Notes, 2025 Notes, 2028 Notes and 2047 Notes, together, as the “notes.” Interest on the notes is payable semi-annually in arrears. The notes are generally subject to an optional redemption, in whole or in part, at the company's discretion at any time, or from time to time, prior to maturity at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed or an applicable “make-whole” amount, plus accrued and unpaid interest.

In addition, the 2020 Notes, 2022 Notes, 2025 Notes and 2047 Notes are subject to a mandatory redemption. If the Orbital ATK Acquisition is not consummated on or prior to December 17, 2018, or if the merger agreement relating to the Orbital ATK Acquisition is terminated prior to such date, then, in either case, the company will be required to redeem all of the outstanding 2020 Notes, 2022 Notes, 2025 Notes and 2047 Notes at a redemption price equal to 101% of the aggregate principal amount of such notes, plus accrued and unpaid interest.

The 2028 Notes are not subject to a special mandatory redemption. If the Orbital ATK Acquisition is not consummated, the company expects to use the net proceeds from the offering of the 2028 Notes for general corporate purposes, which may include debt repayment, share repurchases, pension plan funding, acquisitions and working capital.

In December 2016, the company issued $750 million of unsecured senior notes due February 1, 2027, with a fixed interest rate of 3.20 percent. We used the net proceeds from this offering for a debt repayment of $200 million in the fourth quarter of 2016 and for general corporate purposes.

Credit Facilities

In December 2016, a subsidiary of the company entered into a two-year credit facility, with two additional one-year option periods, in an aggregate principal amount of £120 million (the equivalent of approximately $161 million as of December 31, 2017) (the “2016 Credit Agreement”). The company exercised the first option to extend the maturity to December 2019. The 2016 Credit Agreement is guaranteed by the company. At December 31, 2017, there was £100 million (the equivalent of approximately $134 million as of December 31, 2017) outstanding under this facility, which bears interest at a rate of LIBOR plus 1.10 percent. All of the borrowings outstanding under this facility mature less than one year from the date of issuance, but may be renewed under the terms of the facility. Based on our intent and ability to refinance the obligations on a long-term basis, substantially all of the borrowings are classified as non-current.

The company also maintains a five-year unsecured credit facility in an aggregate principal amount of $1.6 billion that matures in July 2020. At December 31, 2017, there was no balance outstanding under this facility.

Our credit agreements contain generally customary terms and conditions, including covenants restricting the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake other fundamental changes and incur liens. The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreements) to exceed 65 percent. At December 31, 2017, the company was in compliance with all covenants under its credit agreements.

Long-term debt consists of the following:



$ in millions		December 31
$ in millions		2017			2016
Fixed-rate notes and debentures, maturing in	Interest rate
2018	1.75%	850			850
2019	5.05%	500			500
2020	2.08%	1,000			—
2021	3.50%	700			700
2022	2.55%	1,500			—
2023	3.25%	1,050			1,050
2025	2.93%	1,500			—
2026	7.75% - 7.88%	527			527
2027	3.20%	750			750
2028	3.25%	2,000			—
2031	7.75%	466			466
2040	5.05%	300			300
2043	4.75%	950			950
2045	3.85%	600			600
2047	4.03%	2,250			—
Credit facilities	1.62%	134			135
Other	Various	271			273
Debt issuance costs		(82		)	(31		)
Total long-term debt		15,266			7,070
Less: current portion⁽¹⁾		867			12
Long-term debt, net of current portion		$	14,399		$	7,058

⁽¹⁾The current portion of long-term debt is recorded in Other current liabilities in the consolidated statements of financial position.

The estimated fair value of long-term debt was $16.0 billion and $7.6 billion as of December 31, 2017 and 2016, respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements.

Indentures underlying long-term debt issued by the company or its subsidiaries contain various restrictions with respect to the issuer, including one or more restrictions relating to limitations on liens, sale-leaseback arrangements and funded debt of subsidiaries. The majority of these fixed rate notes and debentures are subject to redemption at the company’s discretion at any time prior to maturity in whole or in part at the principal amount plus any make-whole premium and accrued and unpaid interest. Interest on these fixed rate notes and debentures are payable semi-annually in arrears.

Total interest payments, net of interest received, were $273 million, $299 million, and $291 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Maturities of long-term debt as of December 31, 2017, are as follows:



$ in millions
Year Ending December 31
2018	$	867
2019	518
2020	1,045
2021	834
2022	1,505
Thereafter	10,581
Total principal payments	15,350
Unamortized premium on long-term debt, net of discount	(2		)
Debt issuance costs	(82		)
Total long-term debt	$	15,266