Borrowings

12 Months Ended

Jun. 30, 2011

Borrowings

Borrowings

NOTE 12. BORROWINGS

Revolving Credit and Loan Facilities: On March 29, 2007, the Company entered into a $1,190.0 million senior unsecured credit facility, consisting of a $440.0 million, five-year term loan facility, a $500.0 million, five-year revolving credit facility and a $250.0 million, one-year revolving credit facility. Borrowings under the five-year term loan facility bear interest at LIBOR plus 40 to 90 basis points based on debt ratings at the time of the borrowing. The five-year term loan facility was subject to interest at LIBOR plus 40 basis points as of June 30, 2011 and 2010, respectively. Borrowings under the five-year revolving credit facility bear interest at LIBOR plus 27 to 75 basis points based on debt ratings and the utilization percentage of the facility at the time of the borrowing. The five-year revolving credit facility also has an annual facility fee equal to 8 to 20 basis points on the $500.0 million facility, based on the Company's debt rating, whether used or unused. The annual facility fee for the five-year revolving credit facility was equal to 8 basis points as of June 30, 2011 and 2010, respectively. The Company incurred $1.5 million in debt issuance costs to establish these credit facilities. These costs have been capitalized in Other non-current assets in the Consolidated Balance Sheets and are amortized to interest expense on a straight-line basis, which approximates the effective interest method, over the terms of these facilities.

On March 29, 2007, the Company borrowed $440.0 million under the five-year term loan facility and $250.0 million under the one-year revolving credit facility. The proceeds received in connection with the $690.0 million of borrowings were transferred to ADP on March 30, 2007 as a tax-free dividend as part of the spin-off from our former parent company (the "Distribution"). In May 2007, the Company refinanced the $250.0 million one-year revolving credit facility through an offering of $250.0 million of 6.125% senior notes discussed below. The one-year revolving credit facility was cancelled upon repayment. During the fiscal years ended June 30, 2011, 2010 and 2009, the Company did not make any repayments on the five-year term loan facility.

The Company repaid $240.0 million of the $440.0 million borrowing under the five-year term loan as follows: $70.0 million during the fiscal year ended June 30, 2007 and $170.0 million during the fiscal year ended June 30, 2008. Per terms of the loan agreement, as a portion of the outstanding borrowing was paid down, the total borrowing capacity was reduced commensurately, leaving a borrowing capacity of $200.0 million at June 30, 2011. The weighted-average interest rate on the five-year term loan facility was 0.77% and 0.85% for the fiscal years ended June 30, 2011 and 2010, respectively.

During the fiscal year ended June 30, 2011, the Company borrowed $240.0 million and subsequently repaid $40.0 million under the five-year revolving credit facility. The weighted-average interest rate on the five-year revolving credit facility was 0.57% for the fiscal year ended June 30, 2011.

These credit facilities are subject to covenants, including financial covenants consisting of a leverage ratio and an interest coverage ratio. At June 30, 2011 and 2010, the Company is not aware of any instances of any non-compliance with the financial covenants of these credit facilities.

Senior Notes : In May 2007, the Company completed an offering of $250.0 million in aggregate principal amount of senior notes (the "Senior Notes"). The Senior Notes will mature on June 1, 2017 and bear interest at a rate of 6.125% per annum. Interest on the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year. The Senior Notes were issued at a price of 99.1% (effective yield to maturity of 6.251%). The indenture governing the Senior Notes contains certain covenants including covenants restricting the Company's ability to create or incur liens securing indebtedness for borrowed money and to enter into certain sale-leaseback transactions. At June 30, 2011 and 2010, we are not aware of any instances of non-compliance with the financial covenants of the indenture governing the Senior Notes. The indenture also contains covenants regarding the purchase of the notes upon a change of control triggering event. The Senior Notes are senior unsecured obligations of the Company and rank equally with our other senior indebtedness. The Company may redeem the Senior Notes in whole or in part at any time before their maturity. The Company incurred $1.9 million in debt issuance costs to establish the Senior Notes. These costs have been capitalized and will be amortized to interest expense on a straight-line basis, which approximates the effective interest method, over the ten-year term. During the fiscal year ended June 30, 2009, the Company purchased $125.0 million principal amount of the Senior Notes (including $1.0 million unamortized bond discount) pursuant to a cash tender offer for such notes. The consideration paid for the Senior Notes accepted for payment was $116.3 million. The completed purchase resulted in a one-time non-cash gain from early extinguishment of debt of $8.4 million.

In addition, certain of the Company's foreign subsidiaries established unsecured, uncommitted lines of credit with banks. These lines of credit bear interest at LIBOR plus 250 basis points. As of June 30, 2011 and 2010, respectively, no amounts were outstanding under these lines of credit.

Available Capacity : As of June 30, 2011, outstanding borrowings and available capacity under the Company's borrowing arrangements were as follows:

	Expiration Date		Total Capacity		Outstanding Borrowings		Unused Available Capacity
			($ in millions)
Short-term borrowings
Term loan facility		March 2012	$	200.0	$	200.0	$	—
Revolving credit facility		March 2012		500.0		200.0		300.0
Total Short-term borrowings				700.0		400.0		300.0
Long-term debt
Senior notes		June 2017		124.3		124.3		—
Total debt			$	824.3	$	524.3	$	300.0

The carrying value of the variable-rate term loan facility approximates fair value. The fair value of the fixed-rate Senior Notes at June 30, 2011 was $130.8 million based on quoted market prices. Amounts are due on the expiration dates listed above.