NOTE 9. BORROWINGS

The Company’s total borrowings consist of the following:


	Interest rate at June 30, 2018			Due date at June 30, 2018		As of June 30, 2018			As of June 30, 2017
						(in millions)
Foxtel Group
Credit facility 2013^(a)		3.86	%		Apr 7, 2019	$	222		$	—
Credit facility 2014—tranche 1^(a)		3.86	%		May 30, 2019		148			—
Credit facility 2014—tranche 2^(a)		3.96	%		Jan 31, 2020		148			—
Credit facility 2015^(a)		4.01	%		Jul 31, 2020		296			—
Credit facility 2016^(a)(b)		4.56	%		Sept 11, 2021		108			—
Working capital facility 2017^(a)(b)		4.16	%		Jul 3, 2020		59			—
US private placement 2009—tranche 3		6.20	%		Sept 24, 2019		75			—
US private placement 2012—USD portion—tranche 1^(c)		3.68	%		Jul 25, 2019		150			—
US private placement 2012—USD portion—tranche 2^(c)		4.27	%		Jul 25, 2022		196			—
US private placement 2012—USD portion—tranche 3^(c)		4.42	%		Jul 25 2024		146			—
US private placement 2012—AUD portion		7.04	%		Jul 25, 2022		83			—
REA Group
Credit facility 2016—tranche 1^(d)		—			Dec 31, 2017		—			92
Credit facility 2016—tranche 2^(d)		3.11	%		Dec 31, 2018		89			92
Credit facility 2016—tranche 3^(d)		3.21	%		Dec 31, 2019		178			184
Credit facility 2018^(d)		3.01	%		April 27, 2021		54			—
Other Obligations					Feb 2, 2018		—			11

Total borrowings							1,952			379
Less: current portion^(e)							(462	)		(103	)

Long-term borrowings						$	1,490		$	276

^(a)	Borrowings under these facilities bear interest at a floating rate of Australian BBSY plus an applicable margin of between 1.10% and 2.70% per annum payable quarterly.

^(b)	As of June 30, 2018, the Foxtel Group has undrawn commitments of $198 million under these facilities for which it pays a commitment fee in the range of 40% and 45% of the applicable margin.

^(c)	The carrying value of the borrowings include any fair value adjustments related to the Company’s fair value hedges. See Note 11—Financial Instruments and Fair Value Measurements.

^(d)	Borrowings under this facility bear interest at a floating rate of the Australian BBSY plus a margin in the range of 0.85% and 1.45% depending on REA Group’s net leverage ratio. As of June 30, 2018, REA Group was paying a margin of between 0.95% and 1.05%.

^(e)	The Company classifies the current portion of long term debt as non-current liabilities on the Balance Sheets when it has the intent and ability to refinance the obligation on a long-term basis, in accordance with ASC 470-50 “Debt.”

Foxtel Group Borrowings

Upon the completion of the Transaction, the Company consolidated $1.8 billion of outstanding debt incurred by certain subsidiaries of new Foxtel (together with new Foxtel, the “Foxtel Group”), including its U.S. private placement senior unsecured notes and drawn amounts under its revolving credit facilities, with maturities ranging from 2019 to 2024. In accordance with ASC 805, these debt instruments were recorded at fair value as of the acquisition date.

During the fourth quarter of fiscal 2018, the Foxtel Group had repayments of $119 million and borrowings of $42 million under its working capital facility.

U.S. Private Placement Senior Unsecured Notes

At June 30, 2018, $74 million (A$100 million) of the U.S. private placement senior unsecured notes is in a fair value hedge relationship, and $296 million (A$400) million is in a cash flow hedge relationship.

Covenants, Collateral and Unamortized borrowing costs

The Foxtel Group’s external borrowings (revolving credit facilities and U.S. private placement senior unsecured notes) require the Foxtel Group to comply with specified financial and non-financial covenants calculated in accordance with Australian International Financial Reporting Standards. Subject to certain exceptions, these covenants restrict or prohibit members of the Foxtel Group from, among other things, undertaking certain transactions, disposing of properties or assets (including subsidiary stock), merging or consolidating with any other person, making financial accommodation available, giving guarantees, entering into certain other financing arrangements, creating or permitting certain liens, engaging in transactions with affiliates, making repayments of other loans and undergoing fundamental business changes. The financial covenants require the Foxtel Group to maintain a total debt to Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”) ratio of not more than 3.75 to 1.0 and an interest coverage ratio of no less than 3.50 to 1.0. Foxtel Group’s external borrowings are only guaranteed by certain members of the Foxtel Group. The Foxtel Group is in compliance with these covenants as of June 30, 2018. There were no assets pledged as collateral for any of the borrowings.

REA Group Facilities

During the second quarter of fiscal 2018, REA Group repaid approximately $93 million (A$120 million) for the first tranche of its A$480 million unsecured revolving loan facility, which matured in December 2017.

During the fourth quarter of fiscal 2018, REA Group entered into an A$70 million unsecured revolving loan facility agreement and drew down the full amount available of $53 million to fund the acquisition of Hometrack Australia.

The facilities require REA Group to maintain a net leverage ratio of not more than 3.25 to 1.0 and an interest coverage ratio of not less than 3.0 to 1.0. As of June 30, 2018, REA Group was in compliance with all of the applicable debt covenants.

Revolving Credit Facility

The Company’s Credit Agreement (as amended, the “Credit Agreement”) provides for an unsecured $650 million revolving credit facility (the “Facility”) that can be used for general corporate purposes. The Facility has a sublimit of $100 million available for issuances of letters of credit. Under the Credit Agreement, the Company may request increases in the amount of the Facility up to a maximum amount of $900 million. The lenders’ commitments under the Credit Agreement terminate on October 23, 2020 provided the Company may request that the commitments be extended under certain circumstances as set forth in the Credit Agreement for up to two additional one-year periods.

The Credit Agreement contains customary affirmative and negative covenants and events of default, with customary exceptions, including limitations on the ability of the Company and its subsidiaries to engage in transactions with affiliates, incur liens, merge into or consolidate with any other entity, incur subsidiary debt or dispose of all or substantially all of its assets or all or substantially all of the stock of its subsidiaries. In addition, the Credit Agreement requires the Company to maintain an adjusted operating income leverage ratio of not more than 3.0 to 1.0 and an interest coverage ratio of not less than 3.0 to 1.0. As of June 30, 2018, the Company was in compliance with all of the applicable debt covenants.

Interest on borrowings under the Facility is based on either (a) a Eurodollar Rate formula or (b) the Base Rate formula, each as set forth in the Credit Agreement. The applicable margin and the commitment fee are based on the pricing grid in the Credit Agreement, which varies based on the Company’s adjusted operating income leverage ratio. As of June 30, 2018, the Company was paying a commitment fee of 0.225% on any undrawn balance and an applicable margin of 0.50% for a Base Rate borrowing and 1.50% for a Eurodollar Rate borrowing.

As of the date of this filing, the Company has not borrowed any funds under the Facility.

Future maturities

The following table summarizes the Company’s debt maturities as of June 30, 2018:


	As of June 30, 2018
	(in millions)
Fiscal 2019	$	462
Fiscal 2020		551
Fiscal 2021		406
Fiscal 2022		108
Fiscal 2023		279
Thereafter		146