DEBT

The following table summarizes the Company's outstanding debt as of the dates indicated:



	October 28, 2016		January 29, 2016
	(in millions)
Secured Debt
Structured financing debt	$	3,426	$	3,411
3.75% Floating rate due October 2018 ("Term Loan C Facility")	—		1,003
4.00% Floating rate due April 2020 ("Term Loan B Facility")	—		4,329
4.00% Floating rate due April 2020 ("Term Loan Euro Facility")	—		891
5.625% due October 2020 ("Senior First Lien Notes")	—		1,400
EMC merger transaction financing issued on September 7, 2016 ("Senior Secured Credit Facilities"):
4.00% Term Loan B Facility due September 2023	5,000		—
2.53% Term Loan A-1 Facility due December 2018	3,700		—
2.78% Term Loan A-2 Facility due September 2021	3,925		—
2.53% Term Loan A-3 Facility due December 2018	1,800		—
2.53% Revolving Credit Facility due September 2021	1,475		—
EMC merger transaction financing issued on June 1, 2016 ("First Lien Notes"):
3.48% due June 2019	3,750		—
4.42% due June 2021	4,500		—
5.45% due June 2023	3,750		—
6.02% due June 2026	4,500		—
8.10% due June 2036	1,500		—
8.35% due June 2046	2,000		—
Unsecured Notes and Debentures
Notes and debentures issued prior to going-private transaction:
3.10% due April 2016	—		400
5.65% due April 2018	500		500
5.875% due June 2019	600		600
4.625% due April 2021	400		400
7.10% due April 2028	300		300
6.50% due April 2038	388		388
5.40% due September 2040	265		265
EMC merger transaction financing issued on June 22, 2016 ("Senior Notes"):
5.875% due June 2021	1,625		—
7.125% due June 2024	1,625		—
Existing EMC notes assumed as part of the EMC merger transaction ("EMC Notes"):
1.875% due June 2018	2,500		—
2.650% due June 2020	2,000		—
3.375% due June 2023	1,000		—
Bridge Facilities
4.875% Asset Sale Bridge Facility due September 2017	2,200		—
2.28% Margin Bridge Facility due September 2017	2,500		—
2.28% VMware Note Bridge Facility due September 2017	1,500		—
Other	58		93
Total debt, principal amount	56,787		13,980



	October 28, 2016			January 29, 2016
	(in millions)
Total debt, principal amount	56,787			13,980
Unamortized discount, net of unamortized premium	(310		)	(221		)
Debt issuance costs	(805		)	(128		)
Total debt, carrying value	$	55,672		$	13,631
Total short-term debt	$	8,388		$	2,981
Total long-term debt	$	47,284		$	10,650

Upon the closing of the EMC merger transaction, the Company repaid and terminated the ABL Credit Facility and the Term Loan Facilities obtained in connection with the going-private transaction, and redeemed the Senior First Lien Notes issued in connection with the going-private transaction. During the nine months ended October 28, 2016, the Company repaid $0.5 billion of the Revolving Credit Facility obtained in connection with the EMC merger transaction and $0.4 billion of maturing Unsecured Notes and Debentures.

To finance the EMC merger transaction, the Company issued $45.9 billion in new debt, which included proceeds from the sale of the First Lien Notes and Senior Unsecured Notes in June 2016, as well as borrowings under the Senior Secured Credit Facilities (including the Revolving Credit Facility), the Asset Sale Bridge Facility, the Margin Bridge Facility, and the VMware Note Bridge Facility at the closing of the transaction. The Company incurred approximately $245 million of other expenses related to these debt extinguishments and new borrowings. Under the terms of the agreements relating to the issuance of the First Lien Notes and Senior Unsecured Notes, the proceeds of the offerings were deposited into escrow and included in restricted cash in the Condensed Consolidated Statements of Financial Position until the closing of the EMC merger transaction, at which time such proceeds were released to finance the transaction. Upon the closing of the EMC merger transaction, the Company received pre-funded interest in the amount of $58 million that the Company had previously paid into escrow and which will be paid to the holders of the First Lien Notes and Senior Unsecured Notes on the scheduled interest payment dates, as well as investment income earned of approximately $14 million on that pre-funded interest.

Senior Secured Credit Facilities — At the closing of the EMC merger transaction on September 7, 2016, the Company entered into a credit agreement (the "Senior Secured Credit Agreement") that provides for senior secured credit facilities (the “Senior Secured Credit Facilities”) in the aggregate principal amount of $17.575 billion comprising (a) term loan facilities and (b) a senior secured Revolving Credit Facility, which includes capacity for up to $0.5 billion of letters of credit and for borrowings of up to $0.4 billion under swing-line loans. Dell International L.L.C. ("Dell International") and EMC are the borrowers under the Senior Secured Credit Facilities. As of October 28, 2016, available borrowings under the Revolving Credit Facility totaled $1.6 billion. The Senior Secured Credit Facilities provide that the borrowers have the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving commitments in an aggregate principal amount of up to (a) the greater of (i) $10.0 billion and (ii) 100% of Consolidated EBITDA (as defined in the Senior Secured Credit Agreement) plus (b) an amount equal to voluntary prepayments of the term loan facilities and the revolving credit facility, subject to certain requirements, plus (c) an additional unlimited amount subject to a pro forma net first lien leverage ratio of 3.25:1.0.

Borrowings under the Senior Secured Credit Facilities bear interest at a rate per annum equal to an applicable margin, plus, at the borrowers’ option, either (a) a base rate, which, under the Term Loan B Facility, is subject to an interest rate floor of 1.75% per annum, and under all other borrowings is subject to an interest rate floor of 0% per annum, or (b) a London interbank offered rate ("LIBOR"), which, under the Term Loan B Facility, is subject to an interest rate floor of 0.75% per annum, and under all other borrowings is subject to an interest rate floor of 0% per annum. The applicable margin under the Term Loan B Facility is subject to reduction based on a first lien leverage ratio test. The applicable margins under the Term Loan A-1 Facility, the Term Loan A-2 Facility, the Term Loan A-3 Facility and the Revolving Credit Facility vary based upon a corporate ratings-based pricing schedule.

The Term Loan A-1 Facility will mature on December 31, 2018 and has no amortization. The Term Loan A-2 Facility will mature on September 7, 2021 and amortizes in equal quarterly installments in aggregate annual amounts equal to 5% of the original principal amount in each of the first two years after the date of the closing of the EMC merger transaction, 10% of the original principal amount in each of the third and fourth years after the date of the closing of the EMC merger transaction, and 70% of the original principal amount in the fifth year after the date of the closing of the EMC merger transaction. The Term Loan A-3 Facility will mature on December 31, 2018 and has no amortization. The Term Loan B Facility will mature on September 7, 2023 and amortizes in equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount. The Revolving Credit Facility will mature on September 7, 2021 and has no amortization. The Term Loan A-1 and A-3 Facilities require the borrowers to prepay outstanding borrowings under these facilities with 100% of the net cash proceeds of certain non-ordinary course asset sales or dispositions after fully prepaying the Asset Sale Bridge Facility. The borrowers may voluntarily repay outstanding loans under the Term Loan and Revolving Credit Facilities at any time without premium or penalty, other than customary “breakage” costs.

All obligations of the borrowers under the Senior Secured Credit Facilities and certain swap agreements, cash management arrangements, and certain letters of credit provided by any lender or agent party to the Senior Secured Credit Facilities or any of their affiliates and certain other persons are guaranteed by Denali Intermediate Inc. (“Denali Intermediate”), Dell, certain subsidiaries of Denali Intermediate, and each existing and subsequently acquired or organized direct or indirect material wholly-owned domestic restricted subsidiary of Dell, with customary exceptions. All such obligations under the Senior Secured Credit Facilities (and the guarantees thereof) and certain swap agreements, cash management arrangements, and certain letters of credit provided by any lender or agent party to the Senior Secured Credit Facilities or any of its affiliates and certain other persons are secured by (a) a first-priority security interest in certain tangible and intangible assets of the borrowers and the guarantors and (b) a first-priority pledge of 100% of the capital stock of the borrowers, Dell and each wholly-owned material restricted subsidiary of the borrowers and the guarantors, in each case subject to certain thresholds, exceptions and permitted liens.

First Lien Notes — The senior secured notes (collectively, the “First Lien Notes”) were issued on June 1, 2016 in an aggregate principal amount of $20.0 billion. As of the closing of the EMC merger transaction, Dell International and EMC are the co-issuers of the First Lien Notes. The First Lien Notes are guaranteed, subject to certain exceptions, on a joint and several basis by Dell Technologies, Denali Intermediate, Dell, and Denali Intermediate’s direct and indirect wholly-owned material domestic subsidiaries that guarantee the Senior Secured Credit Facilities. The First Lien Notes are secured, on a pari passu basis with the Senior Secured Credit Facilities, on a first-priority basis by substantially all of the tangible and intangible assets of the issuers and guarantors that secure obligations under the Senior Secured Credit Facilities, including pledges of all capital stock of the issuers, of Dell, and of certain wholly-owned material subsidiaries of the issuers and the guarantors, subject to certain exceptions.

Senior Notes — The senior unsecured notes (collectively, the "Senior Notes") were issued on June 22, 2016 in an aggregate principal amount of $3.25 billion. As of the closing of the EMC merger transaction, Dell International and EMC are the co-issuers of the Senior Notes. The Senior Notes are guaranteed, subject to certain exceptions, on a joint and several basis, by Dell Technologies, Denali Intermediate, Dell, and Denali Intermediate’s direct and indirect wholly-owned material domestic subsidiaries that guarantee the Senior Secured Credit Facilities.

Repayment and Termination of Credit Facilities — At the closing of the EMC merger transaction on September 7, 2016, the Company repaid approximately $6.1 billion of borrowings (including accrued and unpaid interest thereon) under the Company’s ABL Credit Facility and Term Loan Facilities obtained in connection with the going-private transaction and terminated such credit facilities and related credit agreements and documents.

The ABL Credit Facility provided for an asset-based senior secured revolving credit facility in an initial aggregate principal amount of approximately $2.0 billion, subject to a borrowing base consisting of certain receivables and inventory. The Term Loan Facilities originally provided for senior secured term loan facilities consisting of a $4.7 billion Term Loan B Facility, a $1.5 billion Term Loan C Facility and a €0.7 billion Term Loan Euro Facility.

Redemption of Senior First Lien Notes — In connection with the EMC merger transaction, the Company issued and delivered notices of conditional redemption to holders of the outstanding 5.625% Senior First Lien Notes due 2020 issued by them in October 2013 in connection with Dell’s going private transaction (the “Senior First Lien Notes”) to redeem (a) $0.15 billion in aggregate principal amount of the Senior First Lien Notes at a redemption price of 103% of the principal amount thereof and (b) $1.25 billion in aggregate principal amount of the Senior First Lien Notes at a redemption price equal to 100% of the principal amount thereof plus a “make-whole” premium calculated in accordance with the indenture governing the Senior First Lien Notes, in each case, plus accrued and unpaid interest thereon to but excluding the redemption date. Such redemption notices were conditioned upon, among other matters, the closing of the EMC merger transaction. On September 7, 2016, substantially concurrently with the consummation of the EMC merger transaction, the Company deposited with the trustee of the Senior First Lien Notes the applicable redemption payments to fund such redemptions and thereby redeemed all of the outstanding Senior First Lien Notes. The Senior First Lien Notes were issued in an aggregate original principal amount of $1.5 billion.

EMC Notes — As of September 7, 2016, EMC had outstanding approximately $2.5 billion aggregate principal amount of its 1.875% Notes due June 2018, approximately $2.0 billion aggregate principal amount of its 2.650% Notes due June 2020 and approximately $1.0 billion aggregate principal amount of its 3.375% Notes due June 2023 (collectively, the “EMC Notes”), all of which were issued pursuant to an Indenture dated as of June 6, 2013. The EMC Notes remain outstanding following the closing of the EMC merger transaction. The EMC Notes are senior unsecured obligations of EMC and are not guaranteed by any subsidiaries of EMC or by the Company or any other subsidiaries of the Company.

Structured Financing Debt — As of October 28, 2016 and January 29, 2016, the Company had $3.4 billion and $3.4 billion, respectively, in outstanding structured financing debt, which was primarily related to the fixed-term lease and loan securitization programs and the revolving loan securitization programs. See Note 7 and Note 9 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion of the structured financing debt and the interest rate swap agreements that hedge a portion of that debt.

Unsecured Notes and Debentures — The Company has Unsecured Notes and Debentures that were issued prior to the going-private transaction. Interest on these borrowings is payable semiannually. See "Senior Notes" above for a discussion of the Senior Unsecured Notes issued in connection with the EMC merger transaction.

Asset Sale Bridge Facility — On September 7, 2016, certain subsidiaries of the Company entered into a credit agreement providing for a senior unsecured asset sale bridge facility in an aggregate principal amount of $2.2 billion (the “Asset Sale Bridge Facility”). Dell International and EMC are the borrowers under the Asset Sale Bridge Facility, which is guaranteed by Denali Intermediate, certain subsidiaries of Denali Intermediate, Dell, and each existing and subsequently acquired or organized direct or indirect material wholly-owned domestic restricted subsidiary of Dell that guarantees the Senior Secured Credit Facilities.

Borrowings under the Asset Sale Bridge Facility bear interest (a) at a fixed rate of 4.875% per annum until the date that is the three-month anniversary of the closing date of the facility, (b) at a LIBOR-based rate plus a marginal rate of 7.50% per annum from the date that is the three-month anniversary of the closing date of the facility until the date that is the six-month anniversary of the closing date of the facility, and (c) thereafter, at a LIBOR-based rate, subject to increases of 50 basis points on the applicable margin rate every three months thereafter. Interest is payable, at the end of each interest period (but at least every three months), in arrears.

The Asset Sale Bridge Facility will mature on September 6, 2017 and has no amortization. The Asset Sale Bridge Facility requires the borrowers to prepay outstanding borrowings under the facility with 100% of the net cash proceeds of certain non-ordinary course asset sales or dispositions. The borrowers may voluntarily repay outstanding loans under the Asset Sale Bridge Facility at any time without premium or penalty, other than customary "breakage" costs.

See Note 22 of the Notes to the Unaudited Condensed Consolidated Financial Statements for information regarding the repayment and termination of the Asset Sale Bridge Facility that occurred subsequent to October 28, 2016.

Margin Bridge Facility — On September 7, 2016, Merger Sub and EMC entered into a credit agreement providing for a senior secured margin bridge facility in an aggregate principal amount of $2.5 billion (the “Margin Bridge Facility”). EMC is the borrower under the Margin Bridge Facility, which is secured solely by 77,033,442 shares of Class B common stock of VMware and any proceeds thereof.

Interest under the Margin Bridge Facility is payable, at the borrower's option, either at (a) a base rate plus 0.75% per annum or (b) a LIBOR-based rate plus 1.75% per annum. Interest is payable, in the case of loans bearing interest based on LIBOR, at the end of each interest period (but at least every three months), in arrears and, in the case of loans bearing interest based on the base rate, quarterly in arrears.

The Margin Bridge Facility will mature on September 6, 2017 and has no amortization. The Margin Bridge Facility requires the borrower to prepay outstanding borrowings under the Margin Bridge Facility with 100% of the net cash proceeds of any asset sale or other disposition of the pledged VMware shares. The borrower may voluntarily repay outstanding loans under the Margin Bridge Facility at any time without premium or penalty, other than customary “breakage” costs, subject to certain minimum threshold amounts for prepayment.

VMware Note Bridge Facility — On September 7, 2016, Merger Sub and EMC entered into a credit agreement providing for a senior secured note bridge facility in an aggregate principal amount of $1.5 billion (the “VMware Note Bridge Facility”). EMC is the borrower under the VMware Note Bridge Facility, which is secured solely by certain intercompany notes in an aggregate principal amount of $1.5 billion issued by VMware that are payable to EMC, and the proceeds thereof.

Interest under the VMware Note Bridge Facility is payable, at the borrower's option, either at (a) a base rate plus 0.75% per annum or (b) a LIBOR-based rate plus 1.75% per annum. Interest is payable, in the case of loans bearing interest based on LIBOR, at the end of each interest period (but at least every three months), in arrears and, in the case of loans bearing interest based on the base rate, quarterly in arrears.

The VMware Note Bridge Facility will mature on September 6, 2017 and has no amortization. The VMware Note Bridge Facility requires the borrower to prepay outstanding borrowings under the VMware Note Bridge Facility with 100% of the net cash proceeds of any asset sale or other disposition of the pledged VMware promissory notes. The borrower may voluntarily repay outstanding loans under the VMware Note Bridge Facility at any time without premium or penalty, other than customary “breakage” costs, subject to certain minimum threshold amounts for prepayment.

Aggregate Future Maturities — As of October 28, 2016, aggregate future maturities of the Company's debt were as follows:



	Maturities by Fiscal Year
	2017 (remaining three months)			2018			2019			2020			2021		Thereafter			Total
	(in millions)
Structured Financing Debt	$	581		$	1,754		$	911		$	150		$	27	$	3		$	3,426
Senior Secured Credit Facilities and First Lien Notes	62			246			5,795			4,193			332		25,272			35,900
Unsecured Notes and Debentures	—			—			500			600			—		1,353			2,453
Senior Notes and EMC Notes	—			—			2,500			—			2,000		4,250			8,750
Bridge Facilities	—			6,200			—			—			—		—			6,200
Other	17			13			2			—			—		26			58
Total maturities, principal amount	660			8,213			9,708			4,943			2,359		30,904			56,787
Associated carrying value adjustments	(1		)	(76		)	(113		)	(63		)	—		(862		)	(1,115		)
Total maturities, carrying value amount	$	659		$	8,137		$	9,595		$	4,880		$	2,359	$	30,042		$	55,672

Covenants and Unrestricted Net Assets — The credit agreements for the Senior Secured Credit Facilities and the Asset Sale Bridge Facility contain customary negative covenants that generally limit the ability of Denali Intermediate, Dell, and Dell’s and Denali Intermediate’s other restricted subsidiaries to incur debt, create liens, make fundamental changes, enter into asset sales, make certain investments, pay dividends or distribute or redeem certain equity interests, prepay or redeem certain debt, and enter into certain transactions with affiliates. The indenture governing the Senior Notes contains customary negative covenants that generally limit the ability of Denali Intermediate, Dell, and Dell’s and Denali’s other restricted subsidiaries to incur additional debt or issue certain preferred shares, pay dividends on or make other distributions in respect of capital stock or make other restricted payments, make certain investments, sell or transfer certain assets, create liens on certain assets to secure debt, consolidate, merge, sell, or otherwise dispose of all or substantially all assets, enter into certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The negative covenants under such credit agreements and indenture are subject to certain exceptions, qualifications and “baskets.” The indentures governing the First Lien Notes, the Unsecured Notes and Debentures, and the EMC Notes variously impose limitations, subject to specified exceptions, on creating certain liens, entering into sale and lease-back transactions, and entering into certain asset sales. As of October 28, 2016, the Company had certain consolidated subsidiaries that were designated as unrestricted subsidiaries for all purposes of the applicable credit agreements and the indentures governing the First Lien Notes and the Senior Notes. As of October 28, 2016, unrestricted net assets of the consolidated subsidiaries were approximately $32.8 billion. The foregoing credit agreements and indentures contain customary events of default, including failure to make required payments, failure to comply with covenants, and the occurrence of certain events of bankruptcy and insolvency.

The Term Loan A-1 Facility, the Term Loan A-2 Facility, the Term Loan A-3 Facility, and the Revolving Credit Facility are subject to a first lien net leverage ratio covenant that will be tested at the end of each fiscal quarter of Dell with respect to Dell’s preceding four fiscal quarters. The Company was in compliance with this financial covenant as of October 28, 2016.