Financing Arrangements

12 Months Ended

Apr. 26, 2019

Current debt obligations consisted of the following:



(in millions)	April 26, 2019		April 27, 2018
Bank borrowings	$	332	$	355
Floating rate five-year 2015 senior notes	500		—
Capital lease obligations	6		5
Commercial paper	—		698
1.700 percent two-year 2017 senior notes	—		1,000
Current debt obligations	$	838	$	2,058

Bank Borrowings Outstanding bank borrowings at April 26, 2019 were short-term advances to certain non-U.S. subsidiaries under credit agreements with various banks. Bank borrowings consist primarily of borrowings in Japanese Yen at an interest rate of 0.18%, and the borrowing is a natural hedge of currency and exchange rate risk.

Commercial Paper On January 26, 2015, Medtronic Global Holdings S.C.A. (Medtronic Luxco), an entity organized under the laws of Luxembourg, entered into various agreements pursuant to which Medtronic Luxco may issue unsecured commercial paper notes (the 2015 Commercial Paper Program) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion. The Company and Medtronic, Inc. have guaranteed the obligations of Medtronic Luxco under the 2015 Commercial Paper Program.

There was no commercial paper outstanding at April 26, 2019, as compared to $698 million outstanding at April 27, 2018. During fiscal years 2019 and 2018, the weighted average original maturity of the commercial paper outstanding was approximately 27 days and 28 days, respectively, and the weighted average interest rate was 2.12 percent and 1.46 percent, respectively. The issuance of commercial paper reduces the amount of credit available under the Company's existing Credit Facility, defined below.

Line of Credit On December 12, 2018, Medtronic Luxco, as borrower, entered into an amended and restated credit agreement (Credit Facility), by and among Medtronic, Medtronic, Inc., Medtronic Luxco, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent and issuing bank, which expires in December 2023. The Credit Facility replaces the previous credit agreement dated November 7, 2014 and effective as of January 26, 2015.

The Credit Facility provides for a $3.5 billion five-year unsecured revolving credit facility (Credit Facility). At each anniversary date of the Credit Facility, but not more than twice prior to the maturity date, the Company could also request a one-year extension of the maturity date. The Credit Facility provides the Company with the ability to increase its borrowing capacity by an additional $1.0 billion at any time during the term of the agreement. The Company and Medtronic, Inc. have guaranteed the obligations of the borrowers under the Credit Facility, and Medtronic Luxco will also guarantee the obligations of any designated borrower. The Credit Facility includes a multi-currency borrowing feature for certain specified foreign currencies. At April 26, 2019 and April 27, 2018, no amounts were outstanding under the original or amended credit facilities.

Interest rates on advances on the Credit Facility are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service. Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. The agreements also contain customary covenants, all of which the Company remained in compliance with at April 26, 2019.

Long-term debt consisted of the following:



		April 26, 2019					April 27, 2018
(in millions, except interest rates)	Maturity by Fiscal Year	Amount			Effective Interest Rate		Amount			Effective Interest Rate
Floating rate five-year 2015 senior notes	2020	$	—		—	%	$	500		2.92	%
2.500 percent five-year 2015 senior notes	2020	—			—		2,500			2.63
4.200 percent ten-year 2010 CIFSA senior notes	2021	—			—		600			2.33
0.000 percent two-year 2019 senior notes	2021	1,681			0.22		—			—
Floating rate two-year 2019 senior notes	2021	560			0.05		—			—
4.125 percent ten-year 2011 senior notes	2021	500			4.21		500			4.21
3.150 percent seven-year 2015 senior notes	2022	2,500			3.29		2,500			3.29
3.125 percent ten-year 2012 senior notes	2022	675			3.21		675			3.21
3.200 percent ten-year 2012 CIFSA senior notes	2023	650			2.72		650			2.72
0.375 percent four-year 2019 senior notes	2023	1,681			0.56		—			—
2.750 percent ten-year 2013 senior notes	2023	530			3.25		530			3.25
2.950 percent ten-year 2013 CIFSA senior notes	2024	310			2.71		310			2.71
3.625 percent ten-year 2014 senior notes	2024	850			3.61		850			3.61
3.500 percent ten-year 2015 senior notes	2025	4,000			3.74		4,000			3.74
1.125 percent eight-year 2019 senior notes	2027	1,681			1.25		—			—
3.350 percent ten-year 2017 senior notes	2027	850			3.53		850			3.53
1.625 percent twelve-year 2019 senior notes	2031	1,121			1.75		—			—
4.375 percent twenty-year 2015 senior notes	2035	2,382			4.47		2,382			4.47
6.550 percent thirty-year 2007 CIFSA senior notes	2038	284			4.68		374			4.68
2.250 percent twenty-year 2019 senior notes	2039	1,121			2.34		—			—
6.500 percent thirty-year 2009 senior notes	2039	183			6.56		300			6.56
5.550 percent thirty-year 2010 senior notes	2040	306			5.58		500			5.58
4.500 percent thirty-year 2012 senior notes	2042	129			4.54		400			4.54
4.000 percent thirty-year 2013 senior notes	2043	325			4.10		325			4.10
4.625 percent thirty-year 2014 senior notes	2044	177			4.67		650			4.67
4.625 percent thirty-year 2015 senior notes	2045	1,963			4.69		4,150			4.69
Bank borrowings	2021-2022	83			1.94		125			3.99
Debt premium, net	2021-2045	29			—		120			—
Capital lease obligations	2021-2028	10			6.39		21			4.46
Interest rate swaps	2021-2022	9			—		(6		)	—
Deferred financing costs	2021-2045	(104		)	—		(107		)	—
Long-term debt		$	24,486				$	23,699

Senior Notes The Company has outstanding unsecured senior obligations, described as senior notes in the tables above (collectively, the Senior Notes). The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company. The indentures under which the Senior Notes were issued contain customary covenants, all of which the Company remained in compliance with at April 26, 2019. The Company used the net proceeds from the sale of the Senior Notes primarily for general corporate purposes, which includes the repayment of other indebtedness of the Company.

In March 2019, Medtronic Luxco issued six tranches of Euro-denominated Senior Notes with an aggregate principal of €7.0 billion, with maturities ranging from fiscal year 2021 to fiscal year 2039, resulting in cash proceeds of approximately $7.8 billion, net of

discounts and issuance costs (collectively, the 2019 Senior Notes). The issuance included €500 million of floating rate Senior Notes due in fiscal year 2021, €1.5 billion of 0.000 percent Senior Notes due in fiscal year 2021, €1.5 billion of 0.375 percent Senior Notes due in fiscal year 2023, €1.5 billion of 1.125 percent Senior Notes due in fiscal year 2027, €1.0 billion of 1.625 percent Senior Notes due in fiscal year 2031, and €1.0 billion of 2.250 percent Senior Notes due in fiscal year 2039. The Company used a portion of the net proceeds of the offering to fund the previously announced cash tender offers and early redemption, described below. The Euro-denominated debt is designated as a net investment hedge of certain of the Company's European operations. Refer to Note 8 for additional information regarding the net investment hedge.

The Company completed the cash tender offer and early redemption of $6.4 billion of Medtronic Inc. and CIFSA senior notes for $6.9 billion of total consideration in March 2019. The Company recognized a loss on debt extinguishment of $485 million, which primarily included cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums. The loss on debt extinguishment was recognized in interest expense in the consolidated statements of income. Also in March 2019, the Company repaid its 1.700 percent two-year 2017 senior notes, including interest, for $1.0 billion.

In April 2018, the Company completed an early redemption of approximately $1.2 billion of Senior Notes for $1.2 billion of total consideration. The Company recognized a loss on the debt redemption of $38 million, which included cash premiums and accelerated amortization of deferred financing costs. The loss was recognized in interest expense in the consolidated statements of income.

At April 26, 2019 and April 27, 2018, the Company had interest rate swap agreements designated as fair value hedges of certain underlying fixed-rate obligations, including the Company’s $500 million 4.125 percent 2011 Senior Notes and $675 million 3.125 percent 2012 Senior Notes. Refer to Note 8 for additional information regarding the interest rate swap agreements.

Contractual maturities of debt for the next five fiscal years and thereafter, excluding deferred financing costs, debt premium, net, and the fair value of outstanding interest rate swap agreements are as follows:



(in millions)
2020	$	838
2021	2,747
2022	3,258
2023	2,862
2024	1,161
Thereafter	14,524
Total debt	25,390
Less: Current debt obligations	838
Long-term debt	$	24,552

Financial Instruments Not Measured at Fair Value

At April 26, 2019, the estimated fair value of the Company’s Senior Notes was $26.2 billion compared to a principal value of $25.0 billion. At April 27, 2018 the estimated fair value was $25.1 billion compared to a principal value of $24.5 billion. The fair value was estimated using quoted market prices for the publicly registered Senior Notes, which are classified as Level 2 within the fair value hierarchy. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts and hedging activity.