Debt

3 Months Ended

Nov. 30, 2020

Debt carrying values are presented net of unamortized discount and debt issuance costs, where applicable, and foreign currency denominated debt is translated using the spot rates as of the balance sheet date. Debt consists of the following (all amounts are presented in millions of U.S. dollars and debt issuances are denominated in U.S. dollars, unless otherwise noted):


	November 30, 2020		August 31, 2020
Short-term debt
Commercial paper	$	1,662	$	1,517
Credit facilities	1,617		1,071
£700 million note issuance 1
2.875% unsecured Pound sterling notes due 2020	—		533
$8 billion note issuance 1
3.300% unsecured notes due 2021	1,249		—
Other 2	718		418
Total short-term debt	$	5,245	$	3,538

Long-term debt
$1.5 billion note issuance 1
3.200% unsecured notes due 2030	$	497	$	497
4.100% unsecured notes due 2050	990		990
$6 billion note issuance 1
3.450% unsecured notes due 2026	1,892		1,891
4.650% unsecured notes due 2046	591		591
$8 billion note issuance 1

3.300% unsecured notes due 2021	—		1,248
3.800% unsecured notes due 2024	1,994		1,993
4.500% unsecured notes due 2034	496		496
4.800% unsecured notes due 2044	1,493		1,493
£700 million note issuance 1

3.600% unsecured Pound sterling notes due 2025	400		398
€750 million note issuance 1
2.125% unsecured Euro notes due 2026	896		891
$4 billion note issuance3
3.100% unsecured notes due 2022	1,198		1,198
4.400% unsecured notes due 2042	493		493
Other 4	34		24
Total long-term debt, less current portion	$	10,973	$	12,203

1Notes are unsubordinated debt obligations of the Company and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. On October 20, 2020, the Company redeemed in full the £400 million aggregate principal amount outstanding of its 2.875% notes due 2020 issued by the Company on November 20, 2014.

2Other short-term debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies.

3Notes are senior debt obligations of Walgreen Co. and rank equally with all other unsecured and unsubordinated indebtedness of Walgreen Co. On December 31, 2014, the Company fully and unconditionally guaranteed the outstanding notes on an unsecured and unsubordinated basis. The guarantee, for so long as it is in place, is an unsecured,

unsubordinated debt obligation of the Company and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company.

4Other long-term debt represents a mix of fixed and variable rate debt in various currencies with various maturities.

$1.5 Billion Note Issuance

On April 15, 2020, the Company issued in an underwritten public offering $0.5 billion of 3.20% notes due 2030 and $1.0 billion of 4.10% notes due 2050. Total issuance costs relating to the notes, including underwriting discounts and offering expenses were $13.3 million.

Credit facilities

December 23, 2020 Revolving Credit Agreement

On December 23, 2020, the Company entered into a revolving credit agreement (the “2020 Revolving Credit Agreement”) with the lenders from time to time party thereto. The 2020 Revolving Credit Agreement includes a (i) a $1.25 billion senior unsecured 364-day revolving credit facility (the “364-Day Facility”) and (ii) a $2.25 billion senior unsecured 18-month revolving credit facility, with a swing line subfacility commitment amount of $350 million. The 364-Day Facility’s termination date is the earlier of (i) 364 days from December 23, 2020, the effective date (subject to the extension thereof pursuant to the 2020 Revolving Credit Agreement) and (ii) the date of termination in whole of the aggregate amount of the revolving commitments under the 364-Day Facility pursuant to the 2020 Revolving Credit Agreement. The 18-Month Facility’s termination date is the earlier of (i) 18 months from the effective date (subject to the extension thereof pursuant to the 2020 Revolving Credit Agreement) and (ii) the date of termination in whole of the aggregate amount of the revolving commitments under the 18-Month Facility pursuant to the 2020 Revolving Credit Agreement.

April 7, 2020 Revolving Credit Agreement

On April 7, 2020, the Company and with WBA Financial Services Limited, a private limited company incorporated under the laws of England and Wales (“WBAFSL”), as co-borrowers, entered into a $500 million revolving credit agreement (the “April 7, 2020 Revolving Credit Agreement”) with the lenders from time to time party thereto. The April 7, 2020 Revolving Credit Agreement is a senior unsecured revolving credit facility, with a facility termination date of the earlier of (a) 364-days from April 7, 2020 and (b) the date of termination in whole of the aggregate amount of the commitments pursuant to the April 7, 2020 Revolving Credit Agreement. The Company and WBAFSL are co-borrowers under the April 7, 2020 Revolving Credit Agreement. Pursuant to the terms of the April 7, 2020 Revolving Credit Agreement, the Company provides a guarantee of any obligations of WBAFSL under the April 7, 2020 Revolving Credit Agreement. As of November 30, 2020, there were no borrowings outstanding under the April 7, 2020 Revolving Credit Agreement. The April 7, 2020 Revolving Credit Agreement was terminated in accordance with its terms and conditions on December 23, 2020. The April 7, 2020 Revolving Credit Agreement was terminated concurrently with the execution of the 2020 Revolving Credit Agreement described above.

April 2020 Revolving Bilateral and Club Credit Agreements

The Company entered into a $750 million revolving credit agreement on April 1, 2020 (the “April 2020 Revolving Bilateral Credit Agreement”) and a $1.325 billion revolving credit agreement on April 2, 2020 (the “April 2020 Revolving Club Credit Agreement” and together with the April 2020 Revolving Bilateral Credit Agreement, the “Other April 2020 Revolving Credit Agreements”) with the lenders from time to time party thereto. Each of the Other April 2020 Revolving Credit Agreements is a senior unsecured revolving credit facility, with a facility termination date of the earlier of (a) March 31, 2021 (which date shall be shortened pursuant to the terms of the applicable Other April 2020 Revolving Credit Agreement if the Company does not extend the maturity date of certain of its existing credit agreements or enter into new bank or bond financings with a certain maturity date and above an aggregate principal amount as described in the applicable Other April 2020 Revolving Credit Agreement) and (b) the date of termination in whole of the aggregate amount of the commitments pursuant to the applicable Other April 2020 Revolving Credit Agreement. As of November 30, 2020, there were no borrowings outstanding under the Other April 2020 Revolving Credit Agreements. The other April 2020 Revolving Credit Agreements were terminated in accordance with their terms and conditions as of December 23, 2020. The other April 2020 Revolving Credit Agreements were terminated concurrently with the execution of the 2020 Revolving Credit Agreement described above.

August 2019 Revolving Credit Agreements

On August 30, 2019, the Company entered into three $500 million revolving credit agreements (together, the “August 2019 Revolving Credit Agreements” and each individually, an “August 2019 Revolving Credit Agreement”) with the lenders from time to time party thereto. Each of the August 2019 Revolving Credit Agreements are senior unsecured revolving credit facilities, with facility termination dates of the earlier of (a) 18 months following August 30, 2019, subject to extension thereof pursuant to the applicable August 2019 Revolving Credit Agreement, and (b) the date of termination in whole of the aggregate amount of the commitments pursuant to the applicable August 2019 Revolving Credit Agreement. As of November 30, 2020, there were no borrowings outstanding under the August 2019 Revolving Credit Agreements. The August 2019 Revolving

Credit Agreements were terminated in accordance with their terms and conditions as of December 23, 2020. The August 2019 Revolving Credit Agreements were terminated concurrently with the execution of the 2020 Revolving Credit Agreement described above.

January 2019 364-Day Revolving Credit Agreement

On January 18, 2019, the Company entered into a $2.0 billion 364-day revolving credit agreement (as extended, the “January 2019 364-Day Revolving Credit Agreement”) with the lenders from time to time party thereto. The January 2019 364-Day Revolving Credit Agreement is a senior unsecured 364-day revolving credit facility, with an original facility termination date of 364 days following January 31, 2019, subject to extension. On December 18, 2019, the Company entered into an Extension Agreement (the “Extension Agreement”) relating to the January 2019 364-Day Revolving Credit Agreement with the lenders party thereto and Mizuho, as administrative agent. The Extension Agreement extended the Maturity Date (as defined in the January 2019 364-Day Revolving Credit Agreement) for an additional period of 364 days to January 28, 2021. Such extension became effective on January 30, 2020. As of November 30, 2020, there were no borrowings outstanding under the January 364-Day Revolving Credit Agreement. The January 2019 364-Day Revolving Credit Agreement was partially terminated in accordance with its terms and conditions, reducing the amount available to $0.5 billion as of December 23, 2020, concurrently with the execution of the 2020 Revolving Credit Agreement described above.

A&R December 2018 Credit Agreement

On December 5, 2018, the Company entered into a $1.0 billion term loan credit agreement with the lenders from time to time party thereto and, on August 9, 2019, the Company entered into an amendment to such credit agreement (such credit agreement as so amended, the “December 2018 Credit Agreement”) to permit the Company to borrow, repay and reborrow amounts borrowed thereunder prior to the maturity date. On April 2, 2020, the Company amended and restated the December 2018 Credit Agreement (such credit agreement as so amended and restated, the “A&R December 2018 Credit Agreement”). The A&R December 2018 Credit Agreement governs a $2.0 billion senior unsecured revolving credit facility, consisting of the initial $1.0 billion senior unsecured revolving facility (the "Initial Commitments") previously governed by the December 2018 Credit Agreement and a new $1.0 billion senior unsecured revolving credit facility (the "New Commitments"). The facility termination date is the earlier of (a) January 29, 2021 (which date shall be extended to February 26, 2021 or July 31, 2021 pursuant to the terms of the A&R December 2018 Credit Agreement if the Company extends the maturity date of certain of its existing credit agreements or enters into new bank or bond financings with a certain maturity date and above an aggregate principal amount as described in the A&R December 2018 Credit Agreement ) and (b) the date of termination in whole of the aggregate amount of the commitments pursuant to the A&R December 2018 Credit Agreement. As of November 30, 2020, there were $0.7 billion borrowings outstanding under the A&R December 2018 Credit Agreement. Concurrently with the execution of the 2020 Revolving Credit Agreement described above, the A&R December 2018 Credit Agreement was partially terminated in accordance with its terms and conditions, by the cancellation of $1 billion of New Commitments, thereby reducing the amount available to $1 billion of Initial Commitments thereunder as of December 23, 2020. The A&R was also amended to set the final maturity date under the agreement at January 29, 2021.

Amended November 2018 Credit Agreement

On November 30, 2018, the Company entered into a $1.0 billion credit agreement, consisting of a $500 million senior unsecured revolving credit facility and a $500 million senior unsecured term loan facility, with the lenders from time to time party thereto, on March 25, 2019, the Company entered into an amendment to such credit agreement (such credit agreement as so amended, the “November 2018 Credit Agreement”) reflecting certain changes to the borrowing notice provisions thereto. On April 2, 2020, the Company entered into a second amendment to the November 2018 Credit Agreement (such credit agreement as so further amended, the “Amended November 2018 Credit Agreement”) which amendment became effective as of May 29, 2020. As of May 29, 2020, the $500 million revolving credit facility portion of the November 2018 Credit Agreement was converted into a term loan facility, such that the Amended November 2018 Credit Agreement consists of a $1.0 billion senior unsecured term loan facility. The facility termination date is the earlier of (a) May 29, 2021 and (b) the date of acceleration of all loans under the Amended November 2018 Credit Agreement pursuant to its terms. As of November 30, 2020, there were $0.9 billion of borrowings outstanding under the Amended November 2018 Credit Agreement.

August 2018 Revolving Credit Agreement

On August 29, 2018, the Company entered into a revolving credit agreement (the “August 2018 Revolving Credit Agreement”) with the lenders and letter of credit issuers from time to time party thereto. The August 2018 Revolving Credit Agreement is an unsecured revolving credit facility with aggregate commitment in the amount of $3.5 billion, with a letter of credit subfacility commitment amount of $500 million. The facility termination date is the earlier of (a) August 29, 2023, subject to extension thereof pursuant to the August 2018 Revolving Credit Agreement, and (b) the date of termination in whole of the aggregate amount of the revolving commitments pursuant to the August 2018 Revolving Credit Agreement. As of November 30, 2020, there were no borrowings outstanding under the August 2018 Revolving Credit Agreement.

Debt covenants

Each of the Company’s credit facilities described above contain a covenant to maintain, as of the last day of each fiscal quarter, a ratio of consolidated debt to total capitalization not to exceed 0.60:1.00, subject to increase in certain circumstances set forth in the applicable credit agreement. The credit facilities also contain various other customary covenants.

Commercial paper

The Company periodically borrows under its commercial paper program and may borrow under it in future periods. The Company had average daily U.S. commercial paper outstanding of $1.6 billion and $2.9 billion at a weighted average interest rate of 0.63% and 2.55% for the three months ended November 30, 2020 and 2019, respectively. A subsidiary of the Company had average daily commercial paper outstanding, which was issued under the Joint HM Treasury and Bank of England's COVID Corporate Financing Facility commercial paper program, of £300 million or approximately $401 million at a weighted average interest rate of 0.43% for the three months ended November 30, 2020. The subsidiary's repayment obligations are guaranteed by the Company.

Interest

Interest paid by the Company was $234 million and $245 million for the three months ended November 30, 2020 and 2019, respectively.