Debt

Credit Facilities

At December 31, 2017, our short-term liquidity sources include a $2.5 billion revolving credit facility, or Credit Facility, expiring on July 31, 2021, uncommitted credit lines aggregating $1.2 billion and the ability to issue up to $2 billion of commercial paper.

There were no outstanding commercial paper issuances or borrowings under the Credit Facility or the uncommitted credit lines at December 31, 2017 and 2016. Available and unused credit lines at December 31, 2017 and 2016 were (in millions):



	2017		2016
Credit Facility	$	2,500.0	$	2,500.0
Uncommitted credit lines	1,181.0		1,132.0
Available and unused credit lines	$	3,681.0	$	3,632.0

The Credit Facility contains financial covenants that require us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA of no more than 3 times for the most recently ended 12-month period (EBITDA is defined as earnings before interest, taxes, depreciation and amortization) and an Interest Coverage Ratio of consolidated EBITDA to interest expense of at least 5 times for the most recently ended 12-month period. At December 31, 2017 we were in compliance with these covenants as our Leverage Ratio was 2.1 times and our Interest Coverage Ratio was 10.4 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

Short-Term Debt

Short-term debt at December 31, 2017 and 2016 of $11.8 million and $28.7 million, respectively consists of bank overdrafts and short-term borrowings of our international subsidiaries. The weighted average interest rate was 2.6% and 9.8%, respectively. Due to the short-term nature of this debt, carrying value approximates fair value.

Long-Term Debt

Long-term debt at December 31, 2017 and 2016 was (in millions):



	2017			2016
6.25% Senior Notes due 2019	$	500.0		$	500.0
4.45% Senior Notes due 2020	1,000.0			1,000.0
3.625% Senior Notes due 2022	1,250.0			1,250.0
3.65% Senior Notes due 2024	750.0			750.0
3.60% Senior Notes due 2026	1,400.0			1,400.0
Other debt	—			0.1
	4,900.0			4,900.1
Unamortized premium (discount), net	6.2			7.6
Unamortized debt issuance costs	(20.3		)	(24.2		)
Unamortized deferred gain from settlement of interest rate swaps	66.4			84.7
Fair value adjustment attributed to outstanding interest rate swaps	(39.4		)	(47.6		)
	4,912.9			4,920.6
Current portion	—			(0.1		)
Long-term debt	$	4,912.9		$	4,920.5

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under all the senior notes. The senior notes are a joint and several liability of us and OCI and we unconditionally guarantee OCI’s obligations with respect to the senior notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries and the related interest receivable. There are no restrictions on the ability of OCI or us to obtain funds from our subsidiaries through dividends, loans or advances. Our senior notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

The contractual maturities of our long-term debt at December 31, 2017 are (in millions):



2018	$	—
2019	500.0
2020	1,000.0
2021	—
2022	1,250.0
Thereafter	2,150.0
	$	4,900.0

We use fixed-to-floating interest rate swaps to manage our interest cost and structure our long-term debt portfolio to achieve a mix of fixed rate and floating rate debt. Interest rate swaps hedge the risk of changes in fair value of the underlying senior notes attributable to changes in the benchmark LIBOR interest rate. The interest rate swaps qualify and are designated as fair value hedges on the underlying senior notes and have the economic effect of converting the underlying fixed rate senior notes to floating rate obligations. Gains and losses attributed to changes in the fair value of the swaps substantially offset changes in the fair value of the underlying senior notes attributed to changes in the benchmark interest rate. Accordingly, any hedge ineffectiveness is not material to our results of operations.

In October 2015, we entered into a $750 million interest rate swap on our 3.65% Senior Notes due 2024, or 2024 Notes. We receive fixed interest payments of 3.65% and pay a variable interest equal to three-month LIBOR, plus a spread of 1.72%.

In April 2016, concurrent with the issuance of our 3.60% Senior Notes due 2026, or 2026 Notes, we entered into a $500 million interest rate swap. We receive fixed interest payments of 3.60% and pay a variable interest equal to three-month LIBOR, plus a spread of 1.982%.

At December 31, 2017, we recorded long-term liabilities of $14.7 million and $24.7 million representing the fair value of the swaps on the 2024 Notes and 2026 Notes, respectively and at December 31, 2016, we recorded long-term liabilities of $17.1 million and $30.5 million, respectively. The interest rate swaps have the economic effect of converting our long-term debt portfolio to approximately 75% fixed rate obligations and 25% floating rate obligations.

Interest Expense

Interest expense for the three years ended December 31, 2017 is composed of (in millions):



	2017			2016			2015
Long-term debt	$	201.6		$	205.5		$	210.2
Interest rate swaps	(7.2		)	(13.1		)	(44.1		)
Amortization of deferred gain on interest rate swaps	(12.9		)	(15.4		)	(9.2		)
Commercial paper	12.5			6.8			4.8
Fees	5.6			5.6			5.7
Other	24.9			20.3			13.7
	$	224.5		$	209.7		$	181.1