Debt

6 Months Ended

Jun. 27, 2020

Debt

The following table presents the components of notes payable at June 27, 2020 and December 28, 2019:


	June 27, 2020						December 28, 2019
(millions)	Principal amount		Effective interest rate		Principal amount		Effective interest rate
U.S. commercial paper	$	—	—	%	$	3	1.78	%
Bank borrowings	121				104
Total	$	121			$	107

In May of 2020, the Company issued $500 million of ten-year 2.10% Notes due 2030, resulting in net proceeds after debt discount of $496 million. The proceeds from these notes were used for general corporate purposes, including the payment of offering related fees and expenses, repayment of a portion of the $600 million 4.00% Notes due 2020 when they mature on December 15, 2020, and repayment of a portion of commercial paper borrowings. The Notes contain customary covenants that limit the ability of the Company and its restricted subsidiaries (as defined) to incur certain liens or enter into certain sale and lease-back transactions, as well as a change of control provision.

In connection with the May 2020 debt issuance, the Company terminated forward starting interest rate swaps with notional amounts totaling $500 million, resulting in a $51 million loss that will be amortized to interest expense over

the term of the Notes. The effective interest rate on the Notes, reflecting issuance discount and hedge settlement, was 3.03% at June 27, 2020.