Debt

12 Months Ended

Jan. 01, 2022

DEBT

The following table presents the components of notes payable at year end January 1, 2022 and January 2, 2021:


(millions)	2021				2020
	Principal amount		Effective interest rate		Principal amount		Effective interest rate
U.S. commercial paper	$	—	—	%	$	25	0.20	%

Bank borrowings	137				77
Total	$	137			$	102

The following table presents the components of subordinated long-term debt at year end January 1, 2022 and January 2, 2021:


(millions)	2021		2020
4.50% $650 million U.S. Dollar Notes due 2046	$	638	$	638
7.45% $625 million U.S. Dollar Debentures due 2031	622		621
2.10% $500 million U.S. Dollar Notes due 2030	496		496
0.50% €300 million Euro Notes due 2029	338		—
4.30% $600 million U.S. Dollar Notes due 2028	592		596
3.40% $600 million U.S. Dollar Notes due 2027	596		596
3.25% $750 million U.S. Dollar Notes due 2026	744		742
1.25% €600 million Euro Notes due 2025	693		748
1.00% €600 million Euro Notes due 2024	695		756
2.65% $600 million U.S. Dollar Notes due 2023	545		542
2.75% $400 million U.S. Dollar Notes due 2023	207		204
0.80% €600 million Euro Notes due 2022	682		731
1.75% €500 million Euro Notes due 2021	—		610


Other	126		93
	6,974		7,373
Less current maturities	(712)		(627)
Balance at year end	6,262		6,746

In 2021, the Company issued €300 million of eight-year 0.50% Euro Notes due 2029, resulting in net proceeds of €298 million after discount and underwriting commissions. The 2029 Euro Notes were issued as a sustainability bond, and thus an amount equal to the net proceeds will be used to finance or refinance, in whole or in part, one or more eligible environmental or social projects described in the Company's Sustainability Bond Framework. 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. Additionally, the Company repaid the €500 million, seven-year 1.75% Euro Notes due 2021, upon maturity.

In December of 2020, the Company redeemed $198 million of its 3.25% U.S. Dollar Notes due May 2021, and $358 million of its 3.125% U.S. Dollar Notes due 2022. In connection with the debt redemption, the Company incurred $20 million of interest expense, primarily consisting of premium on the tender offer, acceleration of unamortized debt discount on the redeemed debt, fees related to the tender offer, and also included accelerated losses on pre-issuance interest rate hedges.

All of the Company’s 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 and also contain a change of control provision. There are no significant restrictions on the payment of dividends by the Company. The Company was in compliance with all these covenants as of January 1, 2022.

The Company and two of its subsidiaries (the Issuers) maintain a program under which the Issuers may issue euro-commercial paper notes up to a maximum aggregate amount outstanding at any time of $750 million or its equivalent in alternative currencies. The notes may have maturities ranging up to 364 days and will be senior unsecured obligations of the applicable Issuer. Notes issued by subsidiary Issuers will be guaranteed by the Company. The notes may be issued at a discount or may bear fixed or floating rate interest or a coupon calculated by reference to an index or formula. There were no commercial paper notes outstanding under this program as of January 1, 2022 and January 2, 2021.

At January 1, 2022, the Company had $3.1 billion of short-term lines of credit and letters of credit, of which $3.0 billion were unused and available for borrowing primarily on an unsecured basis. These lines were comprised principally of the December 2021 unsecured $1.5 billion Five-Year Credit Agreement, which expires in December 2026, and an unsecured $1.0 billion 364-Day Credit Agreement.

The Five-Year Credit Agreement allows the Company to borrow, on a revolving credit basis, up to $1.5 billion, which includes the ability to obtain European swingline loans in an aggregate principal amount up to the equivalent of $300 million. In December 2021, the Company terminated the original Five-Year Credit Agreement, which was originally set to expire in January of 2023, and entered into a new Five-Year Credit Agreement, which expires in December 2026.

In December 2021, the Company entered into an unsecured 364-Day Credit Agreement to borrow, on a revolving credit basis, up to $1.0 billion at any time outstanding, and terminated the $1.0 billion 364-day facility that was originally set to expire in January 2022.

The Five-Year and 364 Day Credit Agreements which had no outstanding borrowings as January 1, 2022, contain customary covenants and warranties, including specified restrictions on indebtedness, liens and a specified interest expense coverage ratio. If an event of default occurs, then, to the extent permitted, the administrative agents may terminate the commitments under the credit facilities, accelerate any outstanding loans under the agreements, and demand the deposit of cash collateral equal to the lender's letter of credit exposure plus interest. The Company was in compliance with all financial covenants contained in these agreements at January 1, 2022 and January 2, 2021.

Scheduled principal repayments on long-term debt are (in millions): 2022–$712; 2023–$793; 2024–$702; 2025–$691; 2026–$759; 2027 and beyond–$3,341.

Financial institutions have issued standby letters of credit conditionally guaranteeing obligations on behalf of the Company totaling $137 million, including $45 million secured and $92 million unsecured, as of January 1, 2022. These obligations are related primarily to insurance programs. There were no amounts drawn down on the letters of credit as of January 1, 2022.

The Company has issued guarantees for a certain portion of debt of unconsolidated affiliates. These arrangements include cross guarantees back from the other shareholder in proportion to their ownership of the unconsolidated affiliates. These guarantees are not material to the Company.

Interest expense capitalized as part of the construction cost of fixed assets was immaterial for all periods presented.