Debt

A summary of short-term and long-term debt outstanding is as follows:



(in millions)	December 31,
	2013		2012
5.9% Senior Notes, due 2017 ¹	$	400	$	400
6.55% Senior Notes, due 2037 ²	399		399
Commercial paper	—		457
Total debt	799		1,256
Less: short-term debt including current maturities	—		457
Long-term debt	$	799	$	799


¹	Interest payments are due semiannually on April 15 and October 15, and as of December 31, 2013, the unamortized debt discount is less than $1 million.


²	Interest payments are due semiannually on May 15 and November 15, and as of December 31, 2013, the unamortized debt discount is approximately $1 million.

Annual long-term debt maturities are scheduled as follows based on book values as of December 31, 2013: no amounts due from 2014 – 2016, approximately $400 million due in 2017 and approximately $399 million due thereafter.

Currently, we have the ability to borrow a total of $1.0 billion through our commercial paper program, which is supported by our credit facility described below. As of December 31, 2013, there were no commercial paper borrowings outstanding. In connection with the December 2012 special dividend in the amount of $2.50 per share on our common stock, we utilized our commercial paper program and as a result, commercial paper borrowings outstanding as of December 31, 2012 totaled $457 million with an average interest rate and term of 0.48% and 28 days.

On June 19, 2013, we entered into a $1.0 billion four-year credit agreement (our “credit facility”) that will terminate on June 19, 2017. This credit facility replaced our $1.2 billion three-year credit facility that was scheduled to terminate on July 30, 2013. The previous credit facility was canceled immediately after the new credit facility became effective. There were no outstanding borrowings under the previous credit facility when it was replaced.

We pay a commitment fee of 20 to 45 basis points for our credit facility, depending on our indebtedness to cash flow ratio, whether or not amounts have been borrowed and currently pay a commitment fee of 25 basis points. The interest rate on borrowings under our credit facility is, at our option, calculated using rates that are primarily based on either the prevailing London Inter-Bank Offer Rate, the prime rate determined by the administrative agent or the Federal funds rate. For certain borrowings under this credit facility there is also a spread based on our indebtness to cash flow ratio added to the applicable rate.

Our credit facility contains certain covenants. The only financial covenant requires that our indebtedness to cash flow ratio, as defined in our credit facility, is not greater than 3.25 to 1, and this covenant has never been exceeded.

On February 7, 2013, Fitch Ratings downgraded our credit rating to BBB+ from A- and placed our ratings on Rating Watch Negative. There has been no change to our short-term / commercial paper rating of F2 from Fitch Ratings. On February 14, 2013, Moody's Investors Service downgraded our credit rating from A3 to Baa2 with negative outlook. In March 2013, upon the completion of the sale of McGraw-Hill Education, Moody's withdrew our credit ratings (due to Moody's own business reasons).