Debt and Credit Facilities

6 Months Ended

Jul. 01, 2017

Debt Disclosure [Abstract]

Debt and Credit Facilities

Debt and Credit Facilities

On April 25, 2017, the Company entered into a $2.2 billion syndicated, unsecured revolving credit facility expiring April 2022, which can be used for borrowing and letters of credit (the "2017 Motorola Solutions Credit Agreement"). The 2017 Motorola Solutions Credit Agreement replaces the 2014 Motorola Solutions Credit Agreement.

The 2017 Motorola Solutions Credit Agreement has a $500 million letter of credit sub-limit with $450 million of fronting commitments. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the London Interbank Offered Rate, at the Company's option. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes.

Under the 2017 Motorola Solutions Credit Agreement, the Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2017 Motorola Solutions Credit Agreement. The Company was in compliance with it financial covenants as of July 1, 2017. The Company did not borrow or issue any letters of credit under the 2017 Motorola Solutions Credit Agreement during the three months ended July 1, 2017.

On August 25, 2015, the Company entered into an agreement with Silver Lake Partners to issue $1.0 billion of 2% Senior Convertible Notes which mature in September 2020. The notes are convertible anytime on or after two years from their issuance date, except in certain limited circumstances including, for example, if the volume weighted average price of the Company's stock exceeds $85 for ten consecutive trading days, then up to 20% of the notes may be transferred, and then subsequently converted to shares of Company stock by such transferee. The notes are convertible based on a conversion rate of 14.5985 per $1,000 principal amount (which is equal to an initial conversion price of $68.50 per share).  During the three months ended July 1, 2017, the volume weighted average price of the Company's stock exceeded $85 for ten consecutive trading days, making 20% of Senior Convertible Notes convertible. In the event of conversion, the notes may be settled in either cash or stock, at the Company's discretion. The Company intends to settle the principal amount of the Senior Convertible Notes in cash.