Borrowing Facilities and Debt

12 Months Ended

Oct. 25, 2015

In September 2015, Applied entered into a $1.5 billion committed revolving credit agreement with a group of banks that is scheduled to expire in September 2020. This credit agreement provides for borrowings in United States dollars at interest rates keyed to one of various benchmark rates selected by Applied for each advance, plus a margin based on Applied’s public debt rating and includes financial and other covenants. The September 2015 credit agreement replaces Applied's $1.5 billion credit agreement entered into in May 2011. In addition, Applied has credit facilities in the amount of approximately $67 million with Japanese banks. Applied’s ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in Japanese yen. No amounts were outstanding under any of these facilities at October 25, 2015 and October 26, 2014, and Applied has not utilized these credit facilities. In fiscal 2011, Applied established a short-term commercial paper program of up to $1.5 billion. At October 25, 2015 and October 26, 2014, Applied did not have any commercial paper outstanding.

In September 2015, Applied issued senior unsecured notes in the aggregate principal amount of $1.8 billion and used a portion of the net proceeds to redeem $400 million in principal amount of its 2.650% senior notes due in 2016 at a redemption price of $405 million in November 2015. After adjusting for the carrying value of debt issuance costs and discounts, Applied recorded a $5 million loss on the prepayment of the $400 million debt, which will be included as a non-operating loss in the Consolidated Statement of Operations for the first quarter of fiscal 2016.

In October 2015, a wholly-owned foreign subsidiary of Applied entered into a short-term loan agreement with multiple lenders, under which it borrowed $800 million to facilitate the return of capital to Applied.

Debt outstanding as of October 25, 2015 and October 26, 2014 was as follows:



	Principal Amount
	October 25, 2015			October 26, 2014			Effective Interest Rate	Interest Pay Dates
	(In millions)
Short-term debt:
2.650% Senior Notes Due 2016	$	400		$	—		2.666%	June 15, December 15
Other debt	800			$	—		1.0% - 1.25%
Total short-term debt	1,200			—
Long-term debt:
2.650% Senior Notes Due 2016	—			400			2.666%	June 15, December 15
7.125% Senior Notes Due 2017	200			200			7.190%	April 15, October 15
2.625% Senior Notes Due 2020	600			—			2.640%	April 1, October 1
4.300% Senior Notes Due 2021	750			750			4.326%	June 15, December 15
3.900% Senior Notes Due 2025	700			—			3.944%	April 1, October 1
5.100% Senior Notes Due 2035	500			—			5.127%	April 1, October 1
5.850% Senior Notes Due 2041	600			600			5.879%	June 15, December 15
	3,350			1,950
Total unamortized discount	(8		)	(3		)
Total long-term debt	3,342			1,947

Total debt	$	4,542		$	1,947