Borrowing Facilities and Debt

3 Months Ended

Jan. 26, 2020

Applied has credit facilities for unsecured borrowings in various currencies of up to $1.6 billion, of which $1.5 billion is comprised of a committed revolving credit agreement with a group of banks that is scheduled to expire in September 2021. This 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. Remaining credit facilities in the amount of approximately $73 million are 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.

In August 2019, Applied entered into a term loan credit agreement with a group of lenders. Under the agreement, the lenders have committed to make an unsecured term loan to Applied of up to $2.0 billion to finance in part Applied’s planned acquisition of all outstanding shares of Kokusai Electric, to pay related transaction fees and expenses and for general corporate purposes. The commitments of the lenders to make the term loan will terminate if the transactions contemplated by the SPA are not consummated on or before June 30, 2020, which date may be extended by three months on two separate occasions if, on the applicable date, the only remaining conditions to closing relate to required regulatory approvals. The term loan, if advanced, will bear interest at one of two rates selected by Applied, plus an applicable margin, which varies according to Applied’s public debt credit ratings, and must be repaid in full on the third anniversary of the funding date of the term loan.

No amounts were outstanding under any of these facilities at both January 26, 2020 and October 27, 2019, 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 January 26, 2020 and October 27, 2019, Applied did not have any commercial paper outstanding.

Debt outstanding as of January 26, 2020 and October 27, 2019 was as follows:


	Principal Amount
	January 26, 2020		October 27, 2019		Effective Interest Rate	Interest Pay Dates

	(In millions)
Current portion of long-term debt
2.625% Senior Notes Due 2020	$	600	$	600	2.640%	April 1, October 1


Total current portion of long-term debt	600		600
Long-term debt:


4.300% Senior Notes Due 2021	750		750		4.326%	June 15, December 15
3.900% Senior Notes Due 2025	700		700		3.944%	April 1, October 1
3.300% Senior Notes Due 2027	1,200		1,200		3.342%	April 1, October 1
5.100% Senior Notes Due 2035	500		500		5.127%	April 1, October 1
5.850% Senior Notes Due 2041	600		600		5.879%	June 15, December 15
4.350% Senior Notes Due 2047	1,000		1,000		4.361%	April 1, October 1
	4,750		4,750
Total unamortized discount	(10)		(10)
Total unamortized debt issuance costs	(26)		(27)
Total long-term debt	$	4,714	$	4,713

Total debt	$	5,314	$	5,313