SENIOR NOTES PAYABLE

6 Months Ended

Mar. 31, 2021

SENIOR NOTES PAYABLE

The following table summarizes our senior notes payable.


$ in millions	March 31, 2021		September 30, 2020
5.625% senior notes, due 2024	$	250	$	250
3.625% senior notes, due 2026	500		500
4.65% senior notes, due 2030	500		500
4.95% senior notes, due 2046	800		800
Total principal amount	2,050		2,050
Unaccreted premium/(discount)	9		10
Unamortized debt issuance costs	(14)		(15)
Total senior notes payable	$	2,045	$	2,045

In March 2012, we sold in a registered underwritten public offering $250 million in aggregate principal amount of 5.625% senior notes due April 2024. In July 2016, we sold in a registered underwritten public offering $500 million in aggregate principal amount of 3.625% senior notes due September 2026. Interest on these senior notes was payable semi-annually. In April and May 2021, we repurchased or redeemed, as applicable, all of the outstanding 5.625% senior notes due April 2024 and 3.625% senior notes due September 2026. See the discussion of the tender offers and redemptions of such senior notes described below.

In March 2020, we sold in a registered underwritten public offering $500 million in aggregate principal amount of 4.65% senior notes due April 2030. Interest on these senior notes is payable semi-annually. We may redeem some or all of these senior notes at any time prior to January 1, 2030, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S. Treasury rate, plus 50 basis points; and on or after January 1, 2030, at 100% of the principal amount of the notes redeemed; plus, in each case, accrued and unpaid interest thereon to the redemption date.

In July 2016, we sold in a registered underwritten public offering $300 million in aggregate principal amount of 4.95% senior notes due July 2046. In May 2017, we reopened the offering and sold, in a registered underwritten public offering, an additional $500 million in aggregate principal amount of 4.95% senior notes due July 2046. These additional senior notes were consolidated, formed into a single series, and are fully fungible with the $300 million in aggregate principal amount of 4.95% senior notes issued in July 2016. Interest on these senior notes is payable semi-annually. We may redeem some or all of these senior notes at any time prior to their maturity, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S. Treasury rate, plus 45 basis points, plus accrued and unpaid interest thereon to the redemption date.

Senior notes offering

In April 2021, we sold in a registered underwritten public offering $750 million in aggregate principal amount of 3.75% senior notes due April 2051. Interest on these senior notes is payable semi-annually. We may redeem some or all of these senior notes at any time prior to October 1, 2050, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S. Treasury rate, plus 20 basis points; and on or after October 1, 2050, at 100% of the principal amount of the notes redeemed; plus, in each case, accrued and unpaid interest thereon to the redemption date. These senior notes will be reflected on our Condensed Consolidated Statement of Financial Condition beginning in our third fiscal quarter of 2021.

Tender offers and redemptions of certain senior notes

Concurrently with the launch of our offering of $750 million in aggregate principal amount of 3.75% senior notes due April 2051, we commenced cash tender offers (the “Tender Offers”) for any and all of our outstanding 5.625% senior notes due 2024 and 3.625% senior notes due 2026 (the “Existing Notes”), pursuant to which we repurchased an aggregate of $332 million outstanding Existing Notes for an aggregate purchase price of $373 million. The Tender Offers expired on April 14, 2021.

In addition, on April 1, 2021, we issued notices of redemption to holders of the Existing Notes pursuant to the indentures governing such notes, to redeem any Existing Notes that remained outstanding following the closing of the Tender Offers. On May 3, 2021, we redeemed the remaining outstanding balance of the Existing Notes of $418 million for an aggregate redemption price of $473 million.

These repurchases and redemptions were funded with the net proceeds from our offering of 3.75% senior notes due April 2051 and cash on hand and will result in a charge of approximately $97 million as a loss on extinguishment of debt, comprised of make-whole premiums and unamortized debt issuance costs, which will be included on our Condensed Consolidated Statement of Income and Comprehensive Income in our third fiscal quarter of 2021.