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Debt
 3 Months Ended
Jul. 02, 2021
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes components of our debt:
(In millions, except percentages)
July 2, 2021April 2, 2021
Effective
Interest Rate
New 2.50% Convertible Senior Notes due April 1, 2022
$— $250 2.63 %
3.95% Senior Notes due June 15, 2022
400 400 4.05 %
New 2.00% Convertible Unsecured Notes due August 15, 2022
625 625 2.62 %
5.00% Senior Notes due April 15, 2025
1,100 1,100 5.00 %
Initial Term Loan due May 7, 20261,010 494 
LIBOR plus (1)
Delayed Term loan due May 7, 2026731 741 
LIBOR plus (1)
0.95% Avira Mortgage due December 30, 2030
5 5 0.95 %
1.29% Avira Mortgage due December 30, 2029
5 5 1.29 %
Total principal amount
3,876 3,620 
Less: unamortized discount and issuance costs
(16)(19)
Total debt3,860 3,601 
Less: current portion(438)(313)
Total long-term debt$3,422 $3,288 
(1) The term loans bear interest at a rate equal to LIBOR plus a margin based either on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt or consolidated adjusted leverage as defined in the underlying loan agreement. The interest rates for the outstanding term loans are as follows:
July 2, 2021April 2, 2021
Term Loan due May 7, 20261.50 %1.50 %
Delayed Term Loan due May 7, 20261.50 %1.50 %
As of July 2, 2021, the future contractual maturities of debt by fiscal year are as follows:
(In millions)
Remainder of 2022$29 
20231,101 
202489 
202589 
20261,189 
Thereafter1,379 
Total future maturities of debt$3,876 
Repayments of Convertible Senior Notes
In May 2021, we settled the $250 million principal and conversion rights of our New 2.5% Convertible Notes in cash. The aggregate settlement amount of $364 million was based on $24.40 per underlying share into which the New 2.5% Convertible Notes were convertible. In addition, we paid $1 million of accrued and unpaid interest through the date of settlement and $1 million of cash dividends that we declared on May 10, 2021. The repayments resulted in an adjustment to stockholders’ equity of $112 million and a loss on extinguishment of $2 million.
As of July 2, 2021 and April 2, 2021, our Convertible Senior Notes consisted of the following:
July 2, 2021April 2, 2021
(In millions)
New 2.00% Convertible Notes
New 2.50% Convertible Notes
New 2.00% Convertible Notes
Liability components:
Principal$625 $250 $625 
Unamortized discount and issuance costs(4)— (5)
Net carrying amount$621 $250 $620 
Equity component net of tax$56 $43 $56 
Based on the closing price of our common stock of $27.20 on July 2, 2021, the if-converted value of the New 2.0% Convertible Notes exceeded the principal amount by approximately $208 million.
The following table sets forth total interest expense recognized related to our Convertible Senior Notes:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Contractual interest expense$3 $6 
Amortization of debt discount and issuance costs$1 $1 
Payments in lieu of conversion price adjustments (1)
$2 $2 
(1) Payments in lieu of conversion price adjustments consist of amounts paid to holders of the Convertible Senior Notes when our quarterly dividend to our common stockholders exceeds the amounts defined in the Convertible Senior Notes agreements.
Credit facility
On November 4, 2019, we entered into a credit agreement with financial institutions, which provides a revolving line of credit of $1 billion, a 5-year term loan of $500 million (the Initial Term Loan) and a delayed draw 5-year term loan commitment of $750 million (the Delayed Draw Term Loan). On September 14, 2020, we drew $750 million on the Delayed Draw Term Loan.
On May 7, 2021, we entered into the first amendment to the credit agreement with financial institutions (the First Amendment), which extended the maturity of all term loans and revolver credit facilities from November 2024 to May 2026. The First Amendment also provided for an incremental increase under the Initial Term Loan of $525 million. This transaction was accounted for as a debt extinguishment of the Initial Term Loan and resulted in accelerated recognition of interest expense for unamortized debt issuance costs, which was immaterial. At the closing of the First Amendment, we did not borrow any funds under the revolving line of credit and fully borrowed the First Amendment under the Initial Term Loan, such that loans in an aggregate principal amount of $1,741 million were outstanding. The credit facilities remain senior secured.
The principal amount of the Initial Term Loan and the additional borrowings under the First Amendment must be repaid in quarterly installments on the last business day of each calendar quarter commencing with the quarter ended September 30, 2022 in an amount equal to 1.25% of the aggregate principal amount, as of the date of the first amendment. The principal amount of the Delayed Draw Term Loan must be repaid in quarterly installments on the last business day of each calendar quarter commencing with the later of (i) the quarter ended March 31, 2021 and (ii) the first full fiscal quarter ended following the Borrowing of the Delayed Draw Term Loans in an amount equal to 1.25% of aggregate principal amount that are outstanding immediately after the borrowing of the Delayed Draw Term Loan. We may voluntarily repay outstanding principal balances without penalty. As of July 2, 2021, there were no borrowings outstanding under our revolving credit facilities.
Interest on borrowings under the credit agreement can be based on a base rate or the LIBOR at our election. Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the credit agreement, loans borrowed bear interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus a margin ranging from 0.125% to 0.75%, and in the case of LIBOR loans, LIBOR, as adjusted for statutory reserves, plus a margin ranging from 1.125% to 1.75%. The unused revolving line of credit is subject to a commitment fee ranging from 0.125% to 0.30% per annum.
Debt covenant compliance
The credit agreement contains customary representations and warranties, non-financial covenants for financial reporting, affirmative and negative covenants, including a covenant that we maintain a consolidated leverage ratio of not more than 5.25 to 1.0, or 5.75 to 1.0 if we acquire assets or business in an aggregate amount greater than $250 million, and restrictions on indebtedness, liens, investments, stock repurchases, and dividends (with exceptions permitting our regular quarterly dividend and other specific capital returns). As of July 2, 2021, we were in compliance with all debt covenants.