(4)

Debt

The Company issues debt in various currencies with both floating and fixed interest rates. Outstanding debt, weighted average contractual interest rates and range of contractual interest rates were as follows:

					Weighted average						Contractual
					contractual interest rate						interest rate ranges
	December 31,		March 31,		December 31,			March 31,			December 31,	March 31,
	2015		2015		2015			2015			2015	2015
	(U.S. dollars in millions)
Unsecured debt:
Commercial paper	$	5,048	$	4,587		0.41	%		0.37	%	0.25 - 0.86%	0.15 - 1.33%
Related party debt		2,051		3,492		0.65	%		0.61	%	0.27 - 0.86%	0.16 - 1.30%
Bank loans		7,247		7,292		0.97	%		0.84	%	0.73 - 1.57%	0.61 - 1.73%
Private MTN program		5,442		7,458		2.75	%		2.45	%	0.78 - 7.63%	0.64 - 7.63%
Public MTN program		14,173		10,938		1.35	%		1.09	%	0.28 - 2.63%	0.25 - 2.25%
Euro MTN programme		1,339		1,866		1.58	%		1.30	%	0.82 - 2.23%	0.15 - 2.23%
Other debt		1,334		1,691		1.80	%		1.85	%	1.13 - 2.35%	1.40 - 2.35%
Total unsecured debt		36,634		37,324
Secured debt		7,483		7,365		0.97	%		0.74	%	0.48 - 1.56%	0.19 - 1.46%
Total debt	$	44,117	$	44,689

As of December 31, 2015, the outstanding principal balance of long-term debt with floating interest rates totaled $14.3 billion and long-term debt with fixed interest rates totaled $22.1 billion. As of March 31, 2015, the outstanding principal balance of long-term debt with floating interest rates totaled $12.6 billion and long-term debt with fixed interest rates totaled $21.0 billion.

Commercial Paper

As of December 31, 2015 and March 31, 2015, the Company had commercial paper programs that provide the Company with available funds of up to $8.4 billion and $8.6 billion, respectively, at prevailing market interest rates for periods up to one year. The commercial paper programs are supported by the Keep Well Agreements with HMC described in Note 6.

Outstanding commercial paper averaged $5.2 billion and $5.8 billion during the nine months ended December 31, 2015 and 2014, respectively. The maximum balance outstanding at any month-end during the nine months ended December 31, 2015 and 2014 was $5.9 billion and $6.7 billion, respectively.

Related Party Debt

AHFC routinely issues fixed rate short-term notes to AHM to help fund AHFC’s general corporate operations. The Company incurred interest expense on these notes totaling $0.5 million and $1 million for the three months ended December 31, 2015 and 2014, respectively, and $2 million and $3 million for the nine months ended December 31, 2015 and 2014, respectively.

HCFI routinely issues fixed rate short-term notes to HCI to help fund HCFI’s general corporate operations. The Company incurred interest expense on these notes totaling $3 million and $6 million for the three months ended December 31, 2015 and 2014, respectively, and $10 million and $17 million for the nine months ended December 31, 2015 and 2014, respectively.

Bank Loans

Outstanding bank loans as of December 31, 2015 had floating interest rates. Outstanding bank loans have prepayment options. No outstanding bank loans as of December 31, 2015 were supported by the Keep Well Agreements with HMC described in Note 6.

Medium Term Note (MTN) Programs

Private MTN Program

AHFC no longer issues MTNs under the Rule 144A Private MTN Program. Notes outstanding under the Private MTN Program as of December 31, 2015 were long-term, with either fixed or floating interest rates, and denominated in U.S. dollars.

Public MTN Program

In August 2015, AHFC increased the authorized maximum aggregate principal amount for issuance under the Public MTN Program from $16.0 billion to $30.0 billion. The aggregate principal amount of MTNs offered under this program may be increased from time to time. Notes outstanding under this program as of December 31, 2015 were both short-term and long-term, with either fixed or floating interest rates, and denominated in U.S. dollars, Euros and Sterling.

Euro MTN Programme

The Euro MTN Programme was retired in August 2014. Notes under this program that are currently listed on the Luxembourg Stock Exchange will remain listed through their maturities. Notes outstanding under this program as of December 31, 2015 were long-term, with either fixed or floating interest rates, and denominated in U.S. dollars, Japanese Yen, or Euros.

The MTN programs are supported by the Keep Well Agreement with HMC described in Note 6.

Other Debt

The outstanding balances as of December 31, 2015 consisted of private placement debt issued by HCFI, denominated in Canadian dollars, with either fixed or floating interest rates. Private placement debt is supported by the Keep Well Agreement with HMC described in Note 6.

Secured Debt

The Company issues notes through secured financing transactions that are secured by assets held by the issuing securitization trust. The notes generally have fixed interest rates (a limited number of notes had floating interest rates). Repayment on the notes is dependent on the performance of the underlying receivables. Refer to Note 9 for additional information on the Company’s secured financing transactions.

Credit Agreements

Syndicated Bank Credit Facilities

AHFC maintains a $3.5 billion 364 day credit agreement, as amended, which expires on March 4, 2016, and a $3.5 billion five year credit agreement, as amended, which expires on March 7, 2020. At December 31, 2015, no amounts were outstanding or repaid under the AHFC credit agreements. AHFC intends to renew or replace the credit agreements prior to or on their respective expiration dates.

HCFI maintains a $1.2 billion credit agreement, as amended, which provides that HCFI may borrow up to $578 million on a one year and a five-year revolving basis. The one year tranche of the credit agreement expires on March 24, 2016 and the five year tranche of the credit agreement expires on March 24, 2020. At December 31, 2015, no amounts were outstanding or repaid under the HCFI credit agreement. HCFI intends to renew or replace the credit agreement prior to or on the expiration date of each respective tranche.

The credit agreements contain customary conditions to borrowing and customary restrictive covenants, including limitations on liens and limitations on mergers, consolidations and asset sales. The credit agreements also require AHFC and HCFI, respectively, to maintain a positive consolidated tangible net worth as defined in their respective credit agreements. The credit agreements, in addition to other customary events of default, include cross-default provisions and provisions for default if HMC does not maintain ownership, whether directly or indirectly, of at least 80% of the outstanding capital stock of AHFC or HCFI, as applicable. In addition, the AHFC and HCFI credit agreements contain provisions for default if HMC’s obligations under the HMC-AHFC Keep Well Agreement or the HMC-HCFI Keep Well Agreement, as applicable, become invalid, voidable, or unenforceable. All of these conditions, covenants and events of default are subject to important limitations and exceptions under the agreements governing the credit agreements. As of December 31, 2015, management believes that AHFC and HCFI were in compliance with all covenants contained in the respective credit agreements.

Other Credit Agreements

In September 2015, AHFC entered into other committed lines of credit to allow the Company access to an additional $1.0 billion in unsecured funding with multiple banks. The credit agreements contain customary conditions to borrowing and customary restrictive covenants, including limitations on liens and limitations on mergers, consolidations and asset sales and a requirement for AHFC to maintain a positive consolidated tangible net worth. There were no amounts outstanding as of December 31, 2015. These agreements expire in September 2016.