Borrowings



	As of December 31,
(in millions)	2016			2015
Short-term borrowings:
Foreign lines of credit and other arrangements	$	84		$	43
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50%	160			—
Unamortized deferred financing costs (a)	(2		)	—
Total short-term borrowings	242			43
Current portion of long-term borrowings:
8.75% Senior secured second lien notes due 2022	—			750
Unamortized discount and unamortized deferred financing costs (a)	—			(10		)
Other arrangements and capital lease obligations	116			73
Total current portion of long-term borrowings	116			813
Total short-term and current portion of long-term borrowings	358			856
Long-term borrowings:
Senior secured term loan facility due March 2018 at LIBOR and euro LIBOR plus 3.5% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.5%	—			4,938
Senior secured term loan facility due September 2018 at LIBOR plus 3.5% or a base rate plus 2.5%	—			1,008
Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 4.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 3.0%	—			1,171
Senior secured term loan facility due July 2022 at LIBOR and euro LIBOR plus 3.75% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.75%	—			2,464
Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0%	4,379			—
Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25%	3,583			—
6.75% Senior secured first lien notes due 2020	1,398			1,398
5.375% Senior secured first lien notes due 2023	1,210			1,210
5.0% Senior secured first lien notes due 2024	1,900			1,000
5.75% Senior secured second lien notes due 2024	2,200			2,200
7.0% Senior unsecured notes due 2023	3,400			3,400
Unamortized discount and unamortized deferred financing costs (a)	(154		)	(174		)
Other arrangements and capital lease obligations	215			122
Total long-term borrowings (b)	18,131			18,737
Total borrowings (c)	$	18,489		$	19,593

(a)

Unamortized deferred financing costs are amortized on a straight-line basis, which approximates the interest method, over the remaining term of the respective debt. In addition, certain lenders' fees associated with debt transactions were capitalized as discounts and are similarly being amortized on a straight-line basis, which approximates the effective interest method, over the remaining term of the respective debt.


(b)	As of December 31, 2016 and 2015, the fair value of the Company's long-term borrowings was $18.8 billion and $19.6 billion, respectively. The estimated fair value of the Company's long-term borrowings was primarily based on market trading prices and is considered to be a Level 2 measurement.


(c)	The effective interest rate is not substantially different than the coupon rate on any of the Company's debt tranches.

Foreign Lines of Credit and Other Arrangements

As of December 31, 2016 and 2015, the Company had $489 million and $245 million, respectively, available under short-term lines of credit and other arrangements with foreign banks and alliance partners primarily to fund settlement activity. As of December 31, 2016 and 2015, this includes a $355 million and $75 million, respectively, committed line of credit for one of the Company's consolidated alliances. The remainder of these arrangements are primarily associated with international operations and are in various functional currencies, the most significant of which are the Australian dollar, the Polish zloty, and the euro. Of the amounts outstanding as of December 31, 2016 and 2015, $10 million and $17 million, respectively, were uncommitted. The weighted average interest rate associated with foreign lines of credit was 2.6% and 2.6% for the years ended December 31, 2016 and 2015, respectively.

Senior Secured Revolving Credit Facility

The Company has a $1.25 billion senior secured revolving credit facility maturing on June 2, 2020 subject to certain earlier springing maturity provisions in certain circumstances. Up to $250 million of the senior secured revolving credit facility is available for letters of credit, of which $41 million and $42 million of letters of credit were issued under the facilities as of December 31, 2016 and 2015, respectively. As of December 31, 2016, $1.2 billion remained available.

Interest on the senior secured revolving credit facility is payable at a rate equal to, at Company’s option, either (a) LIBOR for deposits in the applicable currency plus 350 basis points or (b) solely with respect to revolving loans denominated in U.S. dollars, a base rate plus 250 basis points. The weighted-average interest rate on these facilities was 4.60% for the years ended December 31, 2016 and 2015, respectively. The commitment fee rate for the unused portion of the facility is 0.50% per year, though it may be reduced by the Company's leverage ratio.

Senior Secured Term Loan Facility

As of December 31, 2016, the Company held interest rate collar contracts to mitigate exposure to variability in interest payments on the outstanding variable rate senior secured term loans. Refer to note 13 "Derivative Financial Instruments" of these consolidated financial statements for a discussion of the Company’s derivatives.

The original terms of the Company’s senior secured term loan facilities required the Company to pay equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount. However, in conjunction with debt modifications and amendments over the last several years, proceeds from the issuance of the notes were used to prepay portions of the principal balances of the Company’s senior secured term loans which satisfied the future quarterly principal payments. Therefore, the Company made no scheduled principal payments during 2016 or 2015.

The senior secured term loan facilities also require mandatory prepayments based on a percentage of excess cash flow generated by the Company if the Company does not satisfy the leverage ratio. All obligations under the senior secured loan facilities are fully and unconditionally guaranteed by most of the domestic, wholly owned material subsidiaries of the Company, subject to certain exceptions.

The Company has amounts outstanding under its senior secured term loan facilities under separate tranches as described below. A portion of each tranche is denominated in euro. Interest is payable based upon LIBOR or euro LIBOR plus an applicable margin.

On January 1, 2016, the Company designated the euro-denominated portions of the Senior secured term loan facilities as non-derivative hedges of net investments in foreign operations. As such, foreign currency gains and losses on the euro-denominated portions of these terms loans is recorded within "Foreign currency translation adjustment" on the Company's consolidated statements of comprehensive income (loss) to the extent the hedges are effective. Foreign currency gains and losses on the euro-denominated portions of these term loans were previously recorded within "Other income" on the Company's consolidated statements of operations. As of December 31, 2016, approximately $1 billion in euro-denominated senior secured term loan facilities were designated.

8.75% Senior Secured Second Lien Notes

On January 15, 2016, the Company redeemed its remaining outstanding 8.75% senior secured second lien notes due 2022. Associated with the redemption, the Company incurred $43 million in loss on debt extinguishment.

Senior Secured Term Loan Facility Due March 2018 and September 2018

On April 13, 2016, the Company refinanced its U.S. dollar-denominated senior secured term loan due March 2018 through new and existing lenders to provide approximately $3.7 billion of U.S. dollar-denominated senior secured term loans due March 2021. The senior secured term loan due March 2021 bore interest at a rate of LIBOR plus 400 basis points or a base rate plus 300 basis points. In connection with this transaction, the Company recorded approximately $5 million in loss on debt extinguishment and expensed approximately $11 million in debt issuance costs on modified debt, which is included within "Interest expense, net" on the consolidated statements of operations.

On June 2, 2016, the Company refinanced its senior secured term loan due September 2018 and euro-denominated senior secured term loan due March 2018 through new and existing lenders to provide approximately $1.0 billion and €311 million ($342 million equivalent), respectively, of senior secured term loans due July 2022. The senior secured term loans due July 2022 bore interest at a rate of LIBOR plus 375 basis points or, solely with respect to the U.S. dollar denominated term loans, a base rate plus 275 basis points. In connection with this transaction, the Company recorded approximately $4 million in loss on debt extinguishment and expensed $4 million in debt issuance costs on modified debt, which is included within "Interest expense, net" on the consolidated statements of operations. The euro-denominated senior secured term loan facility remains designated as a non-derivative hedge of net investment in foreign operations.

Subsequent to the April 13, 2016 and June 2, 2016 debt transactions, the Company entered into additional amendments to its senior secured term loan facilities as discussed below.

Senior Secured Term Loan Facility Due March 2021 and July 2022

On October 14, 2016, the Company entered into an amendment of its senior secured credit facilities providing for an additional $4.27 billion in U.S. dollar-denominated term loans and €154 million in euro denominated term loans maturing in March 2021. The senior secured term loan due March 2021 bears interest at a rate of LIBOR plus 300 basis points or, solely with respect to the U.S. dollar denominated term loan, a base rate plus 200 basis points. The Company used proceeds from the issuance of the March 2021 Term Loan to refinance all of its existing U.S dollar denominated term loans and euro denominated term loans maturing in March 2021. In connection with this transaction, the Company recorded approximately $6 million in loss on debt extinguishment and expensed approximately $6 million in debt issuance costs on modified debt, which is included within "Interest Expense, net" on the consolidated statements of operations.

On December 5, 2016, the Company entered into an amendment of its senior secured credit facilities providing for an additional $2.78 billion in U.S. dollar-denominated term loans and €761 million in euro-denominated term loans maturing in July 2022. The senior secured term loan facility due July 2022 bears interest at LIBOR plus 3.0% or a base rate plus 2.0%, solely with respect to U.S. dollar-denominated term loans. The Senior secured term loan facility due July 2022 bears interest at euro LIBOR plus 3.25%, solely with respect to euro-denominated term loans. The July 2022 term loans have a step down provision which lowers the interest rate by 25 basis points should the Company’s Covenant EBITDA ratio fall below 3.5. For additional information on the Company's Covenant EBITDA calculation see Item 7 “Covenant compliance” within this Form 10-K. In connection with this transaction, the Company recorded approximately $3 million in loss on debt extinguishment and expensed approximately $4 million in debt issuance costs on modified debt, which is included within "Interest Expense, net" on the consolidated statements of operations.

For the year ended December 31, 2016, the Company made approximately $700 million in principal payments on its 2021 and 2022 senior secured term loan facilities. In connection with the transactions, the Company recorded $6 million in loss on debt extinguishment.

6.75% Senior Secured First Lien Notes

The Company's 6.75% senior secured first lien notes due November 1, 2020 require the payment of interest semi-annually on May 1 and November 1 of each year. The Company may redeem the notes, in whole or in part, at established redemption prices.

For information on the subsequent paydown of the 6.75% notes, see note 20 "Subsequent Events" of these consolidated financial statements.

5.375% Senior Secured First Lien Notes

On August 11, 2015, the Company issued approximately $1.2 billion aggregate principal amount of 5.375% senior secured first lien notes due August 15, 2023. Interest on the notes will be payable semi-annually in cash on February 15 and August 15 of each year, commencing on February 15, 2016.

The Company may redeem the notes, in whole or in part, prior to August 15, 2018 at a price equal to 100% of the notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole premium". Thereafter, the Company may redeem the notes, in whole or in part, at established redemption prices.

5.0% Senior Secured First Lien Notes

On March 29, 2016, the Company issued $900 million aggregate principal amount of 5.0% senior secured first lien notes due 2024 (the "additional" notes). The Company used the net proceeds from the issue and sale of the additional notes to repay a portion of its U.S. dollar-denominated senior secured term loan facility due March 2018 and to pay related fees and expenses. Associated with the partial redemption of the U.S. dollar-denominated senior secured term loan facility, the Company recorded $3 million in loss on debt extinguishment and expensed approximately $3 million in debt issuance costs on modified debt, which is included within "Interest expense, net" in the consolidated statements of operations.

The Company may redeem the notes, in whole or in part, prior to January 15, 2019 at a price equal to 100% of the notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole premium". Thereafter, the Company may redeem the notes, in whole or in part, at established redemption prices.

5.75% Senior Secured Second Lien Notes

On November 25, 2015, the Company issued $2.2 billion aggregate principal amount of 5.75% senior secured second lien notes due January 15, 2024. Interest on the notes is payable semi-annually in cash on January 15 and July 15 of each year. The Company used the proceeds from the offering together with proceeds from the November 25, 2015 offering of its 5.0% senior secured first lien notes to redeem $250 million of its outstanding 8.75% senior secured second lien notes due 2022 and all outstanding 8.25% second lien notes due 2021 and pay related fees and expenses.

7.0% Senior Unsecured Notes Due 2023

On November 18, 2015, the Company issued $3.4 billion aggregate principal amount of 7.0% senior unsecured notes due December 1, 2023. Interest on the notes is payable semi-annually in cash on June 1 and December 1 of each year.

The Company may redeem the notes, in whole or in part, prior to December 1, 2018 at a price equal to 100% of the notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole premium". Thereafter, the Company may redeem the notes, in whole or in part, at established redemption prices.

Accounts receivable securitization agreement

The Company has a fully consolidated and wholly owned subsidiary, First Data Receivables, LLC (FDR). FDR and FDC entered into an agreement where certain wholly owned subsidiaries of FDC agreed to transfer and contribute receivables to FDR. FDR’s assets are not available to satisfy obligations of any other entities or affiliates of FDC. FDR's creditors will be entitled, upon its liquidation, to be satisfied out of FDR’s assets prior to any assets or value in FDR becoming available to FDR’s equity holders. As of December 31, 2016, the Company transferred $312 million in receivables to FDR as part of the securitization program and FDR utilized the receivables as collateral in borrowings of $160 million. As of December 31, 2016, the receivables held by FDR are recorded within “Accounts receivable, net” in the Company's consolidated balance sheets.

The weighted-average interest rate on the securitization facility was 2.49% for the year ended December 31, 2016.

Maturities

The following table presents the future aggregate annual maturities of long-term debt excluding unamortized discounts and deferred financing cost:



Year ended December 31, (in millions)	Par Amount
2017	$	116
2018	89
2019	60
2020	1,443
2021	4,390
Thereafter	12,303
Total	$	18,401

Guarantees and Covenants

All obligations under the senior secured revolving credit facility and senior secured term loan facilities are unconditionally guaranteed by most of the existing and future, direct and indirect, wholly owned, material domestic subsidiaries of the Company. The senior secured facilities contain a number of covenants that, among other things, restrict the Company’s ability to incur additional indebtedness; create liens; enter into sale and leaseback transactions; engage in mergers or consolidations; sell or transfer assets; pay dividends and distributions or repurchase the Company’s capital stock; make investments, loans or advances; prepay certain indebtedness; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing certain indebtedness; and change its lines of business. The senior secured facilities also require the Company to not exceed a maximum senior secured leverage ratio and contain certain customary affirmative covenants and events of default, including a change of control. The senior secured term loan facilities also require mandatory prepayments based on a percentage of excess cash flow generated by the Company. The Company is in compliance with all applicable covenants.

All senior secured notes are guaranteed on a senior secured basis by each of the Company’s existing and future direct and indirect wholly owned domestic subsidiaries that guarantees the Company’s senior secured credit facilities. Each of the guarantees of the notes is a general senior obligation of each guarantor and rank senior in right of payment to all existing and future subordinated indebtedness of the guarantor subsidiary, including the Company’s existing senior subordinated notes. The notes rank equal in right of payment with all existing and future senior indebtedness of the guarantor subsidiary but are effectively senior to the guarantees of the Company’s existing senior unsecured notes and the Company’s existing senior secured second lien notes to the extent of the Company’s and the guarantor subsidiary’s value of the collateral securing the notes. The 6.75% senior secured first lien notes, 5.375% senior secured first lien notes, and 5.0% senior secured first lien notes are effectively equal in right of payment with each other and the guarantees of the Company’s senior secured credit facilities. Each series of notes are effectively subordinated to any obligations secured by liens permitted under the indenture for the particular series of notes and structurally subordinated to any existing and future indebtedness and other liabilities of any subsidiary of a guarantor that is not also a guarantor of the notes.

All senior unsecured notes (i) rank senior in right of payment to all of the Company’s existing and future subordinated indebtedness, (ii) rank equally in right of payment to all of the existing and future senior indebtedness, (iii) are effectively subordinated in right of payment to all existing and future secured debt to the extent of the value of the assets securing such debt, and (iv) are structurally subordinated to all obligations of each subsidiary that is not a guarantor of the senior notes.

The notes are similarly guaranteed in accordance with their terms by each of the Company’s domestic subsidiaries that guarantee obligations under the Company’s senior secured term loan facility described in more detail in note 19 "Supplemental Guarantor Condensed Consolidating Financial Statements" of these consolidated financial statements.

All obligations under the senior secured first lien notes, senior secured second lien notes, and senior unsecured notes also contain a number of covenants similar to those described for the senior secured obligations noted above. The Company is in compliance with all applicable covenants.