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Debt
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
DEBT
DEBT
The table below summarizes the carrying amount and fair value of the Company’s publicly traded debt and non-publicly traded debt in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. The fair values of the Company’s publicly traded debt are based on quoted market prices. The fair values of the Company’s non-traded debt are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company’s publicly traded debt and non-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy.
(Thousands of dollars)
March 31, 2016
 
March 31, 2015
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Publicly traded debt
$
1,906,160

 
$
1,943,160

 
$
1,114,578

 
$
1,165,804

Non-traded debt
4,793

 
4,476

 
4,902

 
4,655


In March 2016, the Company entered into a $9.3 billion senior unsecured bridge term loan facility (Bridge Loan) as committed financing for the Valspar acquisition as disclosed in Note 17. No balances were drawn against this facility as of March 31, 2016. Debt issuance costs of $60.1 million related to this facility were incurred and recorded in Other current assets. Of this amount, $5.9 million was amortized and included in Interest expense for three months ended March 31, 2016.
In March 2016, in anticipation of a probable issuance of new long-term fixed rate debt within the next twelve months, the Company entered into a series of interest rate lock agreements (collectively, the interest rate locks) on a combined notional amount of $1.7 billion. The objective of the interest rate locks is to hedge the variability in the future semi-annual payments on the anticipated debt attributable to changes in the benchmark interest rate (U.S. Treasury) during the hedge periods. The future semi-annual interest payments are exposed to interest rate risk due to changes in the benchmark interest rate from the inception of the hedge to the time of issuance. The interest rate locks were evaluated for hedge accounting treatment and were designated as cash flow hedges. Therefore, the interest rate locks are recognized at fair value on the Consolidated Balance Sheet, and changes in fair value (to the extent effective) are recognized in Cumulative other comprehensive loss. Amounts recognized in Cumulative other comprehensive loss will be reclassified to Interest expense in periods following the settlement of the interest rate locks. The Company will evaluate hedge effectiveness each period until settlement. At March 31, 2016, an interest rate lock liability of $23.8 million was included in Other accruals, and the related pretax loss of $23.8 million was recognized in Cumulative other comprehensive loss.