DEBT AND OTHER FINANCING ARRANGEMENTS

12 Months Ended

Jun. 29, 2019

Sysco’s debt consists of the following:



	Jun. 29, 2019			Jun. 30, 2018
	(In thousands)
Commercial paper, interest at 2.56% as of June 29, 2019	$	132,081		$	—
Senior notes, interest at 1.90%, maturing in fiscal 2019 ⁽¹⁾	—			491,700
Senior notes, interest at 5.375%, maturing in fiscal 2019 ⁽¹⁾	—			249,701
Senior notes, interest at 2.60%, maturing in fiscal 2021 ⁽¹⁾	744,034			724,047
Senior notes, interest at 2.50%, maturing in fiscal 2022 ⁽¹⁾	494,814			477,411
Senior notes, interest at 2.60%, maturing in fiscal 2022 ⁽¹⁾	447,509			446,681
Senior notes, interest at 1.25%, maturing in fiscal 2023 ⁽¹⁾	576,771			580,196
Senior notes, interest at 3.55%, maturing in fiscal 2025 ⁽¹⁾	521,490			492,606
Senior notes, interest at 3.65%, maturing in fiscal 2025 ⁽¹⁾	379,658			—
Senior notes, interest at 3.75%, maturing in fiscal 2026 ⁽¹⁾	747,330			746,879
Senior notes, interest at 3.30%, maturing in fiscal 2027 ⁽¹⁾	993,084			992,176
Debentures, interest at 7.16%, maturing in fiscal 2027 ⁽²⁾	44,272			44,276
Senior notes, interest at 3.25%, maturing in fiscal 2028 ⁽¹⁾	743,304			742,555
Debentures, interest at 6.50%, maturing in fiscal 2029 ⁽²⁾	162,150			162,276
Senior notes, interest at 5.375%, maturing in fiscal 2036 ⁽¹⁾	382,250			382,010
Senior notes, interest at 6.625%, maturing in fiscal 2039 ⁽¹⁾	199,198			201,766
Senior notes, interest at 4.85%, maturing in fiscal 2046 ⁽¹⁾	495,860			495,709
Senior notes, interest at 4.50%, maturing in fiscal 2046 ⁽¹⁾	494,215			494,090
Senior notes, interest at 4.45%, maturing in fiscal 2048 ⁽¹⁾	492,579			493,165
Notes payable, capital leases, and other debt, interest averaging 4.99% and maturing at various dates to fiscal 2031 as of June 29, 2019 and 6.33% and maturing at various dates to fiscal 2026 as of June 30, 2018	112,738			110,026
Total debt	8,163,337			8,327,270
Less current maturities of long-term debt	(37,322		)	(782,329		)
Less notes payable	(3,957		)	(4,176		)
Net long-term debt	$	8,122,058		$	7,540,765


⁽¹⁾	Represents senior notes that are unsecured, are not subject to any sinking fund requirement and include a redemption provision that allows Sysco to retire the debentures and notes at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture and note holders are not penalized by the early redemption.


⁽²⁾	This debenture is not subject to any sinking fund requirement and is no longer redeemable prior to maturity.

As of June 29, 2019, the principal payments required to be made during the next five fiscal years on long-term debt, excluding notes payable and commercial paper, are shown below:



	Amount
	(In thousands)
2020	$	35,197
2021	775,518
2022	967,931
2023	581,225
2024	8,352

In June 2019, the company’s then-current long-term revolving credit facility was terminated and a new facility in the amount of $2.0 billion was established. The new facility expires on June 28, 2024, subject to extension. As of June 29, 2019, there were no amounts outstanding under this facility.

Sysco has a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed $2 billion. As of June 29, 2019, there were $132.1 million in commercial paper issuances outstanding. Any outstanding amounts are classified within long-term debt, as the program is supported by a long-term revolving credit facility. During the first 52 weeks of 2019, aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from zero to approximately $1.1 billion.

Senior notes offering

On September 25, 2018, Sysco’s wholly owned subsidiary, Sysco Canada Inc. (Sysco Canada), issued senior notes totaling CDN $500.0 million. The senior notes were issued in Canada with a coupon rate of 3.65% and pricing, as a percentage of par, of 99.962%. Net proceeds from the offering were used to repay internal debt that was created in fiscal 2018 when the company repatriated earnings from its Canadian operations back to Sysco Corporation, and to repay outstanding borrowings under Sysco’s commercial paper program, along with other general corporate purposes. Interest on the senior notes will be paid semi-annually on April 25 and October 25, and began on April 25, 2019. At Sysco Canada’s option, any or all of the senior notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco Canada elects to redeem the senior notes before the date that is two months prior to the maturity date, Sysco Canada will pay an amount equal to the greater of (1) 100% of the principal amount of the senior notes to be redeemed; or (2) the applicable yield price, plus, in either case, any accrued and unpaid interest on the senior notes to be redeemed to the date of redemption. If Sysco Canada elects to redeem a series of senior notes on or after the applicable date described in the preceding sentence, Sysco Canada will pay an amount equal to 100% of the principal amount of the senior notes to be redeemed plus accrued and unpaid interest on the senior notes redeemed to the redemption date.

Senior notes and debentures redemption related to the tender offer

Sysco used a portion of the net proceeds of its March 2018 senior notes offering to fund the fiscal 2018 purchase, pursuant to a tender offer, of $230.5 million in combined aggregate principal amount of the following securities: its 7.160% debentures due 2027, its 6.500% debentures due 2028, its 5.375% senior notes due 2035 and its 6.625% senior notes due 2039. Holders of securities received an early tender payment of $50 per $1,000 principal amount of securities. Holders of such securities also received accrued and unpaid interest from, and including, the last interest payment date for their tendered securities, but not including, the early settlement date, which was March 23, 2018. The tender offer transaction was considered to be a debt extinguishment. As such, Sysco recognized a loss on extinguishment of $53.1 million in fiscal 2018, which was recorded as a component of interest expense in the accompanying consolidated results of operations. Of this loss, $51.2 million was attributable to the purchase premium paid to the lenders, $1.1 million was attributable to the write-off of unamortized debt issuance costs associated with the redeemed debentures and notes, and $0.8 million was attributable to an accelerated charge on the debt discount related to these debentures and notes.

In April 2019, Sysco repaid 1.90% senior notes totaling $500.0 million at maturity utilizing a combination of cash flow from operations and commercial paper issuances.

In March 2019, Sysco repaid 5.375% senior notes totaling $250.0 million at maturity utilizing a combination of cash flow from operations and commercial paper issuances.

As of June 29, 2019 and June 30, 2018, letters of credit outstanding were $226.0 million and $221.7 million, respectively.