NOTE 15 – LONG-TERM DEBT

Long-term debt consisted of the following at September 30:


		2011					2010
		Balance		Interest			Balance		Interest
		Outstanding		Rate			Outstanding		Rate
Fixed Rate Senior Notes, Series B	$	-		n/a		$	29.0		4.24	%
Fixed Rate Senior Notes, Series C		50.0		5.43	%		50.0		5.43	%
Fixed Rate Senior Notes, Series D		32.1		4.76	%		42.9		4.76	%
Fixed Rate Senior Notes, Series E		100.0		5.57	%		100.0		5.57	%
Fixed Rate Senior Notes, Series F		75.0		5.43	%		75.0		5.43	%
Fixed Rate Senior Notes, Series I-1		75.0		5.56	%		75.0		5.56	%
Fixed Rate Senior Notes, Series I-2		25.0		5.58	%		25.0		5.58	%
Fixed Rate Senior Notes, Series J		100.0		5.93	%		100.0		5.93	%
Fixed Rate Senior Notes maturing 2018		577.5		7.29	%		577.5		7.29	%
Floating Rate Senior Notes maturing 2018		20.0		2.80	%		20.0		2.98	%
Fixed Rate Senior Notes maturing 2020		67.0		7.39	%		67.0		7.39	%
4.95% Senior Notes maturing 2020		300.0		4.95	%		300.0		4.95	%
Fixed Rate Senior Notes maturing 2039		450.0		6.63	%		450.0		6.63	%
Fixed Rate Senior Notes, Series 2009A		50.0		7.45	%		50.0		7.45	%
Fixed Rate Senior Notes, Series 2009B		50.0		7.60	%		50.0		7.60	%
2008 Revolving Credit Agreement		-		n/a			123.4		1.30	%
2010 Revolving Credit Agreement		19.9		2.62	%		300.0		2.81	%
2010 Term Loan		190.0		2.75	%		200.0		2.81	%
Other		-		n/a			.1		Various
	$	2,181.5				$	2,634.9
Plus: Unamortized premium (discount), net		3.1					3.2
Plus: Unamortized adjustment related
to interest rate fair value hedge		18.6					-
Less: Current portion		(30.7	)				(173.2	)
	$	2,172.5				$	2,464.9

On December 22, 2003, the Company issued Fixed Rate Senior Notes, Series B, Series C, and Series D. Series B comprises $145.0 of 4.24% notes due December 2010 with annual amortization of principal beginning December 2006. Series C comprises $50.0 of 5.43% notes with bullet maturity in December 2013. Series D comprises $75.0 of 4.76% notes due December 2013 with annual amortization of principal beginning in December 2007.

On December 21, 2005, the Company issued Fixed Rate Senior Notes, Series E and Series F, totaling $175.0. Series E comprises $100.0 of 5.57% notes due in 2015. Series F consists of $75.0 of 5.43% notes with maturity in 2012.

On January 18, 2007, the Company issued Fixed Rate Senior Notes, Series I, totaling $100.0 in two tranches: $75.0 at 5.56% and $25.0 at 5.58%. One third of each tranche must be repaid on January 18, 2015, 2017, and 2019. On May 11, 2007, the Company issued Fixed Rate Senior Notes, Series J, comprised of $100.0 of 5.93% notes due in 2022.

On August 4, 2008, the Company assumed ownership of the Fixed Rate Notes maturing 2018, the Floating Rate Notes maturing 2018, and the Fixed Rate Notes maturing 2020, totaling $964.5 in conjunction with the acquisition of Post Foods. The 2018 Fixed Rate Notes comprises $577.5 of 7.29% notes due August 15, 2018. In fiscal 2011, an $18.8 gain on an interest rate swap designated as a fair value hedge of the 2018 Fixed Rate Notes

was recorded as an increase in the carrying value of the debt and is being amortized to reduce interest expense over the remaining term. The 2018 Floating Rate Notes total $20.0 and incur interest at a rate of 3-month LIBOR plus 2.54%, adjusted quarterly, and mature on August 15, 2018. The 2020 Fixed Rate Notes comprises $67.0 of 7.39% notes due August 15, 2020.

On May 28, 2009, the Company issued Fixed Rate Senior Notes, Series 2009A and Series 2009B, totaling $100.0. Series 2009A comprises $50.0 of 7.45% notes due in May 2019. Series 2009B comprises $50.0 of 7.60% notes due in May 2021.

The above note agreements are unsecured but contain certain representations, warranties, covenants, and conditions customary to agreements of this nature. The covenants include requirements that "Total Debt" not exceed 3.5 times "Adjusted EBITDA" and that "Consolidated Adjusted Net Worth" remain above a certain minimum amount (each term as defined in the note agreements). However, if the Company elects to pay additional interest, its ratio of "Total Debt" to "Adjusted EBITDA" may exceed the 3.5 to 1 limit, but be no greater than 4 to 1, for a period not to exceed 12 consecutive months. If these covenants are violated and cannot be remedied within the 30 days allowed, the noteholders may choose to declare any outstanding notes to be immediately due and payable.

On July 18, 2008, the Company entered into a three-year $400 revolving credit agreement. Borrowings under the agreement incurred interest at the Company's choice of either (1) LIBOR plus the applicable margin rate (currently 1.50%) or (2) the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, and (c) the "Base CD Rate" plus 1%. Such borrowings are unsecured and mature on July 18, 2011. The credit agreement called for a commitment fee calculated as a percentage (currently 0.25%) of the unused portion. The agreement terminated as scheduled on July 18, 2011.

On July 27, 2010, the Company entered into a credit agreement consisting of a $300 revolving credit facility and a $200 term loan. Borrowings under the agreement incur interest at the Company's choice of either (1) LIBOR plus the applicable margin rate (currently 2.50%) or (2) the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, (c) the "Adjusted LIBOR Rate" plus 1%. Such borrowings are unsecured and mature on July 27, 2015. The credit agreement calls for a commitment fee calculated as a percentage (currently 0.35%) of the unused portion, and contains certain representations, warranties, covenants, and conditions customary to credit facilities of this nature. The covenants include requirements that "EBIT" be at least three times "Consolidated Interest Expense", and that "Total Debt", not exceed 3.75 times "Adjusted EBITDA" (each term as defined in the agreement).

On August 14, 2009, the Company issued $300.0 aggregate principal amount of its 6.625% Senior Notes maturing 2039. The notes were priced at 99.702% of par value (before initial purchasers' discount). The net proceeds from the offering were used to refinance certain indebtedness and for general corporate purposes. In connection with the sale of the notes, on May 5, 2010 Ralcorp completed its offer to exchange the notes issued in the offering for publicly tradable notes having substantially identical terms except that provisions relating to transfer restrictions, registration rights, and additional interest do not apply to the publicly tradable notes.

On July 26, 2010, the Company reopened its 6.625% Senior Notes maturing 2039 and issued an additional $150.0 of the notes, raising the aggregate principal amount of the notes outstanding to $450.0. The new notes were priced at 102.439% of par value (before initial purchaser's discount) plus accrued interest from February 15, 2010, resulting in an imputed interest rate of 6.47%. The net proceeds from this public offering were used to fund, in part, the acquisition of American Italian Pasta Company.

On July 26, 2010, the Company issued $300.0 aggregate principal amount of its 4.95% Senior Notes maturing 2020. The notes were priced at 99.84% of par value (before initial purchaser's discount), resulting in an imputed interest rate of 4.96%. The net proceeds from this public offering were used to fund, in part, the acquisition of American Italian Pasta Company.

As of September 30, 2011 and 2010, the Company had $24.6 and $23.8, respectively, in letters of credit and surety bonds outstanding with various financial institutions, principally related to self-insurance requirements.

As of September 30, 2011, aggregate maturities of long-term debt are as follows: $30.7 in fiscal 2012, $105.7 in fiscal 2013, $90.7 in fiscal 2014, $173.2 in fiscal 2015, $100.0 in fiscal 2016, and $1,681.2 thereafter. As of September 30, 2011, management expects to reduce debt as scheduled over the next 12 months, so the current portion has been classified in "Other current liabilities" on the consolidated balance sheet.

The Company believes it is in compliance with all debt covenants.