Debt

The carrying values of the Company's borrowings were as follows (in millions):



Instrument	Date of issuance	Maturity date	Effective interest rate for the three months ended October 31, 2018	October 31, 2018			January 31, 2018
2021 Term Loan	May 2018	May 2021	3.01%	$	499		$	0
2023 Senior Notes	April 2018	April 2023	3.26%	992			0
2028 Senior Notes	April 2018	April 2028	3.70%	1,488			0
2019 Term Loan	July 2016	July 2019	3.01%	499			498
Loan assumed on 50 Fremont	February 2015	June 2023	3.75%	198			199
0.25% Convertible Senior Notes	March 2013	April 2018	2.53%(1)	0			1,023
Total carrying value of debt				3,676			1,720
Less current portion of debt				(503		)	(1,025		)
Total noncurrent debt				$	3,173		$	695

(1) From February 1, 2018 through maturity, the effective interest rate for the Convertible Senior Notes was 2.53%.

Each of the Company's debt agreements requires it to maintain compliance with certain debt covenants, all of which the Company was in compliance with as of October 31, 2018.

The expected future principal payments for all borrowings as of October 31, 2018 is as follows (in millions):



Fiscal period:
Remaining three months of Fiscal 2019	$	1
Fiscal 2020	504
Fiscal 2021	4
Fiscal 2022	504
Fiscal 2023	4
Thereafter	2,682
Total principal outstanding	$	3,699

2021 Term Loan

In April 2018, the Company entered into a new three-year unsecured term loan with Bank of America, N.A. and certain other institutional lenders for $500 million (“2021 Term Loan”) that matures in May 2021. The net proceeds of the 2021 Term Loan were for the purpose of partially funding the acquisition of MuleSoft and were received in May 2018. For the three and nine months ended October 31, 2018, total interest expense recognized was $3 million and $7 million, respectively. Accrued interest on the 2021 Term Loan was immaterial as of October 31, 2018. As of October 31, 2018, the noncurrent outstanding principal portion was $500 million.

2023 Senior Notes

In April 2018, the Company issued an aggregate principal amount of $1.0 billion in senior notes that will mature in April 2023 and bear interest at a fixed rate of 3.25 percent per annum ("2023 Senior Notes"). The interest is payable semi-annually in April and October of each year, commencing in October 2018. The Company incurred issuance costs of $8 million in connection with the 2023 Senior Notes that, along with the debt discount upon issuance, are being amortized to interest expense over the term of the 2023 Senior Notes. The 2023 Senior Notes are unsecured and rank equally in right of payment with all of the other senior unsecured indebtedness. For the three and nine months ended October 31, 2018, total interest expense recognized was $8 million and $18 million, respectively. Accrued interest on the 2023 Senior Notes was $2 million as of October 31, 2018. As of October 31, 2018, the noncurrent outstanding principal portion was $1.0 billion.

2028 Senior Notes

In April 2018, the Company issued an aggregate principal amount of $1.5 billion in senior notes that will mature in April 2028 and bear interest at a fixed rate of 3.70 percent per annum ("2028 Senior Notes"). The interest is payable semi-annually in April and October of each year, commencing in October 2018. The Company incurred issuance costs of $13 million in connection with the 2028 Senior Notes that, along with the debt discount upon issuance, are being amortized to interest expense over the term of the 2028 Senior Notes. The 2028 Senior Notes are unsecured and rank equally in right of payment with all of the other senior unsecured indebtedness. For the three and nine months ended October 31, 2018, total interest expense recognized was $14 million and $31 million, respectively. Accrued interest on the 2028 Senior Notes was $3 million as of October 31, 2018. As of October 31, 2018, the noncurrent outstanding principal portion was $1.5 billion.

Bridge Facility

In March 2018, the Company entered into a commitment letter, pursuant to which certain lenders agreed to provide a senior unsecured 364-day bridge loan facility of up to $3.0 billion (the "Bridge Facility”) for the purpose of providing the financing to support the Company's acquisition of MuleSoft.

Under the terms of the commitment letter, the Bridge Facility was terminated upon execution of the 2023 Senior Notes, 2028 Senior Notes and 2021 Term Loan in April 2018. For the nine months ended October 31, 2018, the Company incurred costs in connection with the Bridge Facility of approximately $11 million that were recorded to interest expense.

2019 Term Loan

In July 2016, the Company entered into a credit agreement (“Term Loan Credit Agreement”) with Bank of America, N.A. and certain other institutional lenders for a $500 million term loan facility (“2019 Term Loan”) that matures in July 2019. In April 2018, the Company modified the Term Loan Credit Agreement with substantially the same terms, including the principal amount and maturity date. The Company accounted for the new 2019 Term Loan as a modification. No incremental fees were paid related to the modification of the 2019 Term Loan.

Interest on the 2019 Term Loan is due and payable in arrears quarterly for loans bearing interest at a rate based on the base rate and at the end of an interest period in the case of loans bearing interest at the adjusted LIBOR rate.

For the three months ended October 31, 2018 and 2017, total interest expense recognized was $4 million and $3 million, respectively. For the nine months ended October 31, 2018 and 2017, total interest expense recognized was $11 million and $8 million, respectively. Accrued interest on the 2019 Term Loan was immaterial as of October 31, 2018. As of October 31, 2018, the current outstanding principal portion was $500 million.

Loan Assumed on 50 Fremont

The Company assumed a $200 million loan with the acquisition of 50 Fremont in San Francisco, California (“Loan”). The Loan bears an interest rate of 3.75% per annum and is due in June 2023. Starting in July 2018, principal and interest payments are required, with the remaining principal due at maturity. For the three months ended October 31, 2018 and 2017, total interest expense recognized was $2 million and $2 million, respectively. For the nine months ended October 31, 2018 and 2017, total interest expense recognized was $6 million and $6 million, respectively. Accrued interest on the Loan was immaterial as of October 31, 2018. As of October 31, 2018, the current and noncurrent outstanding principal portion was $4 million and $195 million, respectively. The Loan can be prepaid at any time subject to a yield maintenance fee.

Convertible Senior Notes

In March 2013, the Company issued at par value $1.15 billion of 0.25% convertible senior notes (the “0.25% Senior Notes”, or “Notes”) due in April 2018. The Notes matured in April 2018 and the Company repaid $1.0 billion in cash of principal balance of the Notes during the Company's first quarter of fiscal 2019. The Company also distributed approximately 7 million shares of the Company's common stock to noteholders during fiscal 2019, which represents the conversion value in excess of the principal amount.

To minimize the impact of potential economic dilution upon conversion of the Notes, also in March 2013, the Company entered into convertible note hedge transactions with respect to its common stock. The Company received approximately 7 million shares of the Company's common stock from the exercise of the notes hedges related to the 0.25% Senior Notes during this same period.

Warrants

In March 2013, the Company entered into a warrants transaction (“0.25% Warrants”), whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, shares of the Company’s common stock. The 0.25% Warrants were separate transactions entered into by the Company and were not part of the terms of the 0.25% Senior Notes or the related note hedges. In June 2018, the Company entered into agreements with each of the 0.25% Warrants counterparties to amend and early settle the 0.25% Warrants prior to their scheduled expiration beginning in July 2018. As a result of this amendment, during the Company's second quarter of fiscal 2019, the Company issued, in the aggregate, approximately 6 million shares to the counterparties to settle, via a net share settlement, the entirety of the 0.25% Warrants, which increased the shares used in computing basic net income per share by 3 million for the nine months ended October 31, 2018.

Revolving Credit Facility

In April 2018, the Company entered into a Second Amended and Restated Credit Agreement ("Revolving Loan Credit Agreement") with Wells Fargo Bank, National Association, and certain other institutional lenders that provides for $1.0 billion unsecured revolving credit facility (“Credit Facility”) that matures in April 2023. The Revolving Loan Credit Agreement amended and restated the Company’s existing revolving credit facility dated July 2016. The Company may use the proceeds of future borrowings under the Credit Facility for refinancing other indebtedness, working capital, capital expenditures and other general corporate purposes, including permitted acquisitions.

There were no outstanding borrowings under the Credit Facility as of October 31, 2018. The Company continues to pay a commitment fee on the available amount of the Credit Facility, which is included within interest expense in the Company's condensed consolidated statement of operations.

Interest Expense on Debt

The following table sets forth total interest expense recognized related to debt (in millions):



	Three Months Ended October 31,				Nine Months Ended October 31,
	2018		2017		2018		2017
Contractual interest expense	$	32	$	6	$	74	$	17
Amortization of debt issuance costs	1		1		14		4
Amortization of debt discount	0		6		4		19
	$	33	$	13	$	92	$	40