DEBT

The carrying value of the Company’s debt, including discounts and the remaining deferred gain from a terminated interest rate swap agreement, consisted of the following (in millions):



	October 3, 2015		January 3, 2015
Term Loan Due June 2015	$	—	$	500
Term Loan Due August 2015	—		250
2016 Senior Notes	502		506
2018 Senior Notes	499		—
2020 Senior Notes	500		—
2023 Senior Notes	897		896
2025 Senior Notes	498		—
2043 Senior Notes	696		696
Yen-denominated Senior Notes due 2017	68		68
Yen-denominated Senior Notes due 2020	106		107
Yen-denominated credit facilities	54		54
Commercial paper borrowings	1,240		789
Total debt	5,060		3,866
Less: current debt obligations	1,796		1,593
Long-term debt	$	3,264	$	2,273

Contractual maturities of the Company's debt for the next five fiscal years and thereafter, excluding any discounts or premiums, as of October 3, 2015 are as follows (in millions):



	Remainder of 2015		2016		2017		2018		2019		After 2019
Future minimum principal payments	$	1,240	$	554	$	68	$	500	$	—	$	2,206

During the first quarter of 2015, the Company repaid its 2-year, $500 million unsecured term loan due June 2015 and its 364-day, $250 million unsecured term loan due August 2015. The Company also increased its commercial paper balance to support the Company’s common stock repurchases during the first quarter of 2015. Refer to Note 6 for further information on the Company's common stock repurchases. Additionally, the Company's yen-denominated credit facility that expired in March 2015 for 3.25 billion Japanese Yen (the equivalent of $27 million as of October 3, 2015) was automatically extended for a one-year period bearing interest at Yen LIBOR plus 0.250%.

During the second quarter of 2015, the Company's other yen-denominated credit facility that expired in June 2015 for 3.25 billion Japanese Yen (the equivalent of $27 million as of October 3, 2015) was automatically extended for a one-year period bearing interest at Yen LIBOR plus 0.270%. Additionally, the Company entered into a 364-day, $175 million unsecured term loan that matures in April 2016, the proceeds of which were used to acquire the remaining ownership interest in Spinal Modulation, Inc. (Spinal Modulation). These borrowings bear interest at London InterBank Offered Rate (LIBOR) plus 0.900% and the Company may repay the term loan at any time. The Company repaid the $175 million term loan in full during the third quarter of 2015 using cash generated from operations.

In July 2015, the Company entered into a commitment letter (Commitment Letter) with Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (together BofAML) pursuant to which BofAML committed to provide a $3.7 billion senior unsecured bridge facility (Bridge Facility) to finance the acquisition of Thoratec Corporation (Thoratec) (see Note 10). As of October 3, 2015, the Company had no outstanding borrowings under the Bridge Facility and it was terminated on October 8, 2015 when the Company completed its acquisition of Thoratec. The Company also recognized $13 million of commitment fees associated with the Bridge Facility in other (income) expense.

During the third quarter of 2015, the Company modified or issued the following debt instruments:

Credit Facility Expiring 2020: In August 2015, the Company entered into a 5-year, $1.5 billion revolving, unsecured committed credit facility (Credit Facility Expiring 2020) that it may draw upon to refinance existing indebtedness and for general corporate purposes. The Credit Facility Expiring 2020 amends and restates the Company's previous $1.5 billion unsecured committed credit facility that was scheduled to expire in May 2018. The Credit Facility Expiring 2020 will expire on August 21, 2020. Borrowings under the Credit Facility Expiring 2020 bear interest at LIBOR plus 0.680%, subject to adjustment in the event of a change in the Company’s credit ratings. The Credit Facility Expiring 2020 also amended the debt covenant relating to the Company's leverage ratio (defined as the ratio of total debt to EBITDA (net earnings before interest, income taxes, depreciation and amortization)) from 3.5 to 1.0 under the prior facility, to 4.25 to 1.0 through the fiscal quarter ending December 31, 2015, 4.0 to 1.0 for the next four consecutive fiscal quarters and 3.5 to 1.0 thereafter. As of October 3, 2015 and January 3, 2015, the Company had no outstanding borrowings under either facility. On October 8, 2015, the Company's credit ratings were downgraded, resulting in an interest rate change from LIBOR plus 0.680% to LIBOR plus 0.900%.

2018 Senior Notes: In September 2015, the Company issued $500 million principal amount of 3-year, 2.000% unsecured senior notes (2018 Senior Notes) that mature in September 2018. The net proceeds from the issuance of the 2018 Senior Notes were used to finance a portion of the Company's Thoratec acquisition that closed in October 2015. Interest payments are required on a semi-annual basis. The 2018 Senior Notes were issued at a discount, yielding an effective interest rate of 2.084% at issuance. The Company may redeem the 2018 Senior Notes at any time at the applicable redemption price.

2020 Senior Notes: In September 2015, the Company issued $500 million principal amount of 5-year, 2.800% unsecured senior notes (2020 Senior Notes) that mature in September 2020. The net proceeds from the issuance of the 2020 Senior Notes were used to finance a portion of the Company's Thoratec acquisition. Interest payments are required on a semi-annual basis. The 2020 Senior Notes were issued at a discount, yielding an effective interest rate of 2.810% at issuance. The Company may redeem the 2020 Senior Notes at any time at the applicable redemption price.

2025 Senior Notes: In September 2015, the Company issued $500 million principal amount of 10-year, 3.875% unsecured senior notes (2025 Senior Notes) that mature in September 2025. The net proceeds from the issuance of the 2025 Senior Notes were used to finance a portion of the Company's Thoratec acquisition. Interest payments are required on a semi-annual basis. The 2025 Senior Notes were issued at a discount, yielding an effective interest rate of 3.922% at issuance. The Company may redeem the 2025 Senior Notes at any time at the applicable redemption price.

Term Loan Due 2020: The Company entered into a 5-year, $2.6 billion term loan due 2020 (Term Loan Due 2020) of which no funds were drawn as of October 3, 2015. On October 8, 2015, the Company received proceeds of $2.1 billion to finance the Company's acquisition of Thoratec. The remaining $500 million may be drawn upon to refinance existing indebtedness of the Company and for general corporate purposes. The Company may make interest payments under the Term Loan Due 2020 at its election of a 1-month, 2-month, 3-month or 6-month LIBOR plus 1.125%, subject to adjustment in the event of a change in the Company’s credit ratings. Required quarterly principal payments on the Term Loan Due 2020 begin in March 2016, with an increase to the quarterly principal payments after three years followed by a final maturity payment due on October 8, 2020. The Company may make optional principal payments on the outstanding borrowings at any time.

Other debt-related activities: During the third quarter of 2015, the Company amended a debt covenant related to its 1.580% Yen Denominated Senior Notes Due 2017 and its 2.040% Yen Denominated Senior Notes Due 2020 from the required ratio of total debt to total capitalization not exceeding 60% to a new ratio of total debt to total capitalization not exceeding 65% through the second quarter of 2016, reducing back to 60% thereafter.