Debt

The following is a summary of the Company's debt as of April 1, 2016 and April 3, 2015:



(Amounts in millions)	April 1, 2016		April 3, 2015
Short-term debt and current maturities of long-term debt
Euro-denominated commercial paper	$	559	$	—
Current maturities of long-term debt	79		766
Current maturities of capitalized lease liabilities	72		117
Short-term debt and current maturities of long term debt	$	710	$	883

Long-term debt, net of current maturities
4.45% term notes, due September 2022	$	454	$	451
6.50% term notes, due March 2018	—		917
2.50% term notes, due September 2015	—		350
Loan payable, due March 2021	575		—
Loan payable, due January 2019	284		—
Loan payable, due March 2018	—		68
Loan payable, due May 2016	71		371
Payable - credit facility, various⁽¹⁾	395		—
Lease credit facility, various⁽²⁾	49		—
Mandatorily redeemable preferred stock outstanding, due March 2023	61		61
Capitalized lease liabilities	141		202
Borrowings for assets acquired under long-term financing	51		95
Other borrowings	4		3
Long-term debt	2,085		2,518
Less: current maturities of long-term debt	151		883
Long-term debt, net of current maturities	$	1,934	$	1,635


⁽¹⁾	Borrowings under the $2.5 billion credit facility are classified as short-term debt if the Company intends to repay within twelve months and as long-term debt otherwise.


⁽²⁾	Drawings under the lease credit facility convert into individual term notes of variable terms up to sixty months therefrom, depending on the nature of the underlying equipment being financed. Borrowings under the lease credit facility are classified as short-term debt if the Company intends to repay within twelve months and as long-term debt otherwise.

The increase in the balance of the 4.45% term notes primarily reflects the year-to-date change in fair value of the interest rate swaps (see Note 8).

During fiscal 2016, the Company redeemed all outstanding 6.50% term notes due March 2018 at par plus redemption premiums related to a make-whole provision and accrued interest (the Redemption). The Redemption payments included $918 million in outstanding principle, accrued interest through the redemption dates of $26 million, and redemption premiums of $94 million. The Company recorded a $97 million net loss on extinguishment of debt associated with the Redemption, consisting of the redemption premiums noted above, a $1 million loss related to a cash flow hedge associated with the extinguished debt, and a write-off of unamortized debt discount and debt issuance costs of $2 million. The Redemption was funded from cash on hand and $675 million drawn from the Company's $2.5 billion credit facility (Credit Facility).

Additionally, during fiscal 2016, the Company repaid its $68 million loan payable which was due March 2018, and repaid the $350 million 2.50% term note which matured in September 2015.

During the fourth quarter of fiscal 2016, the Company entered into a $525 million (with an option that the commitments be increased to $775 million if the existing or other lenders are willing to provide such an increase) unsecured term loan agreement with a financial institution (Term Loan), under which commitments were increased to $575 million subsequent to the initial borrowing. The Term Loan, due March 2021, is payable on a quarterly basis at a rate of 5.00% of the original principal amount per year. At CSC's option, the Term Loan bears interest at a variable rate equal to the adjusted London interbank offered rate (Adjusted LIBOR) for a one, two, three, or six month interest period, plus a margin between 0.75% and 1.50% based on a pricing grid consistent with the Company's outstanding Credit Facility or the greater of the Prime Rate, the Federal Funds Rate plus 0.50%, or the Adjusted LIBOR for a one-month interest period plus 1.00%, in each case plus a margin of up to 0.50%, based on a pricing grid consistent with the Credit Facility. As of April 1, 2016, $575 million in borrowings with an approximate interest rate of 1.68% were outstanding under the Term Loan. The Term Loan is guaranteed by the Company, and financial covenants associated with the Term loan are the same as those associated with the Company's Credit Facility.

During the third quarter of fiscal 2016, the Company's subsidiary, CSC Computer Sciences UK Holdings Ltd., entered into a £200 million delayed-draw unsecured loan payable with a financial institution (with an option that the commitments be increased to £300 million if the existing or other lenders are willing to provide such an increase). On December 31, 2015, the full amount of the initial commitment, £200 million or $284 million (at the April 1, 2016 exchange rates) was borrowed. The loan is due January 2019 and bears interest at the three-month LIBOR rate plus 0.65%, or 1.28% as of April 1, 2016. The funding from this advance was used to pay down £200 million of the aggregate principal balance of an existing £250 million loan payable. The maturity date of the remaining £50 million or $71 million (at the April 1, 2016 exchange rates) principal balance was extended to May 2016. The loan is guaranteed by the Company, and financial covenants associated with the notes are the same as those associated with the Company's Credit Facility. Subsequent to April 1, 2016 the £50 million loan payable due May 2016 was replaced with borrowings under the Credit Facility which the Company does not intend to repay within twelve months. The Company has excluded the £50 million or $71 million (at the April 1, 2016 exchange rates) loan payable due May 2016 from current liabilities accordingly.

During fiscal 2016, CSC drew down $2.2 billion of its $2.5 billion Credit Facility and repaid $1.8 billion of that amount. As of April 1, 2016 there was $395 million of borrowings outstanding under the $2.5 billion Credit Facility with a weighted average interest rate of approximately 2.67%. There were no borrowings outstanding as of April 3, 2015.

During the second quarter of fiscal 2016, CSC and two of its subsidiaries, CSC Capital Funding Limited (the Issuer) and CSC Computer Sciences S.a.r.l., established a European commercial paper program (the ECP Program) under which the Issuer may issue short-term commercial paper notes (the Notes) up to a maximum aggregate amount outstanding at any time of €500 million or its equivalent in alternative currencies. The maturities of the Notes may vary but may not exceed 364 days from the date of issue. The Notes are unconditionally guaranteed by CSC and rank at least equal with all of the Company's other unsecured and unsubordinated indebtedness. The Company's $2.5 billion committed revolving credit facility is available, subject to certain conditions, to repay the Notes, if necessary. The Notes may be issued at a discount or bear fixed or floating interest rates or a coupon calculated by reference to an index or formula. During fiscal 2016, the Company borrowed $821 million and repaid $263 million under the ECP Program. As of April 1, 2016, there was €500 million or $559 million (at the April 1, 2016 exchange rates) of commercial paper outstanding with a weighted average interest rate of approximately 0.15%.

During fiscal 2015, CSC Asset Funding I LLC, a special purpose subsidiary of CSC Finance Co. LLC (CSC Finco) which is a wholly owned subsidiary of the Company, entered into a master loan and security agreement with a financial institution which provided for a $250 million committed Lease Credit Facility to finance CSC Finco's capital expenditures for IT equipment and associated software in support of IT services provided to the Company's customers. Borrowings under the Lease Credit Facility accrue interest at the one-month LIBOR rate plus 1.00% per annum, or 1.44% as of April 1, 2016. During the third quarter of fiscal 2016 the drawdown availability period was extended from eighteen months to twenty-two months. As of April 1, 2016, there were $49 million of borrowings against the Lease Credit Facility. Subsequent to April 1, 2016, the Company entered into an amended and restated master loan and security agreement which decreased the maximum commitment under the Lease Credit Facility to $150 million and extended the drawdown period to November 2016.

Capitalized lease liabilities represent obligations due under capital leases for the use of computers and other equipment. The gross amount of assets recorded under capital leases was $699 million with accumulated amortization of $563 million, as of April 1, 2016, and $633 million with accumulated amortization of $455 million, as of April 3, 2015.

Certain asset purchases under outsourcing contracts were financed by borrowings from customers. These borrowings carry an interest rate of 0.5% to 9.5% and will mature over the next three years. Gross amounts of assets purchased under long-term financings included $50 million and $58 million in property and equipment, $94 million and $97 million in software and $44 million and $44 million in outsourcing contract costs as of April 1, 2016 and April 3, 2015, respectively.

The Company had $4 million and $3 million of other borrowings outstanding as of April 1, 2016 and April 3, 2015, respectively, consisting of other interest bearing debt and notes payable.

The Company was in compliance with all financial covenants associated with its borrowings as of April 1, 2016 and April 3, 2015.

Expected maturities of long-term debt, including borrowings for asset financing but excluding future minimum capital lease payments, for fiscal years subsequent to April 1, 2016, are as follows:



Fiscal Year	Amount (in millions)
2017	$	79
2018	51
2019	326
2020	36
2021	935
Thereafter	517
Total	$	1,944

The future minimum lease payments required to be made under the capital leases as of April 1, 2016, are as follows:



Fiscal Year	Amount (in millions)
2017	$	78
2018	35
2019	19
2020	13
2021	5
Thereafter	—
Total minimum lease payments	150
Less: Amount representing interest and executory costs	(9		)
Present value of net minimum lease payments	141
Less: Current maturities of capital lease obligations	(72		)
Long-term capitalized lease liabilities	$	69