Debt

6 Months Ended

Jun. 30, 2019

Credit Facilities

At June 30, 2019, our short-term liquidity sources include a $2.5 billion revolving credit facility, or Credit Facility, expiring on July 31, 2021, uncommitted credit lines aggregating $1.5 billion and the ability to issue up to $2 billion of commercial paper.

There were no outstanding commercial paper issuances or borrowings under the Credit Facility or the uncommitted credit lines at June 30, 2019 and December 31, 2018. Available and unused credit lines at June 30, 2019 and December 31, 2018 were (in millions):



	2019		2018
Credit Facility	$	2,500.0	$	2,500.0
Uncommitted credit lines	1,488.2		1,231.6
Available and unused credit lines	$	3,988.2	$	3,731.6

The Credit Facility contains financial covenants that require us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA of no more than 3 times for the most recently ended 12-month period (EBITDA is defined as earnings before interest, taxes, depreciation and amortization) and an Interest Coverage Ratio of consolidated EBITDA to interest expense of at least 5 times for the most recently ended 12-month period. At June 30, 2019 we were in compliance with these covenants as our Leverage Ratio was 2.4 times and our Interest Coverage Ratio was 9.6 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

Short-Term Debt

In February 2019, Omnicom Finance Limited, or OFL, a wholly owned subsidiary of Omnicom, issued €520 million of short-term senior notes in a private placement to an investor outside the United States. The notes are unsecured, non-interest bearing and mature on August 14, 2019. The notes are fully and unconditionally guaranteed by Omnicom and rank equal in right of payment with all existing and future unsecured senior indebtedness of OFL. Short-term debt at June 30, 2019 and December 31, 2018 was $608.5 million and $8.1 million, respectively. Due to its short-term nature, the carrying value of the short-term debt approximates fair value.

Long-Term Debt

Long-term debt at June 30, 2019 and December 31, 2018 was (in millions):



	2019			2018
6.25% Senior Notes due 2019	$	500.0		$	500.0
4.45% Senior Notes due 2020	1,000.0			1,000.0
3.625% Senior Notes due 2022	1,250.0			1,250.0
3.65% Senior Notes due 2024	750.0			750.0
3.60% Senior Notes due 2026	1,400.0			1,400.0
	4,900.0			4,900.0
Unamortized premium (discount), net	4.2			4.9
Unamortized debt issuance costs	(14.4		)	(16.4		)
Unamortized deferred gain from settlement of interest rate swaps	38.9			48.0
Fair value adjustment attributed to outstanding interest rate swaps	(3.3		)	(52.8		)
	4,925.4			4,883.7
Current portion	(899.5		)	(499.6		)
Long-term debt	$	4,025.9		$	4,384.1

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under all the senior notes (other than the OFL notes). The senior notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI’s obligations with respect to the senior notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets primarily consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries, and the related interest receivable. There are no restrictions on the ability of OCI or Omnicom to obtain funds from our subsidiaries through dividends, loans or advances. The senior notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

At June 30, 2019, we recorded a long-term receivable of $4.7 million in connection with the $750 million fixed-to-floating interest rate swap on our 3.65% Senior Notes due 2024, or 2024 Notes, and a long-term liability of $8.0 million in connection with the $500 million fixed-to-floating interest rate swap on our 3.60% Senior Notes due 2026, or 2026 Notes. The receivable and liability represent the fair values of the swaps on the 2024 Notes and 2026 Notes that were substantially offset by the change in the fair values of the notes. The fixed-to-floating interest rate swaps have the economic effect of converting our debt portfolio to approximately 75% fixed rate obligations and 25% floating rate obligations.

Our $500 million 6.25% Senior Notes due 2019, or 2019 Notes, matured on July 15, 2019 and were retired. As of June 30, 2019, the 2019 Notes were classified as current.

On July 8, 2019, Omnicom Finance Holdings plc, or OFHP, a U.K. based wholly owned subsidiary of Omnicom, issued €500 million 0.80% Senior Notes due July 8, 2027 and €500 million 1.40% Senior Notes due July 8, 2031, collectively the Euro Notes. The U.S. Dollar equivalent of the net proceeds, after deducting the underwriting discount and offering expenses, was $1.1 billion. A portion of the net proceeds was used to retire the outstanding 2019 Notes at maturity. The remaining net proceeds will be used to redeem $400 million aggregate principal amount of the outstanding $1 billion 4.45% Senior Notes due 2020, or the 2020 Notes, on August 1, 2019 and for general corporate purposes, which could include working capital expenditures and repayment of short-term or long-term debt.

Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed OFHP’s obligations with respect to the Euro Notes. OFHP’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, which provide funding for various operating companies in Europe, Brazil, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivables. There are no restrictions on the ability of Omnicom, OCI or OFHP to obtain funds from their subsidiaries through dividends, loans or advances. The Euro Notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFHP and each of Omnicom and OCI, respectively.

On July 2, 2019, Omnicom announced the partial redemption of $400 million aggregate principal amount of the outstanding 2020 Notes for redemption on August 1, 2019 at a price equal to 100% of the principal amount of the 2020 Notes being redeemed plus accrued interest and a make-whole premium as specified in the indenture. At June 30, 2019, we classified $400 million of the 2020 Notes as current.