Short-Term Borrowings and Long-Term Debt

9 Months Ended

Sep. 30, 2012

Short-Term Borrowings and Long-Term Debt

11. Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt consist of the following:

	September 30,			December 31,
(In millions)	2012			2011
Short-term borrowings
Commercial paper issuances	$	250.0		$	0.0
Various debt due to international banks		4.4			2.6
Total short-term borrowings	$	254.4		$	2.6
Long-term debt
3.35% Senior notes due December 15, 2015	$	250.0		$	250.0
Less: Discount		(0.2	)		(0.3	)
2.875% Senior notes due October 1, 2022		400.0			0.0
Less: Discount		(0.4	)		0.0
Net long-term debt	$	649.4		$	249.7

2.875% Senior Notes

On September 26, 2012, the Company closed an underwritten public offering of $400 million aggregate principal amount of 2.875% Senior Notes due October 1, 2022 (the “Notes”). The Notes were issued under the second supplemental indenture (the “Second Supplemental Indenture”), dated September 26, 2012, to the indenture dated December 15, 2010 (the “Base Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. Interest on the Notes is payable semi-annually, beginning April 1, 2013. The Notes will mature on October 1, 2022, unless earlier retired or redeemed as described below.

The Company may redeem the Notes, at any time in whole or from time to time in part, prior to their maturity date at a redemption price equal to the greater of: (i) 100% of the principal amount of the Notes being redeemed; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Second Supplemental Indenture), plus 20 basis points. In addition, if the Company undergoes a “change of control” (as defined in the Second Supplemental Indenture), and if, generally within 60 days thereafter, the Notes are rated below investment grade by each of the rating agencies designated in the Second Supplemental Indenture, the Company will be required to offer to repurchase the Notes at 101% of par plus accrued and unpaid interest to the date of repurchase.

The Notes are senior unsecured obligations and rank equal in right of payment to the Company’s other senior unsecured debt from time to time outstanding. The Notes are effectively subordinated to any secured debt the Company incurs to the extent of the collateral securing such secured debt, and will be structurally subordinated to all future and existing obligations of the Company’s subsidiaries.

The Base Indenture and the Second Supplemental Indenture contain covenants that, among other things, restrict the Company’s ability to create liens and engage in sale-leaseback transactions, consolidations, mergers and dispositions of all or substantially all of the Company’s assets. These covenants are subject to a number of important exceptions and qualifications.

In addition, the Company has agreed to cause each of its subsidiaries that guarantees its obligations under its senior unsecured credit facility to guarantee the Company’s obligations under the Notes on a senior unsecured basis. Currently, none of the Company’s subsidiaries guarantees the Company’s obligations under its senior unsecured credit facility.

Commercial Paper

The Company issued $250 million of commercial paper as of September 30, 2012 for additional funding for the Avid Health acquisition. (See Note 9 for additional acquisition information.)