DEBT

Amounts related to early debt extinguishment during the three months and nine months ended September 30, 2013 and 2012 were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2013		2012		2013		2012
Early debt reductions (a)	$	442	$	611	$	500	$	1,047
Pre-tax early debt extinguishment costs (b)	15		13		24		39

(a)

Reductions related to notes with interest rates ranging from 5.45% to 7.40% with original maturities from 2014 to 2033 and from 1.63% to 6.95% with original maturities from 2017 to 2023 for the three months ended September 30, 2013 and 2012, respectively, and 5.20% to 7.95% with original maturities from 2014 to 2033 and from 1.63% to 7.95% with original maturities from 2012 to 2023 for the nine months ended September 30, 2013 and September 30, 2012, respectively.


(b)	Amounts are included in Restructuring and Other Charges in the accompanying consolidated statements of operations.

In February 2012, International Paper borrowed $1.2 billion under a term loan with an initial interest rate of LIBOR plus a margin of 138 basis points that varied depending on the credit rating of the Company and entered into a $200 million term loan with an interest rate of LIBOR plus a margin of 175 basis points, both with maturity dates in 2017. The proceeds from these borrowings were used, along with available cash, to fund the acquisition of Temple-Inland. During 2012, International Paper fully repaid the $1.2 billion term loan.

In June 2012, International Paper borrowed $225 million under the receivable securitization facility acquired from Temple-Inland with an interest rate of 0.224% plus a margin of 70 basis points. The borrowings under this receivable securitization facility were repaid in July 2012.

Subsequent to September 30, 2013, International Paper executed call notices on approximately $70 million of industrial development bonds with interest rates from 4.55% to 6.75% and original maturities from 2015 to 2031, which are expected to settle during the fourth quarter of 2013.

At September 30, 2013, the fair value of International Paper’s $9.7 billion of debt was approximately $11.0 billion. The fair value of the Company’s long-term debt is estimated based on the quoted market prices for the same or similar issues. International Paper’s long-term debt is classified as Level 2 within the fair value hierarchy, which is further defined in Note 12 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Maintaining an investment-grade credit rating is an important element of International Paper’s financing strategy. At September 30, 2013, the Company held long-term credit ratings of BBB (stable outlook) and Baa3 (stable outlook) by S&P and Moody’s, respectively.