Debt

6 Months Ended

Jun. 30, 2019

The Company’s outstanding debt is as follows:



(In millions)	June 30, 2019		December 31, 2018
Short-term:
Commercial paper	$	549	$	—
Term loan facility	300		—
Current portion of long-term debt	814		314
	1,663		314
Long-term:
Senior notes – 2.35% due 2019	300		300
Senior notes – 2.35% due 2020	499		499
Senior notes – 3.50% due 2020	697		—
Senior notes – 4.80% due 2021	499		499
Senior notes - Floating rate due 2021	298		—
Senior notes – 2.75% due 2022	498		497
Senior notes – 3.30% due 2023	348		348
Senior notes – 4.05% due 2023	249		249
Senior notes – 3.50% due 2024	597		597
Senior notes – 3.875% due 2024	993		—
Senior notes – 3.50% due 2025	497		496
Senior notes – 1.349% due 2026	618		—
Senior notes – 3.75% due 2026	597		596
Senior notes – 4.375% due 2029	1,499		—
Senior notes – 1.979% due 2030	617		—
Senior notes – 5.875% due 2033	298		297
Senior notes – 4.75% due 2039	494		—
Senior notes – 4.35% due 2047	492		492
Senior notes – 4.20% due 2048	592		592
Senior notes – 4.90% due 2049	1,236		—
Mortgage – 5.70% due 2035	351		358
Other	4		4
	12,273		5,824
Less current portion	814		314
	$	11,459	$	5,510

The senior notes in the table above are registered by the Company with the Securities and Exchange Commission and are not guaranteed.

The Company has established a short-term debt financing program of up to $1.5 billion through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes. The Company had $549 million of commercial paper outstanding at June 30, 2019 at an effective interest rate of 2.67%.

On September 18, 2018, the Company entered into a bridge loan agreement to finance the JLT Transaction. The bridge loan agreement provided for commitments in the aggregate principal amount of £5.2 billion. In 2018, the Company paid approximately $35 million of customary upfront fees related to the bridge loan at the inception of the loan commitment, of which $30 million was amortized in 2018 and $5 million in the first quarter of 2019 as interest expense based on the period of time the facility was expected to be in effect (including any loans outstanding). The Company terminated its bridge loan agreement on April 1, 2019.

In January 2019, the Company issued $700 million of 3.50% Senior Notes due 2020, $1 billion of 3.875% Senior Notes due 2024, $1.25 billion of 4.375% Senior Notes due 2029, $500 million of 4.75% Senior Notes due 2039, $1.25 billion of 4.90% Senior Notes due 2049 and $300 million of Floating Rate Senior Notes due 2021.

In March 2019, the Company issued €550 million of 1.349% Senior Notes due 2026 and €550 million of 1.979% Senior Notes due 2030. In addition, the Company issued an additional $250 million of 4.375% Senior Notes due 2029, in March 2019. These notes constitute a further issuance of the 4.375% Senior Notes due 2029, of which $1.25 billion aggregate principal amount was issued in January 2019 (see above). After giving effect to the issuance of the notes, the Company has $1.5 billion aggregate principal amount of 4.375% Senior Notes due 2029. The Company used part of the net proceeds from these offerings, along with the $5 billion of Senior Notes issued in January 2019 (discussed above) primarily to fund the acquisition of JLT, including the payment of related fees and expenses, and to repay certain JLT indebtedness, as well as for general corporate purposes.

In March 2019, the Company closed on $300 million one-year and $300 million three-year term loan facilities. The interest rate on these facilities is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. The facilities require the Company to maintain coverage ratios and leverage ratios consistent with the revolving credit facility discussed below. The Company had $300 million of borrowings outstanding under the one -year term facility at June 30, 2019 at an average borrowing rate of 3.05%.

In connection with the closing of the JLT Transaction, the Company assumed approximately $1 billion of historical JLT indebtedness. In April and June of 2019, the Company repaid approximately $450 million and $553 million, respectively, representing all of JLT's debt it acquired upon the closing of the Transaction. The Company incurred debt extinguishment costs of $32 million due to the debt repayments.

In March 2018, the Company issued $600 million of 4.20% senior notes due 2048. The Company used the net proceeds for general corporate purposes.

In October 2018, the Company and certain of its foreign subsidiaries increased its multi-currency five-year unsecured revolving credit facility from $1.5 billion to $1.8 billion. The interest rate on this facility is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. This facility expires in October 2023 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at June 30, 2019.

Fair Value of Short-term and Long-term Debt

The estimated fair value of the Company’s short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.



	June 30, 2019				December 31, 2018
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Short-term debt	$	1,633	$	1,665	$	314	$	313
Long-term debt	$	11,459	$	12,231	$	5,510	$	5,437

The fair value of the Company’s short-term debt consists primarily of commercial paper, borrowings from the term loan facility and term debt maturing within the next year and its fair value approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short- and long-term debt would be classified as Level 2 in the fair value hierarchy.