Debt

9 Months Ended

Sep. 30, 2020

The Company’s outstanding debt is as follows:


(In millions)	September 30, 2020		December 31, 2019
Short-term:



Current portion of long-term debt	$	1,216	$	1,215
	1,216		1,215
Long-term:



Senior notes – 2.35% due 2020	—		500
Senior notes – 3.50% due 2020	700		698
Senior notes – 4.80% due 2021	500		499
Senior notes - Floating rate due 2021	299		298
Senior notes – 2.75% due 2022	499		498
Senior notes – 3.30% due 2023	349		349
Senior notes – 4.05% due 2023	249		249
Senior notes – 3.50% due 2024	598		597
Senior notes – 3.875% due 2024	995		994
Senior notes – 3.50% due 2025	497		497
Senior notes – 1.349% due 2026	641		609
Senior notes – 3.75% due 2026	597		597
Senior notes – 4.375% due 2029	1,499		1,499
Senior notes – 1.979% due 2030	635		607
Senior notes – 2.250% due 2030	737		—
Senior notes – 5.875% due 2033	298		298
Senior notes – 4.75% due 2039	495		494
Senior notes – 4.35% due 2047	493		492
Senior notes – 4.20% due 2048	592		592
Senior notes – 4.90% due 2049	1,237		1,237
Mortgage – 5.70% due 2035	334		345
Term loan facility - two year	500		—
Other	4		7
	12,748		11,956
Less current portion	1,216		1,215
	$	11,532	$	10,741

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 no commercial paper outstanding at September 30, 2020.

Credit Facilities

The Company and certain of its foreign subsidiaries have a multi-currency five-year unsecured revolving credit facility of $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. The facility includes a provision for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available. In such case, the rate would be determined using an alternate reference rate that has been broadly accepted by the syndicated loan market in the United States in lieu of LIBOR (the “LIBOR successor rate”). If no LIBOR successor rate has been determined, the rate will be based on the higher of the rate announced publicly by Citibank, New York, NY, as its base rate or the fed funds rate plus a fixed margin. The Company borrowed $1 billion under this facility in the first quarter of 2020, which

was repaid in full during the second quarter of 2020. There were no borrowings outstanding under this facility at September 30, 2020.

In January 2020, the Company entered into two new term loan facilities: a $500 million one-year facility and a $500 million two-year facility. 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 above. The facilities include a provision for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available, which is expected to occur by the end of 2021.These facilities are expected to expire on or around the time that LIBOR is expected to be replaced by a successor rate. During the third quarter of 2020, the Company repaid the $500 million of borrowings on its one-year facility. The Company had $500 million of borrowings outstanding under its two-year facility and no borrowings outstanding under its one-year facility at September 30, 2020.

In April 2020, the Company entered into a new 364 day $1 billion unsecured revolving credit facility with a term out option after one year. The facility has similar coverage and leverage ratios as the facility discussed above. As of the date of this report the Company had no borrowings under this facility.

Senior Notes

In May 2020, the Company issued $750 million of 2.250% Senior Notes due 2030. The Company used the net proceeds to reduce outstanding short term borrowings.

In March 2020, the Company repaid $500 million of maturing senior notes.

In September 2019, the Company repaid $300 million of maturing senior notes.

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 JLT Transaction. The Company incurred debt extinguishment costs of $32 million due to the debt repayments.

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 below). 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 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. The floating rate notes are based on LIBOR plus a fixed margin. These notes are due prior to the date that LIBOR is expected to be replaced by a successor rate, which is expected to occur in 2021.

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.


	September 30, 2020				December 31, 2019
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value


Short-term debt	$	1,216	$	1,234	$	1,215	$	1,229
Long-term debt	$	11,532	$	13,480	$	10,741	$	11,953

The fair value of the Company’s short-term debt consists primarily of borrowings from the term loan and revolving credit facilities 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-term and long-term debt would be classified as Level 2 in the fair value hierarchy.