Financing Arrangements

Commercial Paper

The Company maintains a commercial paper program that allows the Company to have a maximum of $2.250 billion in commercial paper outstanding, with maturities up to 364 days from the date of issuance. As of October 24, 2014, outstanding commercial paper totaled $1.755 billion. No amounts were outstanding as of April 25, 2014. During the three and six months ended October 24, 2014, the weighted average original maturity of the commercial paper outstanding was approximately 47 days and 42 days, respectively, and the weighted average interest rate was 0.11 percent for both periods. The issuance of commercial paper reduces the amount of credit available under the Company’s existing Credit Facility, as defined below.

Line of Credit

The Company has a $2.250 billion syndicated credit facility which expires on December 17, 2017 (Credit Facility) pursuant to a senior unsecured revolving credit agreement dated as of December 17, 2012, among Medtronic, the lenders from time to time party thereto, and Bank of America N.A., as administrative agent and issuing bank. The Credit Facility provides the Company with the ability to increase its borrowing capacity by an additional $750 million at any time during the term of the agreement. At each anniversary date of the Credit Facility, but not more than twice prior to the maturity date, the Company can also request a one-year extension of the maturity date. The Credit Facility provides backup funding for the commercial paper program. As of October 24, 2014 and April 25, 2014, no amounts were outstanding on the committed Credit Facility.

Interest rates are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service. Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. The agreement also contains customary covenants, all of which the Company remains in compliance with as of October 24, 2014.

Other Credit Agreements

In conjunction with the Pending Acquisition of Covidien, Medtronic, Inc. initially contemplated financing a substantial portion of the cash component of the acquisition consideration through an intercompany loan from one or more of its non-U.S. subsidiaries to IrSub. However, as announced on October 3, 2014, following the September 22, 2014 announcement by the U.S. Treasury Department and the U.S. Internal Revenue Service (IRS), Medtronic, Inc. now expects that it will incur approximately $16.3 billion in external indebtedness to finance the cash component of the acquisition consideration and certain transaction expenses. Medtronic, Inc. expects that a substantial portion of such external indebtedness will be incurred by Medtronic, Inc. prior to the consummation of the transaction and will be guaranteed by New Medtronic, either at or shortly following the closing of the Covidien acquisition. As a result, Medtronic, Inc., or its affiliates, will have a sufficient amount of cash available to it by the time of the consummation of the transaction to fund the cash component of the acquisition consideration.

New Bridge Credit Agreement

On November 7, 2014, Medtronic, Inc. entered into a 364-day senior unsecured bridge credit agreement (the New Bridge Credit Agreement), among Medtronic, Inc., New Medtronic, Medtronic Global Holdings SCA, a partnership limited by shares incorporated in Luxembourg and a wholly-owned indirect subsidiary of New Medtronic (Medtronic Luxco), the lenders from time to time party thereto and Bank of America, N.A., as administrative agent. Under the New Bridge Credit Agreement, the lenders party thereto have committed to provide Medtronic, Inc. with unsecured bridge financing in an aggregate principal amount of up to $11.3 billion. The commitments are intended to be available to finance, in part, the cash component of the acquisition consideration and certain transaction expenses to the extent Medtronic, Inc. does not arrange for alternative financing prior to the consummation of the transaction. New Medtronic and Medtronic Luxco have guaranteed the obligations of Medtronic, Inc. under the New Bridge Credit Agreement. If Medtronic, Inc. draws loans under the New Bridge Credit Agreement, it intends to refinance any such loans with the proceeds of other external indebtedness.

Term Loan Credit Agreement

On November 7, 2014, Medtronic, Inc. also entered into the three-year senior unsecured term loan credit agreement (the Term Loan Credit Agreement and, together with the New Bridge Credit Agreement, the New Credit Agreements), among Medtronic, Inc., New Medtronic, Medtronic Luxco, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent. Under the Term Loan Credit Agreement, the lenders party thereto have committed to provide Medtronic, Inc. with unsecured term loan financing in an aggregate principal amount of up to $5.0 billion. Medtronic, Inc. intends to draw upon such commitments on the consummation of the transaction to finance, in part, the cash component of the acquisition consideration and certain transaction expenses. New Medtronic and Medtronic Luxco have guaranteed the obligations of Medtronic, Inc. under the Term Loan Credit Agreement.

Termination of Existing Bridge Credit Agreements

In connection with its entrance into the New Bridge Credit Agreement and the Term Loan Credit Agreement, on November 7, 2014, Medtronic, Inc. terminated the unsecured bridge commitments previously provided to it in an aggregate principal amount of $2.8 billion under the 364-day senior unsecured bridge credit agreement dated as of June 15, 2014. On the same date, IrSub terminated the unsecured bridge commitments previously provided to it in an aggregate principal amount of $13.5 billion under the 60-day senior unsecured cash bridge credit agreement dated as of June 15, 2014.

Amended and Restated Revolving Credit Agreement

On November 7, 2014, Medtronic, Inc. also entered into an amendment and restatement agreement (the Revolver

Amendment Agreement), among Medtronic, Inc., New Medtronic, Medtronic Luxco, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent and issuing bank. Under the Revolver Amendment Agreement, the parties thereto have agreed to enter into an amendment and restatement (the Amended and Restated Revolving Credit Agreement) of Medtronic’s existing $2.250 billion Credit Facility. The effectiveness of the Amended and Restated Revolving Credit Agreement is conditioned on, among other things, the consummation of the acquisition. Under the Amended and Restated Revolving Credit Agreement, the lenders party thereto will provide Medtronic, Inc. and Medtronic Luxco with unsecured revolving credit commitments in an aggregate principal amount of up to $3.5 billion. The commitments are intended to be used for general corporate purposes, including acquisitions and working capital of Medtronic, Inc. and Medtronic Luxco, and to replace the revolving credit facility currently available to Covidien. Medtronic, Inc. and Medtronic Luxco will be coborrowers under the Amended and Restated Revolving Credit Agreement and each of Medtronic, Inc., Medtronic Luxco and New Medtronic will also guarantee the obligations of the co-borrowers under the Amended and Restated Revolving Credit Agreement.

For further information regarding the Pending Acquisition, see Note 3 to the condensed consolidated financial statements.

Bank Borrowings

Bank borrowings consist primarily of borrowings at interest rates considered favorable by management and where natural hedges can be gained for foreign exchange purposes.

Long-Term Debt

Long-term debt consisted of the following:



(in millions, except interest rates)	Maturity by Fiscal Year	Payable as of October 24, 2014			Payable as of April 25, 2014
4.750 percent ten-year 2005 senior notes	2016	$	—		$	600
2.625 percent five-year 2011 senior notes	2016	500			500
Floating rate three-year 2014 senior notes	2017	250			250
0.875 percent three-year 2014 senior notes	2017	250			250
1.375 percent five-year 2013 senior notes	2018	1,000			1,000
5.600 percent ten-year 2009 senior notes	2019	400			400
4.450 percent ten-year 2010 senior notes	2020	1,250			1,250
4.125 percent ten-year 2011 senior notes	2021	500			500
3.125 percent ten-year 2012 senior notes	2022	675			675
2.750 percent ten-year 2013 senior notes	2023	1,250			1,250
3.625 percent ten-year 2014 senior notes	2024	850			850
6.500 percent thirty-year 2009 senior notes	2039	300			300
5.550 percent thirty-year 2010 senior notes	2040	500			500
4.500 percent thirty-year 2012 senior notes	2042	400			400
4.000 percent thirty-year 2013 senior notes	2043	750			750
4.625 percent thirty-year 2014 senior notes	2044	650			650
Interest rate swaps	2016 - 2022	61			56
Deferred gains from interest rate swap terminations	-	10			20
Capital lease obligations	2016 - 2025	132			139
Bank borrowings	2017	3			—
Discount	2017 - 2044	(23		)	(25		)
Total Long-Term Debt		$	9,708		$	10,315

Senior Notes

The Company has outstanding unsecured senior obligations including those indicated as "senior notes" in the long-term debt table above (collectively, the Senior Notes). The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company. The indentures under which the Senior Notes were issued contain customary covenants, all of which the Company remains in compliance with as of October 24, 2014. The Company used the net proceeds from the sale of the Senior Notes primarily for working capital and general corporate uses, which includes the repayment of other indebtedness of the Company. For additional information regarding the terms of these agreements, refer to Note 8 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended April 25, 2014.

As of October 24, 2014, the Company had interest rate swap agreements designated as fair value hedges of certain underlying fixed rate obligations including the Company’s $1.250 billion 3.000 percent 2010 Senior Notes and $600 million 4.750 percent 2005 Senior Notes (both classified as short-term borrowings), $500 million 2.625 percent 2011 Senior Notes, $500 million 4.125 percent 2011 Senior Notes, and $675 million 3.125 percent 2012 Senior Notes. For additional information regarding the interest rate swap agreements, refer to Note 9 to the condensed consolidated financial statements.