Debt

Senior Bridge Term Loan Commitment

In connection with the Company’s execution of an agreement to acquire Agila Specialties (“the Transaction”), in February 2013 the Company obtained a commitment letter from Morgan Stanley Senior Funding, Inc. for a new $1 billion senior unsecured bridge term loan in connection with the Transaction, which together with internal sources, including available cash and existing lines of credit, is expected to be sufficient to finance the Transaction. The bridge term loan is subject to the negotiation of mutually acceptable definitive documentation, which will include customary representations and warranties, affirmative and negative covenants and events of default. Additionally, the lenders’ obligation to provide the bridge term loan is subject to the satisfaction of specified conditions, including consummation of the Transaction in accordance with the terms of the Agreements, the accuracy of specified representations, the absence of specified defaults, the delivery of a certificate on behalf of the Company with respect to the solvency (on a consolidated basis) of the Company and its subsidiaries, taken as a whole, immediately after the consummation of the transactions contemplated by the Agreements, and other customary conditions.

Receivables Facility

The Company has a $400 million accounts receivable securitization facility (“Receivables Facility”), which will expire in February 2015. Interest rates are based on prevailing market rates for short-term commercial paper or LIBOR plus a program fee of 75 basis points. A commitment fee of 35 basis points, on an annual basis, is paid to maintain the availability under the Receivables Facility.

The Receivables Facility contains requirements relating to the performance of the accounts receivable and covenants relating to the Company. If the Company does not comply with these covenants, the Company’s ability to use the Receivables Facility may be suspended and repayment of any outstanding balances under the Receivables Facility may be required. At June 30, 2013 and December 31, 2012, the Company was in compliance with all covenants. As of June 30, 2013 and December 31, 2012, respectively, the Condensed Consolidated Balance Sheets include $555.6 million and $556.5 million of accounts receivable balances sold to Mylan Securitization LLC, a wholly owned bankruptcy remote subsidiary. Also included in the Condensed Consolidated Balance Sheets at June 30, 2013 and December 31, 2012, respectively, are $235 million and $180 million of short-term borrowings, which are recorded as a secured loan. The interest rate on borrowings under the Receivables Facility was approximately 0.96% at June 30, 2013.

Long-Term Debt

A summary of long-term debt is as follows:



(In thousands)	June 30, 2013		December 31, 2012
U.S. Term Loans	$	—	$	1,156,250
Revolving Facility	250,000		—
2016 Senior Notes	497,047		—
2017 Senior Notes	550,000		550,000
2018 Senior Notes (2.60% coupon)	648,646		—
2018 Senior Notes (6.00% coupon)	813,546		826,974
2020 Senior Notes	1,012,700		1,013,372
2023 Senior Notes	748,518		748,452
Cash Convertible Notes	1,291,595		1,136,768
Other	132		132
	5,812,184		5,431,948
Less: Current portion	14		94,752
Total long-term debt	$	5,812,170	$	5,337,196

Senior Credit Facilities

In June 2013, the Company entered into a credit agreement (the “Senior Credit Agreement”) with a syndicate of banks which contains a $1.50 billion revolving facility (the “Revolving Facility”) under which the Company may obtain extensions of credit, subject to the satisfaction of specified conditions, in U.S. dollars or alternative currencies, including Euros, Sterling, Yen, and such other currencies that are acceptable to each lender under the Revolving Facility and the Administrative Agent. The Revolving Facility includes a $150 million subfacility for the issuance of letters of credit and a $125 million subfacility for swingline borrowings. At June 30, 2013, the Company had $250 million outstanding under the Revolving Facility. The interest rate on the Revolving Facility at June 30, 2013 was 1.49%. Amounts drawn on the Revolving Facility become due and payable on June 27, 2018.

The Senior Credit Agreement contains customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of business existence and insurance, and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness and limitations on liens, mergers and certain other fundamental changes, investments and loans, transactions with affiliates, payments of dividends and other restricted payments, and changes in our lines of business. The Senior Credit Agreement contains a maximum consolidated leverage ratio financial covenant.

In June 2013, in connection with its entry into the Senior Credit Agreement, the Company terminated the credit agreement entered into in November 2011 (the “Prior Credit Agreement”). An amortization payment due in the first quarter of 2013 on the U.S. Term Loans was paid in March 2013, in the amount of $23.4 million. The remaining balance on the U.S. Term Loans of $1.13 billion was paid in June 2013, utilizing the proceeds from the June 2013 senior note offerings as described below.

Senior Notes

In June 2013, the Company issued $500 million aggregate principal amount of 1.80% Senior Notes due 2016 (“2016 Senior Notes”). These notes are Mylan’s senior unsecured obligations and were issued to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act in a private offering exempt from the registration requirements of the Securities Act. Interest on the 2016 Senior Notes accrues from June 25, 2013 and is payable semiannually in arrears on December 24 and June 24 of each year, beginning on December 24, 2013. The 2016 Senior Notes will mature on June 24, 2016, subject to earlier repurchase or redemption in accordance with the terms of the indenture. The Company has entered into interest rate swaps that convert $500 million of 2016 Senior Notes principal debt to a variable rate, which was 1.45% at June 30, 2013. At June 30, 2013, the $497.0 million of 2016 Senior Notes debt is net of a $0.4 million discount and includes a fair value adjustment of $2.6 million associated with the interest rate swaps.

In June 2013, the Company issued $650 million aggregate principal amount of 2.60% Senior Notes due 2018 (“2018 - 2.6% Senior Notes”). These notes are Mylan’s senior unsecured obligations and were issued to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act in a private offering exempt from the registration requirements of the Securities Act. Interest on the 2018 - 2.6% Senior Notes accrues from June 25, 2013 and is payable semiannually in arrears on December 24 and June 24 of each year, beginning on December 24, 2013. The 2018 - 2.6% Senior Notes will mature on June 24, 2018, subject to earlier repurchase or redemption in accordance with the terms of the indenture. At June 30, 2013, the $648.6 million of debt associated with the 2018 - 2.6% Senior Notes includes a $1.4 million discount.

In June 2013 and in connection with the offering of the 2016 Senior Notes and the 2018 - 2.6% Senior Notes (collectively the “Notes”), the Company entered into a registration rights agreement with the initial purchasers of the Notes. Pursuant to the registration rights agreement, the Company will use commercially reasonable efforts (1) to file a registration statement with respect to an offer to exchange the 2016 Senior Notes and the 2018 - 2.6% Senior Notes (each, an “exchange offer”) for new notes with the same aggregate principal amount and terms substantially identical in all material respects and (2) to cause the exchange offer registration statement to be declared effective by the SEC under the Securities Act.

The Company may redeem some or all of the 2016 Senior Notes and 2018 - 2.6% Senior Notes at any time prior to maturity at a price equal to the greater of 100% of the principal amount of notes being redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed discounted to the redemption date on a semi-annual basis at the treasury rate plus 20 basis points in the case of the 2016 Senior Notes or 30 basis points in the case of the 2018 - 2.6% Senior Notes, plus in each case accrued and unpaid interest on the notes being redeemed accrued to the redemption date.

In June 2013, the Company announced its intention to redeem all of its outstanding 7.625% Senior Notes due 2017 (“2017 Senior Notes”) pursuant to their terms. On July 18, 2013, the Company redeemed the 2017 Senior Notes for a total of $608.8 million, including a $58.8 million redemption premium. The Company will record a pre-tax charge of approximately $64 million during the third quarter of 2013 related to the redemption of the 2017 Senior Notes, comprised of the redemption premium and the write-off of deferred financing fees. The redemption of the 2017 Senior Notes was funded through borrowings under the Revolving Facility and, as such, the amount outstanding at June 30, 2013 is classified as non-current in the Condensed Consolidated Balance Sheets.

The Company has entered into interest rate swaps that convert $500 million of 6.0% Senior Notes due 2018 (“2018 - 6.0% Senior Notes”) principal debt to a variable rate. The variable rate was 3.23% at June 30, 2013. At June 30, 2013, the $813.5 million of 2018 - 6.0% Senior Notes debt is net of a $9.0 million discount and includes a fair value adjustment of $22.5 million associated with the interest rate swaps. At December 31, 2012, the $827.0 million of 2018 - 6.0% Senior Notes debt is net of a $9.7 million discount and includes a fair value adjustment of $36.6 million.

At June 30, 2013 and December 31, 2012, the $1.01 billion of 2020 Senior Notes debt includes a premium of $12.7 million and $13.4 million, respectively.

At June 30, 2013 and December 31, 2012, the $748.5 million of 2023 Senior Notes includes a $1.5 million discount.

Cash Convertible Notes

At June 30, 2013, the $1.29 billion outstanding consists of $511.9 million of Cash Convertible Notes debt ($574 million face amount, net of a $62.1 million discount) and the bifurcated conversion feature with a fair value of $779.7 million recorded as a liability within long-term debt in the Condensed Consolidated Balance Sheets at June 30, 2013. The Cash Convertible Notes will mature on September 15, 2015, subject to earlier repurchase or conversion. Holders may convert their notes subject to certain conversion provisions determined by the market price of the Company’s common stock, specified distributions to common shareholders, a fundamental change, and certain time periods specified in the purchase agreement. Additionally, the Company has purchased call options, which are recorded as assets at their fair value of $779.7 million within other assets in the Condensed Consolidated Balance Sheets at June 30, 2013. At December 31, 2012, the $1.14 billion outstanding consists of $500.5 million of debt ($575 million face amount, net of a $74.5 million discount) and the bifurcated conversion feature with a fair value of $636.3 million recorded as a liability within other long-term obligations in the Condensed Consolidated Balance Sheets. The purchased call options are assets recorded at their fair value of $636.3 million within other assets in the Condensed Consolidated Balance Sheets at December 31, 2012.

As of June 30, 2013, because the closing price of Mylan’s common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day in the June 30, 2013 period, was more than 130% of the applicable conversion reference price of $13.32 at June 30, 2013, the $574 million of Cash Convertible Notes was currently convertible. Although de minimis conversions have been requested, the Company’s experience is that convertible debentures are not normally converted by investors until close to their maturity date. Upon an investor’s election to convert, the Company is required to pay the full conversion value in cash. Should holders elect to convert, the Company intends to draw on its revolving credit facility to fund any principal payments. The amount payable per $1,000 notional bond would be calculated as the product of (1) the conversion reference rate (currently 75.0751) and (2) the average Daily Volume Weighted Average Price per share of common stock for a specified period following the conversion date. Any payment above the principal amount is matched by a convertible note hedge.

Fair Value

At June 30, 2013 and December 31, 2012, the fair value of the Senior Notes was approximately $4.47 billion and $3.43 billion, respectively. At June 30, 2013 and December 31, 2012, the fair value of the Cash Convertible Notes was approximately $1.36 billion and $1.22 billion, respectively. The fair values of the Senior Notes and Cash Convertible Notes were valued at quoted market prices from broker or dealer quotations and were classified as Level 2 in the fair value hierarchy. Based on quoted market rates of interest and maturity schedules for similar debt issues, the fair values of the U.S. Term Loans and Revolving Facility, determined based on Level 2 inputs, approximate their carrying values at June 30, 2013 and December 31, 2012.

Mandatory minimum repayments remaining on the outstanding borrowings under the Revolving Facility and notes at notional amounts at June 30, 2013 are as follows for each of the periods ending December 31:



(In thousands)	Cash Convertible Notes		2016 Senior Notes		2017 Senior Notes ⁽¹⁾		2018 - 6.0% Senior Notes		2018 - 2.6% Senior Notes		2020 Senior Notes		2023 Senior Notes		Revolving Facility		Total
2013	$	14	$	—	$	550,000	$	—	$	—	$	—	$	—	$	—	$	550,014
2014	—		—		—		—		—		—		—		—		—
2015	573,970		—		—		—		—		—		—		—		573,970
2016	—		500,000		—		—		—		—		—		—		500,000
2017	—		—		—		—		—		—		—		—		—
Thereafter	—		—		—		800,000		650,000		1,000,000		750,000		250,000		3,450,000
Total	$	573,984	$	500,000	$	550,000	$	800,000	$	650,000	$	1,000,000	$	750,000	$	250,000	$	5,073,984

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⁽¹⁾	The redemption of the 2017 Senior Notes on July 18, 2013 was funded through borrowings under the Revolving Facility and, as such, the amount outstanding at June 30, 2013 is classified as non-current in the Condensed Consolidated Balance Sheets.