Borrowing Facilities and Debt

3 Months Ended

Jan. 31, 2021

Revolving Credit Facilities

In February 2020, Applied entered into a five-year $1.5 billion committed unsecured revolving credit agreement (Revolving Credit Agreement) with a group of banks. The Revolving Credit Agreement includes a provision under which Applied may request an increase in the amount of the facility of up to $500 million for a total commitment of no more than $2.0 billion, subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The Revolving Credit Agreement is scheduled to expire in February 2025, unless extended as permitted under the Revolving Credit Agreement. The Revolving Credit Agreement provides for borrowings that bear interest for each advance at one of two rates selected by Applied, plus an applicable margin, which varies according to Applied’s public debt credit ratings.

No amounts were outstanding under the Revolving Credit Agreement as of January 31, 2021 and October 25, 2020.

In addition, Applied has revolving credit facilities with Japanese banks pursuant to which it may borrow up to approximately $77 million in aggregate at any time. Applied’s ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in Japanese yen. As of January 31, 2021 and October 25, 2020, no amounts were outstanding under these revolving credit facilities.

Term Loan and Short-term Commercial Paper

In August 2019, Applied entered into a term loan credit agreement (Term Loan Credit Agreement) with a group of lenders (Term Loan Lenders). Under the agreement, the lenders have committed to make an unsecured term loan to Applied of up to $2.0 billion to finance in part Applied’s planned acquisition of all outstanding shares of Kokusai Electric, to pay related transaction fees and expenses and for general corporate purposes. In December 2020, Applied entered into an amendment to the Term Loan Credit Agreement with the Term Loan Lenders which, among other things, (i) extends to April 30, 2021 the expiration date of the Lenders’ commitments to fund the term loan and (ii) provides that the Lenders’ commitments to fund the term loan shall terminate automatically if the SPA is terminated without the consummation of the transactions contemplated by the SPA. The term loan, if advanced, will bear interest at one of two rates selected by Applied, plus an applicable margin, which varies according to Applied’s public debt credit ratings, and must be repaid in full on the third anniversary of the funding date of the term loan. No amounts were outstanding under the Term Loan Credit Agreement at both January 31, 2021 and October 25, 2020.

Applied has a short-term commercial paper program under which Applied may issue unsecured commercial paper notes of up to a total amount of $1.5 billion. At January 31, 2021 and October 25, 2020, Applied did not have any commercial paper outstanding.

Senior Unsecured Notes

In May 2020, Applied issued $750 million aggregate principal amount of 1.750% senior unsecured notes due 2030 and $750 million aggregate principal amount of 2.750% senior unsecured notes due 2050, in a registered public offering. In June 2020, Applied used a portion of the net proceeds from the offering to redeem the outstanding $600 million in aggregate principal amount of its 2.625% senior unsecured notes due October 1, 2020 and $750 million in aggregate principal amount of its 4.300% senior unsecured notes due June 15, 2021, at a total aggregate redemption price of $1.4 billion. As a result, Applied recognized a $33 million loss on early extinguishment of these senior unsecured notes during the third quarter of fiscal 2020.

Debt outstanding as of January 31, 2021 and October 25, 2020 was as follows:


	Principal Amount
	January 31, 2021		October 25, 2020		Effective Interest Rate	Interest Pay Dates

	(In millions)





Long-term debt:



3.900% Senior Notes Due 2025	$	700	$	700	3.944%	April 1, October 1
3.300% Senior Notes Due 2027	1,200		1,200		3.342%	April 1, October 1
1.750% Senior Notes Due 2030	750		750		1.792%	June 1, December 1
5.100% Senior Notes Due 2035	500		500		5.127%	April 1, October 1
5.850% Senior Notes Due 2041	600		600		5.879%	June 15, December 15
4.350% Senior Notes Due 2047	1,000		1,000		4.361%	April 1, October 1
2.750% Senior Notes Due 2050	750		750		2.773%	June 1, December 1
	5,500		5,500
Total unamortized discount	(15)		(15)
Total unamortized debt issuance costs	(36)		(37)



Total long-term debt	$	5,449	$	5,448