7. Long-Term Debt

Long-term debt consists of the following:



	June 30, 2015										March 31, 2015
	Carrying Value		Fair Value Hedge Adjustment			Unamortized Discount (Premium)			Maturity Amount		Carrying Value
2.7% Senior Notes due July 2019	$	254,045	$	(4,487	)	$	442		$	250,000	$	254,993
3.95% Senior Notes due July 2024	249,589		—			411			250,000		249,577
5.625% Senior Notes due January 2044	553,488		—			(3,488		)	550,000		553,519
Total	$	1,057,122	$	(4,487	)	$	(2,635	)	$	1,050,000	$	1,058,089

As of June 30, 2015, $250,000 of long-term debt matures in fiscal 2020, and $800,000 matures thereafter.

At June 30, 2015, the estimated fair value of long-term debt was approximately $1,077,423, including $254,487 for the 2.7% Senior Notes due July 2019 (the "2019 Notes") which are carried at an amount that approximates fair value in the Consolidated Balance Sheets. The debt fair value was estimated using publicly quoted market prices and was classified as Level 2 in the fair value hierarchy.

Interest Rate Swap

On June 23, 2014, Legg Mason entered into an interest rate swap contract with a financial intermediary with a notional amount of $250,000, which was designated as a fair value hedge. The interest rate swap is being used to effectively convert the 2019 Notes from fixed rate debt to floating rate debt and has identical terms as the underlying debt being hedged, so no ineffectiveness is expected. The swap has a five-year term, and matures on July 15, 2019. The fair value of the contract at June 30, 2015 and March 31, 2015, was a derivative asset of $4,487 and $5,462, respectively, classified as Other assets in the Consolidated Balance Sheets. The decrease of $975 for the three months ended June 30, 2015, reflects a loss on hedging activity which was recorded as Other expense (loss on hedging activity) in the Consolidated Statement of Income. The carrying value of the debt in the Consolidated Balance Sheets was likewise increased by $4,487 and $5,462 as of June 30, 2015 and March 31, 2015, respectively. The decrease of $975 for the three months ended June 30, 2015, reflects a gain on hedging activity which was recorded as Other income (gain on hedging activity) in the Consolidated Statement of Income. For the three months ended June 30, 2014, a gain on hedging activity of $747 related to the fair value adjustment on the derivative asset and a corresponding loss on hedging activity of $747 related to the fair value adjustment on the debt were recognized. The related hedging gains and losses offset one another resulting in no net income or loss impact. The swap payment dates coincide with the debt payment dates on July 15 and January 15. The related receipts/payments by Legg Mason are recorded as Interest expense in the Consolidated Statement of Income. Since the original terms and conditions of the hedged instruments are unchanged, the swap continues to be an effective fair value hedge.

Reverse Treasury Rate Lock

On June 23, 2014, Legg Mason entered into a reverse treasury rate lock contract with a financial intermediary with a notional amount of $650,000, which was designated as a cash flow hedge. The contract was issued in connection with the retirement of Legg Mason's 5.5% Senior Notes and had a contractual termination date of July 18, 2014. The Company entered into the reverse treasury rate lock agreement in order to hedge the variability in the retirement payment on the entire principal amount of debt. The reverse treasury rate lock contract effectively fixed the present value of the forecasted debt make-whole payment, to eliminate risk associated with change in the five-year U.S. treasury yield. For the three months ended June 30, 2014, a gain of $773 (net of deferred taxes of $495) was recorded in Accumulated other comprehensive income, net, in the Consolidated Balance Sheet. There was no material ineffectiveness related to this cash flow hedge at June 30, 2014.