Debt and Credit Facility

2017 Convertible Notes

As of June 28, 2014, the Company had $600.0 million principal amount of 2017 Convertible Notes outstanding. The 2017 Convertible Notes are senior in right of payment to the Company’s existing and future unsecured indebtedness that is expressly subordinated in right of payment to the 2017 Convertible Notes, and are ranked equally with all of our other existing and future unsecured senior indebtedness, including the 2019 and 2021 Notes discussed below. The Company may not redeem the 2017 Convertible Notes prior to maturity.

The 2017 Convertible Notes are convertible, subject to certain conditions, into shares of Xilinx common stock at a conversion rate of 33.7391 shares of common stock per $1 thousand principal amount of the 2017 Convertible Notes, representing an effective conversion price of approximately $29.64 per share of common stock. The conversion rate is subject to adjustment for certain events as outlined in the indenture governing the 2017 Convertible Notes, but will not be adjusted for accrued interest. One of the conditions allowing holders of the 2017 Convertible Notes to convert during any fiscal quarter is if the last reported sale price of the Company's common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day. This condition was met as of June 28, 2014 and as a result, the 2017 Convertible Notes were convertible at the option of the holders. As of June 28, 2014, the 2017 Convertible Notes were classified as a current liability on the Company's condensed consolidated balance sheet. Additionally, a portion of the equity component attributable to the conversion feature of the 2017 Convertible Notes was classified in temporary stockholders' equity. The amount classified as temporary equity was equal to the difference between the principal amount and carrying value of the 2017 Convertible Notes.

Upon conversion, the Company would pay the holders of the 2017 Convertible Notes cash up to the aggregate principal amount of the 2017 Convertible Notes. If the conversion value exceeds the principal amount, the Company would deliver shares of its common stock in respect to the remainder of its conversion obligation in excess of the aggregate principal amount (conversion spread). Accordingly, there would be no adjustment to the numerator in the net income per common share computation for the cash settled portion of the 2017 Convertible Notes, as that portion of the debt liability will always be settled in cash. The conversion spread will be included in the denominator for the computation of diluted net income per common share, using the treasury stock method.

The carrying values of the liability and equity components of the 2017 Convertible Notes are reflected in the Company’s condensed consolidated balance sheets as follows:



(In thousands)	June 28, 2014			March 29, 2014
Liability component:
Principal amount of the 2017 Convertible Notes	$	600,000		$	600,000
Unamortized discount of liability component	(45,337		)	(49,223		)
Hedge accounting adjustment – sale of interest rate swap	13,101			14,224
Net carrying value of the 2017 Convertible Notes	$	567,764		$	565,001

Equity component (including temporary equity) – net carrying value	$	66,415		$	66,415

The remaining unamortized debt discount, net of the hedge accounting adjustment from the previous sale of the interest rate swap, is being amortized as additional non-cash interest expense over the expected remaining term of the 2017 Convertible Notes. As of June 28, 2014, the remaining term of the 2017 Convertible Notes is 2.9 years.

Interest expense related to the 2017 Convertible Notes was included in interest and other expense, net on the condensed consolidated statements of income as follows:



	Three Months Ended
(In thousands)	June 28, 2014		June 29, 2013
Contractual coupon interest	$	3,938	$	3,938
Amortization of debt issuance costs	362		362
Amortization of debt discount, net	2,763		2,763
Total interest expense related to the 2017 Convertible Notes	$	7,063	$	7,063

To hedge against potential dilution upon conversion of the 2017 Convertible Notes, the Company purchased call options on its common stock from the hedge counterparties. The call options give the Company the right to purchase up to 20.2 million shares of its common stock at $29.64 per share. The call options will terminate upon the earlier of the maturity of the 2017 Convertible Notes or the last day any of the 2017 Convertible Notes remain outstanding. To reduce the hedging cost, under separate transactions the Company sold warrants to the hedge counterparties, which give the hedge counterparties the right to purchase up to 20.2 million shares of the Company’s common stock at $41.99 per share. These warrants expire on a gradual basis over a specified period starting on September 13, 2017.

2019 and 2021 Notes

On March 12, 2014, the Company issued $500.0 million principal amount of 2019 Notes and $500.0 million principal amount of 2021 Notes with maturity dates of March 15, 2019 and March 15, 2021 respectively. The 2019 and 2021 Notes were offered to the public at a discounted price of 99.477% and 99.281% of par, respectively. Interest on the 2019 and 2021 Notes is payable semiannually on March 15 and September 15.

The Company received net proceeds of $990.1 million from issuance of the 2019 and 2021 Notes, after the debt discounts and deduction of debt issuance costs. The debt discounts and issuance costs are amortized to interest expense over the terms of the 2019 and 2021 Notes.

The following table summarizes the carrying value of the 2019 and 2021 Notes as of June 28, 2014 and March 29, 2014:




(In thousands)	June 28, 2014			March 29, 2014
Principal amount of the 2019 Notes	$	500,000		$	500,000
Unamortized discount of the 2019 Notes	(2,449		)	(2,574		)
Principal amount of the 2021 Notes	500,000			500,000
Unamortized discount of the 2021 Notes	(3,441		)	(3,556		)
Total carrying value	$	994,110		$	993,870

Interest expense related to the 2019 and 2021 Notes was included in interest and other expense, net on the condensed consolidated statements of income as follows:



	Three Months Ended
(In thousands)	June 28, 2014		June 29, 2013
Contractual coupon interest	$	6,406	$	—
Amortization of debt issuance costs	156		—
Amortization of debt discount, net	240		—
Total interest expense related to the 2019 and 2021 Notes	$	6,802	$	—

Revolving Credit Facility

On December 7, 2011, the Company entered into a $250.0 million senior unsecured revolving credit facility with a syndicate of banks (expiring in December 2016). Borrowings under the credit facility will bear interest at a benchmark rate plus an applicable margin based upon the Company’s credit rating. In connection with the credit facility, the Company is required to maintain certain financial and nonfinancial covenants. As of June 28, 2014, the Company had made no borrowings under this credit facility and was not in violation of any of the covenants.