Debt

9 Months Ended

Sep. 26, 2020

Debt

Short-term borrowings, including current portion of long-term debt, consists of the following:


	September 26, 2020		December 31, 2019
6.00% notes, due April 2020	$	—	$	209,322
5.125% notes, due March 2021	130,800		—
Borrowings on lines of credit	—		60,000
Other short-term borrowings	35,328		62,109
	$	166,128	$	331,431

Other short-term borrowings are primarily utilized to support working capital requirements. The weighted-average interest rate on these borrowings was 2.12% and 2.76% at September 26, 2020 and December 31, 2019, respectively.

The company has $200,000 in uncommitted lines of credit. There were no outstanding borrowings under the uncommitted lines of credit at September 26, 2020. There were $60,000 of outstanding borrowings under the uncommitted lines of credit at December 31, 2019. These borrowings were provided on a short-term basis and the maturity is agreed upon between the

company and the lender. The lines had a weighted-average effective interest rate of 1.53% and 2.61% at September 26, 2020 and December 31, 2019, respectively.

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1,200,000. The company had no outstanding borrowings under this program at September 26, 2020 and December 31, 2019. The program had a weighted-average effective interest rate of 2.01% and 2.24% at September 26, 2020 and December 31, 2019, respectively.

Long-term debt consists of the following:


	September 26, 2020		December 31, 2019
Revolving credit facility	$	—	$	10,000
North American asset securitization program	—		400,000
5.125% notes, due 2021	—		130,691
3.50% notes, due 2022	348,707		348,088
4.50% notes, due 2023	298,560		298,148
3.25% notes, due 2024	495,784		495,045
4.00% notes, due 2025	346,839		346,368
7.50% senior debentures, due 2027	109,919		109,857
3.875% notes, due 2028	495,077		494,648
Other obligations with various interest rates and due dates	2,855		7,284
	$	2,097,741	$	2,640,129

The 7.50% senior debentures are not redeemable prior to their maturity. All other notes may be called at the option of the company subject to “make whole” clauses.

The estimated fair market value of long-term debt, using quoted market prices, is as follows:


	September 26, 2020		December 31, 2019



3.50% notes, due 2022	$	362,000	$	358,500
4.50% notes, due 2023	320,500		316,000
3.25% notes, due 2024	539,500		515,500
4.00% notes, due 2025	378,000		367,000
7.50% senior debentures, due 2027	130,000		135,000
3.875% notes, due 2028	554,000		516,500

The carrying amount of the company’s short-term borrowings in various countries, revolving credit facility, 5.125% notes due March 2021, North American asset securitization program, commercial paper, and other obligations approximate their fair value.

The company has a $2,000,000 revolving credit facility maturing in December 2023. This facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company’s commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or a Eurocurrency rate plus a spread (1.18% at September 26, 2020), which is based on the company’s credit ratings, or an effective interest rate of 1.26% at September 26, 2020. The facility fee, which is based on the company’s credit ratings, was .20% of the total borrowing capacity at September 26, 2020. The company had no outstanding borrowings and $10,000 in outstanding borrowings under the revolving credit facility at September 26, 2020 and December 31, 2019, respectively.

The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $1,200,000 under the program, which matures in June 2021. The program is

conducted through Arrow Electronics Funding Corporation (“AFC”), a wholly-owned, bankruptcy remote subsidiary. The North American asset securitization program does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company’s consolidated balance sheets. Interest on borrowings is calculated using a base rate or a commercial paper rate plus a spread (.40% at September 26, 2020), or an effective interest rate of .58% at September 26, 2020. The facility fee is .40% of the total borrowing capacity.

At September 26, 2020, the company had no outstanding borrowings under the North American asset securitization program. At December 31, 2019, the company had $400,000 in outstanding borrowings under the North American asset securitization program, which was included in “Long-term debt” in the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $1,964,300 and $2,217,800 were held by AFC and were included in “Accounts receivable, net” in the company’s consolidated balance sheets at September 26, 2020 and December 31, 2019, respectively. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings before repayment of any outstanding borrowings under the North American asset securitization program.

Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of September 26, 2020, the company was in compliance with all such financial covenants.

During April 2020, the company repaid $209,366 principal amount of its 6.00% notes due April 2020.

In the normal course of business, certain of the company’s subsidiaries have agreements to sell, without recourse, selected trade receivables to financial institutions. The company does not retain financial or legal interests in these receivables, and, accordingly they are accounted for as sales of the related receivables and the receivables are removed from the company’s consolidated balance sheets.

Interest and other financing expense, net, includes interest and dividend income of $4,673 and $18,099 for the third quarter and first nine months of 2020, respectively. Interest and other financing expense, net, includes interest and dividend income of $13,501 and $42,038 for the third quarter and first nine months 2019, respectively.