Debt

3 Months Ended

Apr. 03, 2021

Debt

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


	April 3, 2021		December 31, 2020
5.125% notes, due March 2021	$	—	$	130,836
3.50% notes, due April 2022	349,129		—

Other short-term borrowings	12,198		27,797
	$	361,327	$	158,633

Other short-term borrowings are primarily utilized to support working capital requirements. The weighted-average interest rate on these borrowings was 2.09% and 1.73% at April 3, 2021 and December 31, 2020, respectively.

The company has $200,000 in uncommitted lines of credit. There were no outstanding borrowings under the uncommitted lines of credit at April 3, 2021 and December 31, 2020. These borrowings are 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 1.50% and 1.53% at April 3, 2021 and December 31, 2020, 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 April 3, 2021 and December 31, 2020. The program had a weighted-average effective interest rate of .26% and .30% at April 3, 2021 and December 31, 2020, respectively.

Long-term debt consists of the following:


	April 3, 2021		December 31, 2020
Revolving credit facility	$	55,000	$	—
North American asset securitization program	100,000		—
3.50% notes, due 2022	—		348,918
4.50% notes, due 2023	298,844		298,701
3.25% notes, due 2024	496,287		496,034
4.00% notes, due 2025	347,161		346,999
7.50% senior debentures, due 2027	109,960		109,939
3.875% notes, due 2028	495,371		495,223
Other obligations with various interest rates and due dates	1,225		2,126
	$	1,903,848	$	2,097,940

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:


	April 3, 2021		December 31, 2020



3.50% notes, due 2022	$	—	$	360,500
4.50% notes, due 2023	318,000		321,500
3.25% notes, due 2024	535,000		540,500
4.00% notes, due 2025	377,000		383,000
7.50% senior debentures, due 2027	138,000		140,000
3.875% notes, due 2028	543,000		564,000

The carrying amount of the company’s short-term borrowings in various countries, revolving credit facility, 3.50% notes due April 2022, 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 April 3, 2021), which is based on the company’s credit ratings, or an effective interest rate of 1.25% at April 3, 2021. The facility fee, which is based on the company’s credit ratings, was .20% of the total borrowing capacity at April 3, 2021. The company had $55,000 in outstanding borrowings under the revolving credit facility at April 3, 2021 and no outstanding borrowings under the revolving credit facility at December 31, 2020.

The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. In March 2021, the company amended its asset securitization program and, among other things, increased its borrowing capacity from $1,200,000 to $1,250,000 and extended its term to mature in March 2024. 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 (.45% at April 3, 2021), or an effective interest rate of .52% at April 3, 2021. The facility fee is .40% of the total borrowing capacity.

The company had $100,000 in outstanding borrowings under the North American asset securitization program at April 3, 2021 and no outstanding borrowings under the North American asset securitization program at December 31, 2020, which was included in “Long-term debt” in the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $1,874,800 and $2,207,700 were held by AFC and were included in “Accounts receivable, net” in the

company’s consolidated balance sheets at April 3, 2021 and December 31, 2020, 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 April 3, 2021, the company was in compliance with all such financial covenants.

During March 2021, the company repaid $130,860 principal amount of its 5.125% notes due March 2021.

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 $4,106 and $9,965 for the first quarter of 2021 and 2020, respectively.