Credit Facility and Long-Term Debt

Credit Facility

On June 29, 2012, we entered into a five-year $250 million unsecured revolving credit facility (the "Facility"). Under certain circumstances, upon our request and with the consent of the lenders, the commitments under the Facility may be increased up to an additional $250 million. Borrowings under the Facility will bear interest at a base rate determined in accordance with the Facility, plus an applicable margin based upon the debt rating of our non-credit enhanced, senior unsecured long-term debt. In addition, we are obligated to pay a quarterly commitment fee, payable in arrears, based on the available commitments. This facility fee varies and is also determined based on our debt rating. The terms of the Facility require compliance with certain financial and non-financial covenants, which we have satisfied as of December 31, 2013. As of December 31, 2013, we have not borrowed any funds under the Facility.

Long-Term Debt

The carrying values and associated effective interest rates for our Long-term debt was comprised of the following:



(In thousands, except rates)	Effective Interest Rate	December 31, 2013		December 31, 2012

2013 Senior Notes due November 15, 2018 at 2.50%	2.71%	$	596,920	$	—
2013 Senior Notes due November 15, 2023 at 4.10%	4.29%	395,056		—
2012 Senior Notes due May 15, 2017 at 1.75%	1.94%	499,490		500,000
Total long-term debt		$	1,491,466	$	500,000

On October 29, 2013, we issued $600 million aggregate principal amount of 2.50% senior notes (the “2.50% Notes”) and $400 million aggregate principal amount of 4.10% senior notes (the “4.10% Notes”) for general corporate purposes, including stock repurchases. We received net proceeds of $991.8 million, after deduction of a discount of $8.2 million, and we capitalized direct debt issuance costs of $5.5 million from issuance of the 2.5% Notes and the 4.10% Notes.

In 2012, we issued $500 million aggregate principal amount of 1.75% senior notes (the "1.75% Notes") to repay our outstanding credit facility. We received net proceeds of $499.2 million, after deduction of a discount of $0.8 million, and we capitalized direct debt issuance costs of $3.7 million from issuance of the 1.75% Notes.

All three of our senior notes (the “Notes”) pay a fixed rate of interest semiannually on May 15 and November 15 of each year. The Notes are governed by a base and supplemental indenture between Altera and U.S. Bank National Association, as trustee. The Notes are unsecured and unsubordinated obligations, ranking equally in right of payment to all of our existing and future unsecured and unsubordinated indebtedness and senior in right of payment to any of our future indebtedness that is expressly subordinated to the Notes. We may redeem the Notes, in whole or in part, at any time and from time to time for cash at the redemption prices described in the indentures.

The direct debt issuance costs associated with the Notes are recorded in Other assets, net in our consolidated balance sheets and are being amortized to Interest expense in our consolidated statements of comprehensive income over the contractual term using the effective interest method.

The carrying values of the Notes are reflected in our consolidated balance sheets as follows:



	2.50% Notes					4.10% Notes					1.75% Notes
(In thousands)	Dec. 31, 2013			Dec. 31, 2012		Dec. 31, 2013			Dec. 31, 2012		Dec. 31, 2013			Dec. 31, 2012

Principal amount	$	600,000		$	—	$	400,000		$	—	$	500,000		$	500,000
Unamortized discount	(3,080		)	—		(4,944		)	—		(510		)	—
Net carrying value	$	596,920		$	—	$	395,056		$	—	$	499,490		$	500,000

Interest expense related to the Notes were included in Interest expense in the consolidated statements of comprehensive income as follows:



(In thousands)	2013		2012

Contractual coupon interest	$	14,043	$	5,682
Amortization of debt issuance costs	1,114		648
Amortization of debt discount	343		102
Total interest expense related to the Notes	$	15,500	$	6,432

The other components of Interest expense in our consolidated statements of comprehensive income are interest expense incurred as part of the assumed debt in one of our 2013 Acquisitions, interest expense incurred as part of the former credit agreement dated August 31, 2007 which was paid in full in May 2012, bank service fees incurred in connection with our credit facility, and trustee service fees incurred in connection with the Notes.

As of December 31, 2013, future principal payments for the Notes were as follows:



Fiscal Year	Payable
	(In thousands)
2014	$	—
2015	—
2016	—
2017	500,000
2018 and thereafter	1,000,000
Total	$	1,500,000

Our Notes are classified within Level 1 of the fair value hierarchy and the estimated fair value of the Notes is based on quoted market prices. The estimated fair value of the Notes is as follows:



	2.50% Notes				4.10% Notes				1.75% Notes
(In thousands)	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2013		Dec. 31, 2012

Estimated fair value	$	598,836	$	—	$	392,680	$	—	$	501,310	$	512,200