Credit Facility and Long-Term Debt

Credit Facility

In 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 had satisfied as of June 26, 2015. As of June 26, 2015, we had not borrowed any funds under the Facility.

Long-term Debt

The carrying values and associated effective interest rates for our Long-term debt were as follows:



(In thousands, except rates)	Effective Interest Rate	June 26, 2015		December 31, 2014

2013 Senior Notes due November 15, 2018 at 2.50%	2.71%	$	597,876	$	597,557
2013 Senior Notes due November 15, 2023 at 4.10%	4.29%	395,810		395,559
2012 Senior Notes due May 15, 2017 at 1.75%	1.94%	499,720		499,643
Total long-term debt		$	1,493,406	$	1,492,759

In 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 stock repurchase and general corporate purposes. 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 2.50% 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.

The indentures governing the Notes contain certain covenants that limit our ability to create liens on certain assets to secure debt, to enter into sale and lease-back transactions, and to consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. As of June 26, 2015, we have satisfied all of our covenants contained in the indentures governing the Notes. Furthermore, we may redeem or be required to redeem the Notes, in whole or in part, for cash at the redemption prices described in the indentures. Upon the occurrence of certain events, which constitute a change in control triggering event as defined in the indentures, each holder of the Notes may require us to repurchase for cash all or a portion of such holder’s notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest. The Merger that was announced on June 1, 2015 does not constitute a change in control triggering event that would require us to redeem the Notes.

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)	June 26, 2015			December 31, 2014			June 26, 2015			December 31, 2014			June 26, 2015			December 31, 2014

Principal amount	$	600,000		$	600,000		$	400,000		$	400,000		$	500,000		$	500,000
Unamortized discount	(2,124		)	(2,443		)	(4,190		)	(4,441		)	(280		)	(357		)
Net carrying value	$	597,876		$	597,557		$	395,810		$	395,559		$	499,720		$	499,643

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



	Three Months Ended				Six Months Ended
(In thousands)	June 26, 2015		June 27, 2014		June 26, 2015		June 27, 2014

Contractual coupon interest	$	10,016	$	10,015	$	19,554	$	19,667
Amortization of debt issuance costs	455		456		911		911
Amortization of debt discount	324		323		647		647
Total interest expense related to the Notes	$	10,795	$	10,794	$	21,112	$	21,225

The other component of Interest expense in our consolidated statements of comprehensive income is interest expense related to bank service fees incurred in connection with our credit facility.

As of June 26, 2015, future principal payments for the Notes were as follows:



Fiscal Year	Payable
	(In thousands)
2015 (remaining six months)	$	—
2016	—
2017	500,000
2018	600,000
2019	—
2020 and after	400,000
Total	$	1,500,000

The Notes are measured at fair value on a quarterly basis for disclosure purposes. 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)	June 26, 2015		December 31, 2014		June 26, 2015		December 31, 2014		June 26, 2015		December 31, 2014

Estimated fair value	$	610,440	$	606,564	$	416,400	$	417,480	$	502,320	$	501,460