Debt

6 Months Ended

Oct. 02, 2020

The following table summarizes components of our debt:


(In millions, except percentages)	October 2, 2020		April 3, 2020		Effective Interest Rate
4.2% Senior Notes due September 15, 2020	$	—	$	750	4.25	%
New 2.5% Convertible Senior Notes due April 1, 2022	250		250		2.63	%
3.95% Senior Notes due June 15, 2022	400		400		4.05	%
2.0% Convertible Senior Notes due August 15, 2022	—		625		2.66	%
New 2.0% Convertible Senior Notes due August 15, 2022	625		625		2.62	%
Term Loan due November 4, 2024	500		500		LIBOR plus (1)
Delayed Draw Term Loan due November 4, 2024	750		—		LIBOR plus (1)
5.0% Senior Notes due April 15, 2025	1,100		1,100		5.23	%
Total principal amount	3,625		4,250
Less: unamortized discount and issuance costs	(22)		(29)
Total debt	3,603		4,221
Less: current portion	(47)		(756)
Total long-term debt	$	3,556	$	3,465

(1)The term loans bear interest at a rate equal to the London Interbank Offered Rate (LIBOR) plus a margin based either on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt or consolidated adjusted leverage as defined in the underlying loan agreement. The interest rates for the outstanding term loans are as follows:


	October 2, 2020		April 3, 2020
Term Loan due November 4, 2024	1.56	%	2.88	%
Delayed Draw Term Loan due November 4, 2024	1.56	%	N/A

As of October 2, 2020, the future contractual maturities of debt by fiscal year are as follows:


(In millions)
Remainder of 2021	$	16
2022	312
2023	1,088
2024	62
2025	1,047
Thereafter	1,100
Total future maturities of debt	$	3,625

Repayments of Convertible Senior Notes

In February 2020, we exchanged $250 million of our 2.5% Convertible Notes and $625 million of our 2.0% Convertible Notes for new convertible notes of the same principal amounts and certain cash consideration. In May 2020, we settled the $625 million principal and conversion rights of the 2.0% Convertible Senior Notes in cash. The aggregate settlement amount of $1,179 million was based on $19.25 per underlying share into which the 2.0% Convertible Notes were convertible. In addition, we paid $3

million of accrued and unpaid interest through the date of settlement. The repayments resulted in an adjustment to stockholders’ equity of $581 million and a gain on extinguishment of $20 million.

As of October 2, 2020 and April 3, 2020, the Convertible Senior Notes consisted of the following:


	October 2, 2020				April 3, 2020
(In millions)	New 2.5% Convertible Notes		New 2.0% Convertible Notes		New 2.5% Convertible Notes		New 2.0% Convertible Notes		2.0% Convertible Notes
Liability components:
Principal	$	250	$	625	$	250	$	625	$	625
Unamortized discount and issuance costs	—		(7)		(1)		(9)		(6)
Net carrying amount	$	250	$	618	$	249	$	616	$	619

Equity component net of tax	$	43	$	56	$	43	$	56	$	12

Based on the closing price of our common stock of $20.56 on October 2, 2020, the if-converted value of the New 2.5% Convertible Notes and the New 2.0% Convertible Notes exceeded the principal amount by approximately $57 million and $4 million, respectively.

The following table sets forth total interest expense recognized related to our Convertible Senior Notes:


	Three Months Ended				Six Months Ended
(In millions)	October 2, 2020		October 4, 2019		October 2, 2020		October 4, 2019
Contractual interest expense	$	4	$	9	$	10	$	19
Amortization of debt discount and issuance costs	$	1	$	4	$	2	$	8
Payments in lieu of conversion price adjustments (1)	$	3	$	—	$	5	$	—

(1) Payments in lieu of conversion price adjustments consist of amounts paid to holders of the Convertible Senior Notes when our quarterly dividend to our common stockholders exceeds the amounts defined in the Convertible Senior Notes agreements.

Delayed draw term loan

On September 14, 2020, we drew a term loan of $750 million (the Delayed Draw Term Loan) under an existing credit facility agreement. The Delayed Draw Term Loan bears interest at LIBOR, as adjusted for statutory reserves, plus a margin ranging from 1.125% to 1.75%. The principal amount of the Delayed Draw Term Loan is repayable in quarterly installments on the last business day of each calendar quarter, commencing with the quarter ended March 31, 2021 in an amount equal to 1.25% of the aggregate principal amount that was outstanding immediately after the borrowings of the Delayed Draw Term Loan and in the outstanding principal amount upon the November 2024 maturity date. We may voluntarily repay outstanding principal balances without penalty.

Repayments of Senior Notes

On September 15, 2020, we fully repaid the principal and accrued interest under the 4.2% Senior Notes due September 2020, which had an aggregate principal amount outstanding of $750 million.

Revolving credit facility

We have a revolving line of credit of $1,000 million through November 2024. Borrowings under the revolving line of credit bear interest at a floating rate based on our debt ratings and our consolidated leverage ratios. The unused revolving line of credit is subject to a commitment fee ranging from 0.125% to 0.30% per annum. As of October 2, 2020 and April 3, 2020, there were no borrowings outstanding under our revolving credit facilities.

Debt covenant compliance

Our term loan and revolving credit facility agreement contains customary representations and warranties, non-financial covenants for financial reporting, affirmative and negative covenants, including a covenant that we maintain a consolidated leverage ratio of not more than 5.25 to 1.0, or 5.75 to 1.0 if we acquire assets or business in an aggregate amount greater than $250 million, and restrictions on indebtedness, liens, investments, stock repurchases, and dividends (with exceptions permitting our regular quarterly dividend and other specific capital returns). As of October 2, 2020, we were in compliance with all debt covenants.