Debt and Financing Activities

Information regarding long-term debt is as follows:



	March 31,
(In millions)	2015			2014
Denominated in U.S. Dollars
Floating Rate Notes due September 10, 2015	$	400		$	400
0.95% Notes due December 4, 2015	500			499
3.25% Notes due March 1, 2016	600			599
5.70% Notes due March 1, 2017	500			500
1.29% Notes due March 10, 2017	700			700
1.40% Notes due March 15, 2018	499			499
7.50% Notes due February 15, 2019	349			349
2.28% Notes due March 15, 2019	1,100			1,100
4.75% Notes due March 1, 2021	599			598
2.70% Notes due December 15, 2022	400			400
2.85% Notes due March 15, 2023	400			400
3.80% Notes due March 15, 2024	1,100			1,100
7.65% Debentures due March 1, 2027	175			175
6.00% Notes due March 1, 2041	493			493
4.88% Notes due March 15, 2044	800			800
Other	26			27
Denominated in Euro and other foreign currencies
4.00% Bonds due October 18, 2016	388			507
4.50% Bonds due April 26, 2017	563			737
Promissory Notes	—			297
Bank liabilities and other	117			166
Total debt	9,709			10,346
Less current portion	(1,529		)	(1,417		)
Total long-term debt	$	8,180		$	8,929

Long-Term Debt

On March 5, 2014, we issued floating rate notes due September 10, 2015 in an aggregate principal amount of $400 million (“Floating Rate Notes”), 1.29% notes due March 10, 2017 in an aggregate principal amount of $700 million (“2017 Notes”), 2.28% notes due March 15, 2019 in an aggregate principal amount of $1,100 million (“2019 Notes”), 3.80% notes due March 15, 2024 in an aggregate principal amount of $1,100 million (“2024 Notes”) and 4.88% notes due March 15, 2044 in an aggregate principal amount of $800 million (“2044 Notes”). The Floating Rate Notes bear interest at a floating rate equal to the three-month London Interbank Offered Rate plus 0.40% (0.66% at March 31, 2015) with interest payable quarterly on March 10, June 10, September 10 and December 10 of each year. Interest on the 2017 Notes is payable on March 10 and September 10 of each year. Interest on the 2019 Notes, the 2024 Notes and the 2044 Notes is payable on March 15 and September 15 of each year. We utilized the net proceeds from the issuance of these notes (each note constitutes a “Series”) of $4,068 million, net of discounts and offering expenses, to repay the borrowings under our 2014 Bridge Loan, as further described below.

On March 8, 2013, we issued 1.40% notes due March 15, 2018 in an aggregate principal amount of $500 million and 2.85% notes due March 15, 2023 in an aggregate principal amount of $400 million. Interest on these notes is payable on March 15 and September 15 of each year. We utilized the net proceeds from the issuance of these notes (each note constitutes a “Series”) of $891 million, net of discounts and offering expenses, to repay the borrowings under our 2013 Bridge Loan, as further described below.

On December 4, 2012, we issued 0.95% notes due December 4, 2015 in an aggregate principal amount of $500 million (“2015 Notes”) and 2.70% notes due December 15, 2022 in an aggregate principal amount of $400 million (“2022 Notes”). Interest on the 2015 Notes is payable on June 4 and December 4 of each year and interest on the 2022 Notes is payable on June 15 and December 15 of each year. We utilized the net proceeds from the issuance of these notes (each note constitutes a “Series”) of $892 million, net of discounts and offering expenses, for general corporate purposes and replenishing working capital that was used to repay long-term debt that matured.

Each Series constitutes an unsecured and unsubordinated obligation of the Company and ranks equally with all of the Company’s existing and, from time-to-time, future unsecured and unsubordinated indebtedness outstanding. Each Series is governed by materially similar indentures and officers’ certificate specifying certain terms of each Series. With the exception of the Floating Rate Notes, upon 30 days notice to holders of a Series, we may redeem that Series at any time prior to maturity, in whole or in part, for cash at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the indenture and officers’ certificate relating to that Series. In the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of a Series below an investment grade rating by each of Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services within a specified period, an offer must be made to purchase that Series from the holders at a price in cash equal to 101% of the then outstanding principal amount of that Series, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture and the related officers’ certificate for each Series, subject to the exceptions and in compliance with the conditions as applicable, specify that we may not incur liens, enter into sale and leaseback transactions or consolidate, merge or sell all or substantially all of our assets. The indentures also contain customary events of default provisions.

We also have Euro-denominated corporate bonds consisting of 4.00% bonds due October 18, 2016 and 4.50% bonds due April 26, 2017. Interest on these bonds is due annually each year. At March 31, 2015 and 2014, $388 million and $507 million of the 4.00% bonds and $563 million and $737 million of the 4.50% bonds, for a total of $951 million and $1,244 million, were outstanding. At March 31, 2014, these bonds were classified within current liabilities as bondholders had the option to redeem the bonds at par value plus accrued interest. This redemption option expired during the first quarter of 2015 and the remaining bonds outstanding will mature according to their respective maturity dates. Accordingly, these bonds were reclassified as long-term debt effective in the first quarter of 2015.

We also have a Euro-denominated term loan due December 15, 2019 with a current variable interest rate of 1.93%. At March 31, 2015 and 2014, the outstanding balance of the term loan was $89 million and $100 million. At March 31, 2014, we also had $297 million in Euro-denominated promissory notes outstanding which were all repaid during 2015.

In 2014, we repaid our $350 million 6.50% Notes due February 15, 2014 and in 2013, we repaid our $500 million 5.25% Notes due March 1, 2013. In 2013, we also repaid the debt we assumed in connection with our acquisition of PSSI comprised of 6.375% Senior Notes due 2022 and 3.125% Senior Convertible Notes due 2014 for $643 million including accrued interest using cash on hand and borrowings under our 2013 Bridge Loan, as further described below.

Scheduled future payments of long-term debt are $1,529 million in 2016, $1,619 million in 2017, $1,086 million in 2018, $1,474 million in 2019, $19 million in 2020 and $3,982 million thereafter.

Senior Bridge Term Loan Facilities

In connection with our acquisition of Celesio, in January 2014, we entered into a $5.5 billion 364‑day unsecured Senior Bridge Term Loan Agreement (the “2014 Bridge Loan”) under terms substantially similar to those in our existing revolving credit facility. On February 4, 2014, we borrowed $4,957 million under this facility with such proceeds and cash on hand used to fund the acquisition of Celesio. On March 10, 2014, we repaid $4,076 million of the 2014 Bridge Loan borrowings with funds obtained from the issuance of long-term debt. On March 11, 2014, we repaid the remaining balance of the 2014 Bridge Loan borrowings using funds drawn on our Accounts Receivable Sales Facility and cash on hand. On April 30, 2014, the commitments under the 2014 Bridge Loan automatically terminated upon the settlement of the tender offers for the remaining common shares of Celesio. During the time it was outstanding, the 2014 Bridge Loan borrowings bore interest at 1.39% per annum, based on the London Interbank Offered Rate plus a margin based on the Company’s credit rating. Interest expense for 2014 included a total of $46 million of fees related to the 2014 Bridge Loan and a bridge loan agreement entered into during the third quarter of 2014 in anticipation of an earlier acquisition of Celesio.

In connection with our acquisition of PSSI, in December 2012, we entered into a $2.1 billion unsecured Senior Bridge Term Loan Agreement (“2013 Bridge Loan”). In February 2013, we reduced the 2013 Bridge Loan commitment to $900 million. On February 22, 2013, we borrowed $900 million under the 2013 Bridge Loan with such proceeds and cash on hand used to redeem the assumed debt from PSSI and pay the equity shareholders of PSSI. On March 8, 2013, we repaid the 2013 Bridge Loan borrowings with funds obtained from the issuance of long-term debt and the bridge loan agreement was subsequently terminated. During the time it was outstanding, the 2013 Bridge Loan borrowings bore interest at 1.20% per annum, based on the London Interbank Offered Rate plus a margin based on the Company’s credit rating. Interest expense for 2013 included $11 million of fees related to the 2013 Bridge Loan.

Accounts Receivable Facilities

In November 2014, we extended our existing Accounts Receivable Sales Facility (the “Facility”) for a two-year period under terms substantially similar to those previously in place. The committed balance of the Facility is $1.35 billion, although from time-to-time, the available amount of the Facility may be less than $1.35 billion based on accounts receivable concentration limits and other eligibility requirements. The Facility will expire in November 2016.

In 2015, 2014 and 2013, we borrowed nil, $550 million and $1,325 million under the Facility and we repaid nil, $550 million and $1,725 million. At March 31, 2015 and 2014, there were no secured borrowings and related securitized accounts receivable outstanding under the Facility.

The Facility contains requirements relating to the performance of the accounts receivable and covenants relating to the Company. If we do not comply with these covenants, our ability to use the Facility may be suspended and repayment of any outstanding balances under the Facility may be required. At March 31, 2015 and 2014, we were in compliance with all financial covenants.

We also have Accounts Receivable Factoring Facilities (the “Factoring Facilities”) denominated in foreign currencies with a total committed balance of $169 million. Transactions under these facilities are accounted for as secured borrowings and have interest rates ranging from 0.85% to 1.26%. These facilities will expire through January 2016 and we may renew certain facilities before their expiration. During the 2015 and 2014, we borrowed $2,875 million and $570 million and repaid $2,908 million and $575 million in short-term borrowings under these facilities. At March 31, 2015 and 2014, there were $135 million and $246 million in secured borrowings and related accounts receivable outstanding under these facilities, which are included in short-term borrowings and receivables in our consolidated balance sheet.

Revolving Credit Facilities and Lines of Credit

We have a syndicated $1.3 billion five-year senior unsecured revolving credit facility, which expires in September 2016. Borrowings under this credit facility bear interest based upon either the London Interbank Offered Rate or a prime rate. There were no borrowings under this credit facility during 2015, 2014 and 2013. As of March 31, 2015 and 2014, there were no borrowings outstanding under this credit facility.

We also have a syndicated €500 million five-year senior unsecured revolving credit facility, which expires in February 2018. Borrowings under this facility bear interest based upon the Euro Interbank Offered Rate plus an agreed margin. During 2015 and 2014, there were no borrowings under this facility and no amounts outstanding as of March 31, 2015 and 2014.

We also maintain bilateral credit lines primarily denominated in Euros with a total committed and uncommitted balance of $1.4 billion. These credit lines have interest rates ranging from 0.20% to 6.00% with interest payable monthly. During 2015, we borrowed $225 million and repaid $267 million under these credit lines primarily related to short‑term borrowings. Borrowings and repayments during 2014 were not material. As of March 31, 2015 and 2014, there were $29 million and $65 million outstanding under these credit lines.

Commercial Paper: There were no commercial paper issuances during 2015, 2014 and 2013 and no amounts outstanding at March 31, 2015 and 2014.

Debt Covenants: Our various borrowing facilities and long-term debt are subject to certain covenants. Our principal debt covenant is our debt to capital ratio under our $1.3 billion unsecured revolving credit facility, which cannot exceed 65%. For the purpose of calculating this ratio, borrowings under the $1.35 billion Accounts Receivable Sales Facility are excluded. If we exceed this ratio, repayment of debt outstanding under the revolving credit facility could be accelerated. As of March 31, 2015, we were in compliance with our financial covenants.