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Mar. 31, 2020 |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | DEBT
The following table summarizes our debt as of
March 31, 2020
and
June 30, 2019
:
As of
March 31, 2020
, future minimum principal payments for our debt are
$25.0 million
in fiscal year 2024 and
$3.45 billion
after fiscal year 2024.
Senior Notes and Debt Redemption:
In February 2020, we issued
$750.0 million
(“2020 Senior Notes”), aggregate principal amount of senior, unsecured long-term notes under which the proceeds were used to redeem
$500.0 million
of Senior Notes due 2021, including associated redemption premiums, accrued interest and other fees and expenses, to repay borrowings of
$200.0 million
under the Revolving Credit Facility, and for other general corporate purpose. The redemption resulted in a pre-tax net loss on extinguishment of debt of
2250万美元
for the three months ended March 31, 2020.
In March 2019 and November 2014, we issued
$1.20 billion
and
$2.50 billion
, respectively (each, a “2019 Senior Notes”, a “2014 Senior Notes”, and collectively with the 2020 Senior Notes, the “Senior Notes”), aggregate principal amount of senior, unsecured long-term notes. In October 2019, we repaid
$250.0 million
of Senior Notes.
In February 2020, S&P upgraded its credit rating of the Company to “BBB+” and revised its outlook to stable, which permanently removed interest rate adjustments and the interest rate on the 2014 Senior Notes became fixed. The interest rate for each series of the 2020 Senior Notes and 2019 Senior Notes are not subject to adjustments.
In January 2020, we entered into a series of forward contracts (“2020 Rate Lock Agreements”) to lock the
30
-year treasury rate (“benchmark rate”)
on a portion of the 2020 Senior Notes. The 2020 Rate Lock Agreements had a notional amount of
$350.0 million
in aggregate and matured in the same quarter. The 2020 Rate Lock Agreements were terminated on the date of the pricing of the
$750.0 million
of
3.300%
Senior Notes due in 2050 and we recorded the fair value of
$21.5 million
as a loss within Accumulated Other Comprehensive Income (Loss) (“OCI”) as of March 31, 2020, which will be amortized over the life of the debt. During the fiscal year ended
June 30, 2018
,我们进入一系列远期合约(the “2018 Rate Lock Agreements”) to lock the benchmark interest rate with notional amount of
$500.0 million
in aggregate. In October 2014, we entered into a series of forward contracts to lock the
10
-year treasury rate (“benchmark rate”) on a portion of the 2014 Senior Notes with a notional amount of
$1.00 billion
in aggregate. For additional details on the forward contracts, refer to Note 16 “Derivative Instruments and Hedging Activities” of the Notes to the Condensed Consolidated Financial Statements.
The original discounts on the 2020 Senior Notes, the 2019 Senior Notes and the 2014 Senior Notes amounted to
$0.3 million
,
$6.7 million
and
$4.0 million
, respectively and are being amortized over the life of the debt. Interest is payable as follows: semi-annually on March 1 and September 1 of each year for the 2020 Senior Notes; semi-annually on March 15 and September 15 of each year for the 2019 Senior Notes; and semi-annually on May 1 and November 1 of each year for the 2014 Senior Notes. The indenture for the Senior Notes (the “Indenture”) includes covenants that limit our ability to grant liens on our facilities and enter into sale and leaseback transactions, subject to certain allowances under which certain sale and leaseback transactions are not restricted.
In certain circumstances involving a change of control followed by a downgrade of the rating of a series of Senior Notes by at least two of Moody’s, S&P and Fitch Inc., unless we have exercised our rights to redeem the Senior Notes of such series, we will be required to make an offer to repurchase all or, at the holder’s option, any part, of each holder’s Senior Notes of that series pursuant to the offer described below (the “Change of Control Offer”). In the Change of Control Offer, we will be required to offer payment in cash equal to
101%
of the aggregate principal amount of Senior Notes repurchased plus accrued and unpaid interest, if any, on the Senior Notes repurchased, up to, but not including, the date of repurchase.
Based on the trading prices of the Senior Notes on the applicable dates, the fair value of the Senior Notes as of
March 31, 2020
and
June 30, 2019
was approximately
$3.68 billion
and
$3.70 billion
, respectively. While the Senior Notes are recorded at cost, the fair value of the long-term debt was determined based on quoted prices in markets that are not active; accordingly, the long-term debt is categorized as Level 2 for purposes of the fair value measurement hierarchy.
As of
March 31, 2020
, we were in compliance with all of our covenants under the Indenture associated with the Senior Notes.
Revolving Credit Facility:
In November 2017, we entered into a Credit Agreement (the “Credit Agreement”) providing for a
$750.0 million
five
-year unsecured Revolving Credit Facility (the “Revolving Credit Facility”), which replaced our prior Credit Facility. Subject to the terms of the Credit Agreement, the Revolving Credit Facility may be increased in an amount up to
$250.0
million in the aggregate. In November 2018, we entered into an Incremental Facility, Extension and Amendment Agreement (the “Amendment”), which amends the Credit Agreement to (a) extend the Maturity Date (the “Maturity Date”) from
November 30, 2022
to
November 30, 2023
, (b) increase the total commitment by
$250.0 million
and (c) effect certain other amendments to the Credit Agreement as set forth in the Amendment. After giving effect to the Amendment, the total commitments under the Credit Agreement are
$1.00 billion
. During the second quarter of the fiscal year ending June 30, 2020, we borrowed
$250.0 million
from the Revolving Credit Facility and made a principal payment of
$25.0 million
within the same quarter. During the
third quarter of the fiscal year ending June 30, 2020, we made a principal payment of
$200.0 million
. As of March 31, 2020, we had outstanding
$25.0 million
aggregate principal amount of borrowings under the Revolving Credit Facility.
We may borrow, repay and reborrow funds under the Revolving Credit Facility until the Maturity Date, at which time such Revolving Credit Facility will terminate, and all outstanding loans under such facility, together with all accrued and unpaid interest, must be repaid. We may prepay outstanding borrowings under the Revolving Credit Facility at any time without a prepayment penalty.
Borrowings under the Revolving Credit Facility will bear interest, at our option, at either: (i) the Alternative Base Rate (“ABR”) plus a spread, which ranges from
0 bps
to
75 bps
, or (ii) the London Interbank Offered Rate (“LIBOR”) plus a spread, which ranges from
100 bps
to
175 bps
. The spreads under ABR and LIBOR are subject to adjustment in conjunction with credit rating downgrades or upgrades. We are also obligated to pay an annual commitment fee on the daily undrawn balance of the Revolving Credit Facility, which ranges from
10 bps
to
25 bps
, subject to an adjustment in conjunction with changes to our credit rating. As of
March 31, 2020
, we elected to pay interest on the borrowed amount under the Revolving Credit Facility at
LIBOR plus a spread of
112.5 bps
, and we pay an annual commitment fee of
12.5 bps
on the daily undrawn balance of the Revolving Credit Facility.
The Revolving Credit Facility requires us to maintain an interest expense coverage ratio as described in the Credit Agreement, on a quarterly basis, covering the trailing
four
consecutive fiscal quarters of
no
less than
3.50
to
1.00
. In addition, we are required to maintain the maximum leverage ratio as described in the Credit Agreement, on a quarterly basis of
3.00
to 1.00, covering the trailing
four
consecutive fiscal quarters for each fiscal quarter, which can be increased to
4.00
to 1.00 for a period of time in connection with a material acquisition or a series of material acquisitions. As of
March 31, 2020
, our maximum allowed leverage ratio was
3.50
to 1.00.
We were in compliance with all covenants under the Credit Agreement as ofMarch 31, 2020. |
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