Borrowings | 9 Months Ended |
Mar. 31, 2014 |
Debt Disclosure [Abstract] | ' |
Borrowings | ' |
BORROWINGS |
Borrowings consisted of the following: |
|
| | | | | | | | |
(in millions) | | March 31, | | June 30, |
2014 | 2013 |
Senior Notes due 2014, 5.125% Less Unamortized Discount of $0.7 million at March 31, 2014 and $1.8 million at June 30, 2013, Effective Rate 5.49% | | $ | 449 | | | $ | 448 | |
|
Senior Notes due 2019, 6.375% Less Unamortized Discount of $9.9 million at March 31, 2014 and $11.0 million at June 30, 2013, Effective Rate 6.69% | | 690 | | | 689 | |
|
Senior Notes due 2023, 3.300% Less Unamortized Discount of $2.0 million at March 31, 2014 and $2.2 million at June 30, 2013, Effective Rate 3.39% | | 298 | | | 298 | |
|
Euro Denominated Debt, Interest Averaging 3.52% at March 31, 2014 and 3.53% at June 30, 2013, Due in Varying Installments through 2020 | | 10 | | | 11 | |
|
Other Obligations; Interest Averaging 6.45% at March 31, 2014 and 12.43% at June 30, 2013, Due in Varying Installments through 2017 | | 9 | | | — | |
|
Total Borrowings | | 1,456 | | | 1,446 | |
|
Less: Current Portion | | 457 | | | 2 | |
|
Long-Term Portion | | $ | 999 | | | $ | 1,444 | |
|
|
Senior Unsecured Notes. In July 2009, we sold $1.4 billion aggregate principal amount of senior notes and received net proceeds of $1.374 billion. In August 2012, we used $250 million in cash to repay upon maturity the $250 million aggregate principal amount of the 4.125% senior notes due 2012. In March 2013, we issued $300 million aggregate principal amount of senior notes and received net proceeds of approximately $298 million. The senior notes are unsecured obligations and the discount on sale of the senior notes is amortized to interest expense utilizing the effective interest rate method. |
|
Euro Denominated Debt. In connection with our acquisition of Rowa Automatisierungssysteme GmbH (“Rowa”) on August 1, 2011, we assumed a 9 million Euro debt facility comprised of four tranches with annual interest rates ranging from 2.65% to 3.75%. These loans are payable in quarterly or semi-annual installments, with the final payment due September 30, 2020. At March 31, 2014 and June 30, 2013, the aggregate outstanding balance on these loans was $10 million and $11 million, respectively. |
|
Revolving Credit Facility. In July 2011, we entered into a five-year senior unsecured revolving credit facility with an aggregate available principal amount of $550 million. Effective as of December 10, 2012, we increased the aggregate commitments available under the credit facility from $550 million to $750 million, pursuant to the exercise of the accordion feature under the credit facility. |
|
On February 3, 2014, we drew down $50 million in principal amount under our five-year senior unsecured revolving credit facility. The proceeds of the draw down were used for general corporate purposes. We repaid this loan on February 13, 2014. |
|
Effective February 13, 2014, we amended and restated our five-year senior unsecured revolving credit facility. This modification, among other things (i) extends the maturity date of the credit facility from July 6, 2016 to February 13, 2019; (ii) includes lower applicable interest rates; (iii) subject to certain conditions, provides CareFusion the option to increase the commitments under the credit facility by up to $250 million, to the extent that existing or new lenders agree to provide such additional commitments; (iv) includes a $25 million letter of credit sub-facility; and (v) provides additional flexibility for borrowings in currencies other than U.S. dollars. The other material terms of the credit facility, including covenants, remain unchanged. Borrowings under the amended and restated credit facility bear interest at a rate per annum that is comprised of a reference rate, which is generally based on the British Bankers Association LIBOR Rate, Federal Funds Rate, or prime rate, plus an applicable margin, which varies based upon CareFusion’s debt ratings. The amended and restated credit facility also requires us to pay a quarterly commitment fee to the lenders under the amended and restated credit facility on the amount of the lender’s unused commitments thereunder based upon CareFusion’s debt ratings. The amended and restated credit facility contains several customary covenants including, but not limited to, limitations on liens, subsidiary indebtedness, dispositions, and transactions with affiliates. In addition, the amended and restated credit facility contains financial covenants requiring us to maintain a consolidated leverage ratio of no more than 3.50:1.00 as of the end of any period of four fiscal quarters, and a consolidated interest coverage ratio of at least 3.50:1.00 as of the end of any period of the most recent four fiscal quarters. The amended and restated credit facility is subject to customary events of default, including, but not limited to, non-payment of principal or other amounts when due, breach of covenants, inaccuracy of representations and warranties, cross-default to other material indebtedness, certain ERISA-related events, certain voluntary and involuntary bankruptcy events, and change of control. We were in compliance with all of the amended and restated credit facility covenants at March 31, 2014. |
|
At March 31, 2014 and June 30, 2013, there were no amounts outstanding under the amended and restated credit facility or the five-year senior unsecured revolving credit facility. |
|
Other Obligations. We maintain other obligations that consist primarily of additional notes, loans and capital leases, which were $9 million at March 31, 2014 (net of an unamortized discount of $1 million) and were not material at June 30, 2013. Obligations related to capital leases are secured by the underlying assets, and the discount on principal balance is amortized to interest expense utilizing the effective interest rate method. Included within this $9 million was a 24 million Chinese Yuan debt facility that we assumed in connection with our acquisition of Vital Signs. This loan has an annual interest rate of 5.60% and is payable in monthly installments, with the final payment due May 30, 2014. At March 31, 2014, the aggregate outstanding balance on this loan was $4 million. |
Letters of Credit and Bank Guarantees. At March 31, 2014 and June 30, 2013, we had $27 million and $24 million, respectively, of letters of credit and bank guarantees outstanding. |