13. Long-Term Debt
| 20071 | 2006 | ||||
| Effective Interest Rate2 |
|||||
| Notes Payable | |||||
7.125% notes payable June 15, 2007 |
$ | – | – | $ | 400.0 |
7.750% notes payable May 31, 2011 |
600.0 | 7.65% | 600.0 | ||
4.875% notes payable March 1, 2013 |
250.0 | 5.08% | 250.0 | ||
5.875% notes payable December 1, 2036 |
500.0 | 6.11% | 500.0 | ||
The above series of notes were issued under US shelf registration statements covering up to $4,000.0 of debt securities. The notes are unsecured and there are no sinking fund requirements prior to maturity. The 2011, 2013 and 2036 notes are redeemable, in whole or in part, at the company's option at any time prior to maturity for a price at least equal to the principal amount of the notes to be redeemed, plus accrued interest. Under certain conditions related to change in control, the company is required to make an offer to purchase all, or any part, of the 2036 notes at 101 percent of the principal amount of the notes repurchased, plus accrued interest. |
|||||
| Other | 8.5 | 7.60% | 7.5 | ||
| 1,358.5 | 1,757.5 | ||||
| Less net unamortized debt costs | (24.6) | – | |||
| Add unamortized interest rate swap gains | 5.3 | – | |||
| 1,339.2 | 1,757.5 | ||||
| Less current maturities | (0.2) | (400.4) | |||
| Add current portion of amortization | 0.4 | – | |||
| 1,339.4 | 1,357.1 | ||||
2The effective interest rate by instrument includes the impact of swap gains and debt costs.
The company has entered into back-to-back loan arrangements involving certain financial assets and financial liabilities. The company has presented financial assets of $505.1 and financial liabilities of $511.0 on a net basis related to these arrangements because a legal right to set-off exists, and it intends to settle with the same party on a net basis. Other long-term debt in the above table includes a net financial liability of $5.9 (2006 – $5.9) pursuant to these arrangements. The company incurred $3.2 of debt issue costs as a result of one such arrangement entered into during 2007, which were included as a reduction to long-term debt and are being amortized using the effective interest rate method over the term of the related liability.
The company has a syndicated revolving credit facility which provides for unsecured advances of up to $750.0 (less the amount of direct borrowings and commercial paper outstanding). The facility was renewed in September 2005 for a five-year term, extended in September 2006 for one additional year, and extended in October 2007 through May 31, 2013. As at December 31, 2007, no amounts were outstanding and $660.0 was available under the facility. Principal covenants and events of default under the credit facility requirements are the same as those under the line of credit described in Note 11. The notes payable are not subject to any financial test covenants but are subject to certain customary covenants (including limitations on liens and sale and leaseback transactions) and events of default, including an event of default for acceleration of other debt in excess of $50.0. The other long-term debt instruments are not subject to any financial test covenants but are subject to certain customary covenants and events of default, including, for other long-term debt, an event of default for non-payment of other debt in excess of $25.0. Non-compliance with such covenants could result in accelerated payment of the related debt. The company was in compliance with the above-mentioned covenants at December 31, 2007.
Long-term debt at December 31, 2007 will mature as follows:
| 2008 | $ | 0.2 |
| 2009 | 0.3 | |
| 2010 | 1.8 | |
| 2011 | 600.3 | |
| 2012 | 5.9 | |
| Subsequent years | 750.0 | |
| $ | 1,358.5 |