ADT 2007 Annual Report Download - page 164

Debt Tenders
On April 27, 2007, we announced that, in connection with the Separation, we and certain of our
subsidiaries that are issuers of our corporate debt had commenced tender offers to purchase for cash
substantially all of our outstanding U.S. dollar denominated public debt, aggregating approximately
$6.6 billion. Of this amount, approximately $5.9 billion was non-convertible U.S. debt and $750 million
was convertible U.S. debt, with maturities from 2007 to 2029. In conjunction with the tender offers, the
relevant issuer solicited consents for certain clarifying amendments to the indentures pursuant to which
the debt was issued. We received acceptance notices for approximately $2.1 billion, or 36% of our
outstanding non-convertible U.S. debt and approximately $726 million or 97% of our outstanding
convertible U.S. debt. Debt which was not tendered in an amount of approximately $3.8 billion remains
with us.
Additionally, Tyco International Group S.A., our wholly-owned subsidiary organized under the laws
of Luxembourg (‘‘TIGSA’’), commenced on April 30, 2007 tender offers to purchase for cash all of its
outstanding Euro and Pound Sterling denominated public debt, aggregating the equivalent of
approximately $1.9 billion, with maturities from 2008 to 2031, issued under its Euro Medium Term
Note Programme (the ‘‘EMTN Notes’’) and a consent solicitation for certain clarifying amendments to
the fiscal agency agreement pursuant to which the EMTN Notes were issued. We received acceptance
notices for approximately $1.5 billion, or 80% of our EMTN Notes. The remaining EMTN Notes were
repurchased pursuant to an optional redemption.
In connection with the debt tender offers, we incurred a pre-tax charge for the early
extinguishment of debt of approximately $647 million, for which no tax benefit is available (see
Note 5).
TIGSA’s remaining debt was contributed to Tyco International Finance S.A. (‘‘TIFSA’’), a wholly
owned subsidiary of the Company and successor company to TIGSA.
Bank and Revolving Credit Facilities
On April 25, 2007, we, certain of our subsidiaries and a syndicate of banks entered into three
364-day unsecured bridge loan facilities with an aggregate commitment amount of $10 billion. At the
end of May 2007, the aggregate commitment amount under these facilities was increased to
$12.5 billion. We borrowed approximately $8.9 billion under the unsecured bridge loan facilities to fund
our debt tender offers, repay our existing bank credit facilities and to finance the class action
settlement. Of this amount, approximately $4.3 billion and $3.6 billion was assigned to Covidien and
Tyco Electronics, respectively. We initially guaranteed the new unsecured bridge loan facilities and
Covidien and Tyco Electronics each assumed Tyco’s obligations with respect to their unsecured bridge
loan facilities upon the Separation. We no longer guarantee those assumed amounts. This facility has a
variable interest rate based on LIBOR. The margin over LIBOR payable by TIFSA can vary based on
changes in our credit rating. As of September 28, 2007, our aggregate commitment under our
unsecured bridge loan facility was $4.0 billion and $367 million remained outstanding with a weighted-
average interest rate of 5.5%.
On October 1, 2007, the commitments with respect to the unused portion of our unsecured bridge
loan facility expired. Our unsecured revolving credit facility described below and our letter of credit
facility described in Commitments and Contingencies—Contractual Obligations, provide the lenders under
those facilities with the right to demand repayment of outstanding amounts, and to terminate
commitments to extend additional credit, if (i) certain of our outstanding public debt is declared due
and payable and (ii) we do not have sufficient liquidity available under our unsecured bridge loan
facility to refinance such debt. As a result, on November 27, 2007, we secured additional firm
commitments from certain of our lenders under the bridge loan facility. These additional commitments
provide us with sufficient liquidity to repay the outstanding public debt with borrowings of up to
72 2007 Financials