ADT 2007 Annual Report Download - page 219

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. Debt (Continued)
Debt Tenders
On April 27, 2007, Tyco announced that, in connection with the Separation, Tyco and certain of its
subsidiaries that are issuers of its corporate debt had commenced tender offers to purchase for cash
substantially all of its 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. Tyco received acceptance notices for approximately $2.1 billion, or 36% of its
outstanding non-convertible U.S. debt and approximately $726 million or 97% of its outstanding
convertible U.S. debt. Debt which was not tendered in an amount of approximately $3.8 billion remains
with Tyco.
Additionally, Tyco International Group S.A., a wholly-owned subsidiary of the Company 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. Tyco
received acceptance notices for approximately $1.5 billion, or 80% of its EMTN Notes. The remaining
EMTN Notes were repurchased pursuant to an optional redemption.
In connection with the debt tender offers, Tyco 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, Tyco, certain of its 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. Tyco borrowed approximately $8.9 billion under the unsecured bridge loan facilities to
fund its debt tender offers, repay its 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. Tyco 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 its credit rating. As of September 28, 2007, Tyco’s aggregate commitment under its
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 the Company’s
unsecured bridge loan facility expired. The Company’s unsecured revolving credit facility and its letter
of credit facility described below provide the lenders under those facilities with the right to demand
repayment of outstanding amounts, and to terminate commitments to extend additional credit, if
2007 Financials 127