ADT 2010 Annual Report Download - page 206

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Debt (Continued)
approximately $3 million and a debt discount of approximately $2 million. The net proceeds, along with
other available funds, were used to redeem all of the Company’s outstanding 6.375% notes due
October 2011 (the ‘‘2011 notes’’). The 2015 notes are unsecured and rank equally with TIFSA’s other
unsecured and unsubordinated debt. TIFSA may redeem any of the 2015 notes at any time by paying
the greater of the principal amount of the notes or a ‘‘make-whole’’ amount, plus accrued and unpaid
interest. The holders of the 2015 notes have the right to require TIFSA to repurchase all or a portion
of the notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus
accrued and unpaid interest upon the occurrence of a change of control triggering event, which
requires the occurrence of both a change of control and a rating event, each as defined in the
Indenture governing the notes. The debt issuance costs will be amortized from the date of issuance to
the maturity date. Interest is payable semiannually on April 15th and October 15th.
On May 28, 2010, the Company redeemed all of its 2011 notes, 7% notes due 2028 and 6.875%
notes due 2029 outstanding at that time, which aggregated $878 million in principal amount. As a result
of the debt redemption, the Company recorded an $87 million charge to other expense, net as a loss on
extinguishment of debt. The charge is comprised of the make-whole premium, write-off of the
unamortized debt issuance costs and discount related to the extinguished bonds and a net loss
recognized upon termination of the associated interest rate swap contracts related to the 2011 notes.
On October 5, 2009, TIFSA issued $500 million aggregate principal amount of 4.125% notes due
on October 15, 2014, which are fully and unconditionally guaranteed by the Company (the ‘‘2014
notes’’). TIFSA received net proceeds of approximately $495 million after deducting debt issuance costs
of approximately $3 million and a debt discount of approximately $2 million. The 2014 notes are
unsecured and rank equally with TIFSA’s other unsecured and unsubordinated debt. TIFSA may
redeem any of the 2014 notes at any time by paying the greater of the principal amount of the notes or
a ‘‘make-whole’’ amount, plus accrued and unpaid interest. The holders of the 2014 notes have the
right to require TIFSA to repurchase all or a portion of the notes at a purchase price equal to 101% of
the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence
of a change of control triggering event, which requires both a change of control and a rating event,
each as defined in the Indenture governing the notes. The debt issuance costs will be amortized from
the date of issuance to the maturity date. Interest is payable semiannually on April 15th and
October 15th.
Fiscal 2009
On January 9, 2009, TIFSA issued $750 million aggregate principal amount of 8.5% notes due on
January 15, 2019, which are fully and unconditionally guaranteed by the Company (the ‘‘2019 notes’’).
TIFSA received net proceeds of approximately $745 million after underwriting discounts and offering
expenses of approximately $5 million. The 2019 notes are unsecured and rank equally with TIFSA’s
other unsecured and unsubordinated debt. TIFSA may redeem any of the 2019 notes at any time by
paying the greater of the principal amount of the notes or a ‘‘make-whole’’ amount, plus accrued and
unpaid interest. The holders of the 2019 notes have the right to require TIFSA to repurchase all or a
portion of the notes at a purchase price equal to 101% of the principal amount of the notes
repurchased, plus accrued and unpaid interest upon the occurrence of a change of control triggering
event, which requires both a change of control and a rating event as defined by the Indenture
governing the notes. Additionally, the holders of the 2019 notes have the right to require the Company
to repurchase all or a portion of the 2019 notes on July 15, 2014 at a purchase price equal to 100% of
118 2010 Financials