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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
58
8. Long-term Debt
December 31,
2008 2007
Recourse debt
8.55% notes due 2009 (1) $ - $ 150,000
5.32% credit facility due 2012 150,000 150,000
4.63% notes due 2012 400,000 400,000
3.88% notes due 2013 375,000 375,000
4.88% notes due 2014 450,000 450,000
5.00% notes due 2015 400,000 400,000
4.75% notes due 2016 500,000 500,000
5.75% notes due 2017 500,000 500,000
2.37% to 5.13% notes due 2018 (2) 350,000 350,000
2.24% to 4.98% notes due 2018 250,000 -
5.25% notes due 2037 500,000 500,000
Fair value hedges basis adjustment 76,043 25,753
Mortgage - 13,186
Other (3) (16,178) (11,864)
Total long-term debt $ 3,934,865 $ 3,802,075
(1) In 2002, we terminated an interest rate swap associated with these notes, resulting in an effective interest rate of 5.05%. These
notes are reported in current portion of long-term debt at December 31, 2008.
(2) In April 2003, we entered into an interest rate swap for an aggregate notional amount of $350 million. The interest rate swap
effectively converted the fixed rate of 4.75% on $350 million of our notes, due 2018, into variable interest rates. The variable
rates payable by us in connection with the swap agreement were based on six month LIBOR less a spread of 22.8 basis points and
the fixed rate received by us matched the fixed interest payment due on the notes. On November 21, 2008, we unwound this
interest rate swap. This transaction was not undertaken for liquidity purposes but rather to fix our effective interest rate to 3.2%
for the remaining term of these notes. We received $44 million, excluding accrued interest, associated with the unwind of this
interest rate swap. This amount will be reflected as a reduction of interest expense over the remaining term of these notes.
(3) Other consists primarily of debt discounts and premiums.
On March 4, 2008, we issued $250 million of 10 year fixed rate notes with a coupon rate of 5.60%. The interest is paid semi-annually
beginning September 2008. The notes mature on March 15, 2018. We simultaneously entered into two interest rate swaps for a total
notional amount of $250 million to convert the fixed rate debt to a floating rate obligation bearing interest at 6 month LIBOR plus
111.5 basis points. The proceeds from these notes were used for general corporate purposes, including the repayment of commercial
paper and repurchase of our stock.
In December 2007, we entered into a $150 million syndicated bank transaction priced at 3 month LIBOR plus 35 basis points. The
proceeds from this credit facility, due 2012, were used to pay off the $150 million variable rate debt that was due in 2010.