Western Union 2011 Annual Report Download - page 139

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THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):
December 31, 2011 December 31, 2010
Due in less than one year:
Commercial paper ....................................... $ 297.0 $ —
5.400% notes (a) ........................................ — 696.3
Due in greater than one year (b):
Floating rate notes due 2013 (c) ............................ 300.0 —
6.500% notes (effective rate of 5.5%) due 2014 ................ 500.0 500.0
5.930% notes due 2016 (d) ................................ 1,000.0 1,000.0
3.650% notes (effective rate of 4.4%) due 2018 (e) ............. 400.0 —
5.253% notes due 2020 (d) ................................ 324.9 324.9
6.200% notes due 2036 (d) ................................ 500.0 500.0
6.200% notes due 2040 (d) ................................ 250.0 250.0
Other borrowings ....................................... 8.8 5.9
Total borrowings at par value .................................. 3,580.7 3,277.1
Fair value hedge accounting adjustments, net (b) ............... 23.9 36.6
Unamortized discount, net ................................ (21.4) (23.8)
Total borrowings at carrying value (f) ........................... $ 3,583.2 $ 3,289.9
(a) The 5.400% notes due in November 2011 (“2011 Notes”) were repaid using the Company’s cash, including cash
generated from operations and proceeds from the Company’s 2011 borrowings and commercial paper issuances.
(b) The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest
rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate
payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest
rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related
note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest
expense” over the life of the related notes, and cause the effective rate of interest to differ from the notes’
stated rate.
(c) On March 7, 2011, the Company issued $300.0 million of aggregate principal amount of unsecured floating
rate notes due March 7, 2013 (“2013 Notes”). Interest is payable quarterly at a per annum interest rate equal
to three-month LIBOR plus 58 basis points (1.11% as of December 31, 2011) and is reset quarterly. See
below for additional detail relating to the debt issuance.
(d) The difference between the stated interest rate and the effective interest rate is not significant.
(e) On August 22, 2011, the Company issued $400.0 million of aggregate principal amount of 3.650%
unsecured fixed rate notes due 2018 (“2018 Notes”). In anticipation of this issuance, the Company entered
into interest rate lock contracts to fix the interest rate of the debt issuance, and recorded a loss on the
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