Western Union 2011 Annual Report Download - page 73

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Financing Resources
As of December 31, 2011, we had the following outstanding borrowings (in millions):
Due in less than one year:
Commercial paper ............................................................... $ 297.0
Due in greater than one year (a):
Floating rate notes due 2013 (b) .................................................... 300.0
6.500% notes (effective rate of 5.5%) due 2014 ........................................ 500.0
5.930% notes due 2016 (c) ........................................................ 1,000.0
3.650% notes (effective rate of 4.4%) due 2018 (d) ..................................... 400.0
5.253% notes due 2020 (c) ........................................................ 324.9
6.200% notes due 2036 (c) ........................................................ 500.0
6.200% notes due 2040 (c) ........................................................ 250.0
Other borrowings ................................................................ 8.8
Total borrowings at par value ........................................................ 3,580.7
Fair value hedge accounting adjustments, net (a) ....................................... 23.9
Unamortized discount, net ......................................................... (21.4)
Total borrowings at carrying value (e) ................................................. $ 3,583.2
(a) We utilize interest rate swaps designated as fair value hedges to effectively change the interest rate
payments on a portion of our notes from fixed-rate payments to short-term LIBOR-based variable rate
payments in order to manage our 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.
(b) On March 7, 2011, we 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.
(c) The difference between the stated interest rate and the effective interest rate is not significant.
(d) On August 22, 2011, we issued $400.0 million of aggregate principal amount of 3.650% unsecured fixed
rate notes due 2018 (“2018 Notes”). In anticipation of this issuance, we entered into interest rate lock
contracts to fix the interest rate of the debt issuance, and recorded a loss on the contracts of $21.6 million,
which increased the effective rate to 4.4%, in “Accumulated other comprehensive loss,” which will be
amortized into “Interest expense” over the life of the 2018 Notes. See below for additional detail relating to
the debt issuance.
(e) As of December 31, 2011, our weighted-average effective rate on total borrowings was approximately 4.8%.
Commercial Paper Program
Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not
to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving
Credit Facility. Our commercial paper borrowings may have maturities of up to 397 days from date of issuance.
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