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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
and (2) a downgrade of a Series below an investment grade rating by each of Fitch Ratings, Moody’s Investors
Service, Inc. and Standard & Poor’s Ratings Services within a specified period, an offer must be made to
purchase that Series from the holders at a price in cash equal to 101% of the then outstanding principal amount of
that Series, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture and the
related officers’ certificate for each Series, subject to the exceptions and in compliance with the conditions as
applicable, specify that we may not incur liens, enter into sale and leaseback transactions or consolidate, merge
or sell all or substantially all of our assets. The indentures also contain customary events of default provisions.
We also have Euro-denominated corporate bonds consisting of 4.00% bonds due October 18, 2016 and
4.50% bonds due April 26, 2017. Interest on these bonds is due annually each year. At March 31, 2015 and 2014,
$388 million and $507 million of the 4.00% bonds and $563 million and $737 million of the 4.50% bonds, for a
total of $951 million and $1,244 million, were outstanding. At March 31, 2014, these bonds were classified
within current liabilities as bondholders had the option to redeem the bonds at par value plus accrued interest.
This redemption option expired during the first quarter of 2015 and the remaining bonds outstanding will mature
according to their respective maturity dates. Accordingly, these bonds were reclassified as long-term debt
effective in the first quarter of 2015.
We also have a Euro-denominated term loan due December 15, 2019 with a current variable interest rate of
1.93%. At March 31, 2015 and 2014, the outstanding balance of the term loan was $89 million and $100 million.
At March 31, 2014, we also had $297 million in Euro-denominated promissory notes outstanding which were all
repaid during 2015.
In 2014, we repaid our $350 million 6.50% Notes due February 15, 2014 and in 2013, we repaid our
$500 million 5.25% Notes due March 1, 2013. In 2013, we also repaid the debt we assumed in connection with
our acquisition of PSSI comprised of 6.375% Senior Notes due 2022 and 3.125% Senior Convertible Notes due
2014 for $643 million including accrued interest using cash on hand and borrowings under our 2013 Bridge
Loan, as further described below.
Scheduled future payments of long-term debt are $1,529 million in 2016, $1,619 million in 2017,
$1,086 million in 2018, $1,474 million in 2019, $19 million in 2020 and $3,982 million thereafter.
Senior Bridge Term Loan Facilities
In connection with our acquisition of Celesio, in January 2014, we entered into a $5.5 billion 364-day
unsecured Senior Bridge Term Loan Agreement (the “2014 Bridge Loan”) under terms substantially similar to
those in our existing revolving credit facility. On February 4, 2014, we borrowed $4,957 million under this
facility with such proceeds and cash on hand used to fund the acquisition of Celesio. On March 10, 2014, we
repaid $4,076 million of the 2014 Bridge Loan borrowings with funds obtained from the issuance of long-term
debt. On March 11, 2014, we repaid the remaining balance of the 2014 Bridge Loan borrowings using funds
drawn on our Accounts Receivable Sales Facility and cash on hand. On April 30, 2014, the commitments under
the 2014 Bridge Loan automatically terminated upon the settlement of the tender offers for the remaining
common shares of Celesio. During the time it was outstanding, the 2014 Bridge Loan borrowings bore interest at
1.39% per annum, based on the London Interbank Offered Rate plus a margin based on the Company’s credit
rating. Interest expense for 2014 included a total of $46 million of fees related to the 2014 Bridge Loan and a
bridge loan agreement entered into during the third quarter of 2014 in anticipation of an earlier acquisition of
Celesio.
In connection with our acquisition of PSSI, in December 2012, we entered into a $2.1 billion unsecured
Senior Bridge Term Loan Agreement (“2013 Bridge Loan”). In February 2013, we reduced the 2013 Bridge
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