McKesson 2016 Annual Report Download - page 106

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Revolving Credit Facilities
During the third quarter of 2016, we entered into a syndicated $3.5 billion five-year senior unsecured
revolving credit facility (the “Global Facility”). The Global Facility has a $3.15 billion aggregate sublimit of
availability in Canadian dollars, British pound sterling and Euros. The remaining terms and conditions of the
Global Facility are substantially similar to those previously in place under the $1.3 billion revolving credit
facility which was terminated in October 2015. There were no borrowings outstanding under this facility as of
March 31, 2016.
The Global Facility contains a financial covenant which obligates the Company to maintain a debt to capital
ratio of no greater than 65% and other customary investment grade covenants. If we do not comply with these
covenants, our ability to use the Global Facility may be suspended and repayment of any outstanding balances
under the Global Facility may be required. At March 31, 2016, we were in compliance with all covenants.
At March 31, 2015, we had a syndicated $1.3 billion five-year senior unsecured revolving credit facility
with the original expiration date in September 2016, as well as a syndicated €500 million five-year senior
unsecured revolving credit facility with the original expiration date in February 2018. Both revolving credit
facilities were terminated in connection with the execution of a new $3.5 billion global facility in October 2015,
as discussed above. There were no borrowings outstanding under these facilities during the last three years, and
as of March 31, 2015.
We also maintain bilateral credit lines primarily denominated in Euros with a total committed and
uncommitted balance of $427 million. These credit lines have interest rates ranging from 0.18% to 6.00%.
During 2016 and 2015, we borrowed $641 million and $225 million and repaid $635 million and $267 million
under these credit lines primarily related to short-term borrowings. Borrowings and repayments during 2014
were not material. As of March 31, 2016 and 2015, there were $28 million and $29 million outstanding under
these credit lines.
Accounts Receivable Facilities
Following the execution of the Global Facility, we also terminated an accounts receivable sales facility (the
“AR Facility”) with a committed balance of $1.35 billion during the third quarter of 2016. There were no
borrowings outstanding under the AR Facility during 2016 and 2015. In 2014, we borrowed $550 million under
the AR Facility and repaid $550 million. At March 31, 2015, there were no secured borrowings and related
securitized accounts receivable outstanding under the AR Facility. The AR Facility contained requirements
relating to the performance of the accounts receivable and covenants relating to the Company. If we did not
comply with these covenants, our ability to use the AR Facility would have been suspended and repayment of
any outstanding balances under the AR Facility would have been required. At March 31, 2015, we were in
compliance with all covenants.
We also have Accounts Receivable Factoring Facilities (the “Factoring Facilities”) denominated in foreign
currencies. Transactions under these facilities are accounted for as secured borrowings and have interest rates
ranging from 0.85% to 1.26%. During 2016, 2015 and 2014, we borrowed $919 million, $2,875 million and
$570 million and repaid $1,055 million, $2,908 million and $575 million in short-term borrowings under these
facilities. At March 31, 2016 and 2015, there were $7 million and $135 million in secured borrowings
outstanding under these facilities. All of the Factoring Facilities expired through April 2016.
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