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2015 Report on Form 10-K United States Postal Service 49
Included in the estimate of deferred revenue–prepaid postage is an estimate for mail that is in-transit within the Postal Service
processing and delivery network. The following table provides details for Deferred revenue–prepaid postage from the
accompanying Balance Sheets as of September 30, 2015, and 2014:
(in millions) 2015 2014
Forever stamps $ 2,304 $ 2,272
Mail in-transit 520 279
Meters 349 392
Other 131 121
Total deferred revenue-prepaid postage $ 3,304 $ 3,064
NOTE 7 - DEBT
Under the Postal Reorganization Act, as amended by Public Laws 101-227 and 109-435, the Postal Service can issue debt
obligations. The Postal Service is limited by statute to net annual debt increases of $3.0 billion. Total debt cannot exceed $15.0
billion. Postal Service debt is issued to the FFB, a government-owned corporation under the general supervision of the Secretary
of the Treasury.
The Postal Service has two revolving credit line facilities, renewable annually with the FFB, both of which have been extended
until April 2016. One facility, a short-term credit line, enables the Postal Service to draw up to $3.4 billion with two days prior
notice. Borrowings under this credit line are typically on an overnight basis, but can have a maximum term of up to one year.
The second credit line, which only allows for borrowings on an overnight basis, enables borrowings of up to $600 million on
the same business day that funds are requested. The interest rates for borrowings under these credit facilities are determined
by the U.S. Treasury each business day. As of September 30, 2015, these two revolving credit facilities were fully drawn.
Additionally, under the provisions of a note purchase agreement with the FFB, the Postal Service can issue a series of notes
with varying provisions with two days prior notice. The note purchase agreement, renewable annually, was extended to
September 30, 2016.
These credit line facilities and note arrangements provide the flexibility to borrow short or long-term, using floating or fixed-
rate instruments. Fixed-rate notes can be either callable or non-callable at the option of the Postal Service. All of the Postal
Service’s debt is unsecured, not subject to sinking fund requirements and can be repaid at any time at a price determined by
the Secretary of the Treasury based on prevailing interest rates in the U.S. Treasury security market at the time of repayment.
As of September 30, 2015, the premium associated with a prepayment of all debt was $504 million based on prevailing interest
rates. The weighted average interest rate for all outstanding debt was 1.272% as of September 30, 2015.