Long-Term Obligations and Other Short-Term Borrowings
The following table summarizes long-term obligations and other short-term borrowings at June 30:
|
| | | | | | | |
(in millions) | 2013 | | 2012 |
1.7% Notes due 2018 | $ | 399 |
| | $ | — |
|
1.9% Notes due 2017 | 250 |
| | 250 |
|
3.2% Notes due 2022 | 247 |
| | 250 |
|
3.2% Notes due 2023 | 549 |
| | — |
|
4.0% Notes due 2015 | 524 |
| | 536 |
|
4.6% Notes due 2043 | 349 |
| | — |
|
4.625% Notes due 2020 | 527 |
| | 538 |
|
5.5% Notes due 2013 | — |
| | 304 |
|
5.8% Notes due 2016 | 301 |
| | 305 |
|
5.85% Notes due 2017 | 157 |
| | 160 |
|
6.0% Notes due 2017 | 200 |
| | 206 |
|
7.0% Debentures due 2026 | 124 |
| | 125 |
|
7.8% Debentures due 2016 | 37 |
| | 37 |
|
Other obligations | 190 |
| | 183 |
|
Total | $ | 3,854 |
| | $ | 2,894 |
|
Less: current portion of long-term obligations and other short-term borrowings | 168 |
| | 476 |
|
Long-term obligations, less current portion | $ | 3,686 |
| | $ | 2,418 |
|
Maturities of long-term obligations and other short-term borrowings are as follows: $168 million, $525 million, $21 million, $788 million, $556 million for fiscal 2014 through 2018, and $1,796 million thereafter.
Long-Term Debt
The 1.7%, 1.9%, 3.2%, 4.0%, 4.6%, 4.625%, 5.8%, 5.85% and 6.0% Notes represent unsecured obligations of Cardinal Health, Inc. The 7.0% and 7.8% Debentures represent unsecured obligations of Allegiance Corporation (a wholly-owned subsidiary), which Cardinal Health, Inc. has guaranteed. None of these obligations are subject to a sinking fund and the Allegiance obligations are not redeemable prior to maturity. Interest is paid pursuant to the terms of the obligations. These notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $12.3 billion.
In June 2013, we used cash on hand to repay $300 million of our 5.5% Notes that were due on June 15, 2013.
In February 2013, we sold in a registered offering $400 million aggregate principal amount of 1.7% Notes that mature on March 15, 2018, $550 million aggregate principal amount of 3.2% Notes that mature on March 15, 2023 and $350 million aggregate principal amount of 4.6% Notes that mature on March 15, 2043. These notes are unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. We used the proceeds to fund a portion of the purchase price of AssuraMed as discussed in Note 2.
In connection with our agreement to acquire AssuraMed, on February 13, 2013, we obtained a commitment letter from certain financial institutions for a $1.3 billion unsecured bridge term loan facility that could have been used to complete the acquisition. We incurred fees of $5 million related to this facility, which are included in interest expense, net in the consolidated statements of earnings. No amounts were drawn under the facility and upon receipt of the net proceeds of the notes offering on February 22, 2013, we terminated the commitment letter.
In May 2012, we sold in a registered offering $250 million aggregate principal amount of 1.9% Notes that mature on June 15, 2017 and $250 million aggregate principal amount of 3.2% Notes that mature on June 15, 2022. These notes are unsecured and unsubordinated obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness.
In December 2010, we sold in a registered offering $500 million aggregate principal amount of 4.625% Notes that mature on December 15, 2020. These notes are unsecured and unsubordinated obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness.
The 6.0% Notes due 2017, 1.9% Notes due 2017, 1.7% Notes due 2018, 4.625% Notes due 2020, 3.2% Notes due 2022, 3.2% Notes due 2023 and 4.6% Notes due 2043 require us to offer to purchase the notes at 101% of the principal amount plus accrued and unpaid interest, if we have a defined change of control and specified ratings below investment grade by Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch Ratings.
Other Financing Arrangements
In addition to cash and equivalents, at June 30, 2013 and 2012, our sources of liquidity included a $1.5 billion commercial paper program backed by a $1.5 billion revolving credit facility. The revolving credit facility exists largely to support issuances of commercial paper as well as other short-term borrowings for general corporate purposes. On June 4, 2013 we extended the term of the revolving credit facility to June 4, 2018.
On November 6, 2012, we renewed our $950 million committed receivables sales facility program through Cardinal Health Funding, LLC ("CHF") until November 6, 2014. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells the receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors.
We had no outstanding borrowings from the commercial paper program and no outstanding balance under the committed receivables sales facility program at June 30, 2013 and 2012. We also had no outstanding balance under the revolving credit facility at June 30, 2013 and 2012, except for $43 million and $44 million, respectively, of standby letters of credit. Our revolving credit facility and committed receivables sales facility program require us to maintain a consolidated interest coverage ratio, as of any fiscal quarter end, of at least 4-to-1 and a consolidated leverage ratio of no more than 3.25-to-1. As of June 30, 2013, we were in compliance with these financial covenants.
We also maintain other short-term credit facilities and an unsecured line of credit that allowed for borrowings up to $304 million and $218 million at June 30, 2013 and 2012, respectively. The $190 million and $183 million balance of other obligations at June 30, 2013 and 2012, respectively, consisted primarily of additional notes, loans and capital leases.
