NOTE 6: LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS
The components of long-term debt (net of discounts), along with maturity dates for the years subsequent to May 31, 2013, are as follows (in millions):
| May 31, | ||||||
| 2013 | 2012 | |||||
| Senior unsecured debt | ||||||
| Interest rate of 9.65%, due in 2013 | $ | - | $ | 300 | ||
| Interest rate of 7.60%, due in 2098 | 239 | 239 | ||||
| 239 | 539 | |||||
| Capital lease obligations | 1 | 116 | ||||
| 240 | 655 | |||||
| Less current portion | - | 416 | ||||
| $ | 240 | $ | 239 | |||
Interest on our fixed-rate notes is paid semi-annually. Long-term debt, exclusive of capital leases, had estimated fair values of $344 million at May 31, 2013 and $708 million at May 31, 2012. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly.
FedEx issues other financial instruments in the normal course of business to support our operations. We had letters of credit at May 31, 2013 of $347 million issued on our behalf by FedEx and $377 million in outstanding surety bonds placed by third-party insurance providers. These instruments are required under certain U.S. self-insurance programs and are also used in the normal course of international operations. The underlying liabilities insured by these instruments are reflected in our balance sheets, where applicable. Therefore, no additional liability is reflected for the letters of credit and surety bonds themselves.