Dell 2008 Annual Report Download - page 71

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Long-Term Debt and Interest Rate Risk Management
The following table summarizes our long-term debt at:
January 30, February 1,
2009 2008
(in millions)
Long-term debt:
Indenture:
$600 million issued on April 17, 2008 at 4.70% due April 2013 with interest payable April 15
and October 15 $ 599 $ -
$500 million issued on April 17, 2008 at 5.65% due April 2018 with interest payable April 15
and October 15 499 -
$400 million issued on April 17, 2008 at 6.50% due April 2038 with interest payable April 15
and October 15 400 -
Senior Debentures
$300 million issued on April 1998 at 7.10% due April 2028 with interest payable April 15 and
October 15 (includes the impact of interest rate swaps) 400 359
Senior Notes
$200 million issued on April 1998 at 6.55% due April 2008 with interest payable April 15 and
October 15 (includes fair value adjustment related to SFAS 133) - 201
1,898 560
Other - 2
Less current portion - (200)
Total long-term debt $ 1,898 $ 362
During Fiscal 2009, Dell Inc. issued and sold debt comprising $600 million aggregate principal amount due 2013 with a fixed interest rate of 4.70%
("2013 Notes"), $500 million aggregate principal amount due 2018 with a fixed interest rate of 5.65% ("2018 Notes"), and $400 million aggregate
principal amount due 2038 with a fixed interest rate of 6.50% Notes ("2038 Notes"), and together with the 2013 Notes and the 2018 Notes,
("Notes"). The Notes are unsecured obligations and rank equally with Dell's existing and future unsecured senior indebtedness. The Notes
effectively rank junior to all indebtedness and other liabilities, including trade payables, of Dell's subsidiaries. The net proceeds from the offering of
the Notes were approximately $1.5 billion after payment of expenses of the offering. The estimated fair value of the long-term debt was
approximately $1.5 billion at January 30, 2009, compared to a carrying value of $1.5 billion at that date.
The Notes were issued pursuant to an Indenture dated as of April 17, 2008 ("Indenture"), between Dell and a trustee. The Indenture contains
customary events of default with respect to the Notes, including failure to make required payments, failure to comply with certain agreements or
covenants and certain events of bankruptcy and insolvency. The Indenture also contains covenants limiting Dell's ability to create certain liens, enter
into sale-and-leaseback transactions and consolidate or merge with, or convey, transfer or lease all or substantially all of Dell's assets to, another
person. The Notes will be redeemable, in whole or in part at any time, at Dell's option, at a "make-whole premium" redemption price calculated by
Dell equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed; and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as
defined in the Indenture) plus 35 basis points, plus accrued interest thereon to the date of redemption.
The Senior Debentures generally contain no restrictive covenants, other than a limitation on liens on Dell's assets and a limitation on sale-and-
leaseback transactions involving Dell property. Interest rate swap agreements were entered into concurrently with the issuance of the Senior
Debentures to convert the fixed rate to a floating rate for a notional amount of $300 million and were set to mature April 15, 2028.
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