CELGENE CORP /DE/ - 10-Q filing on 2015-04-30

Debt

3 Months Ended

Mar. 31, 2015

Short-Term Borrowings and Current Portion of Long-Term Debt: The carrying value of short-term borrowings and current portion of long-term debt outstanding at March 31, 2015 and December 31, 2014 includes:



	March 31, 2015		December 31, 2014
Commercial paper	$	—	$	99.6
2.450% senior notes due 2015	504.4		506.3
Total	$	504.4	$	605.9

Long-Term Debt: Summarized below are the carrying values of our senior notes at March 31, 2015 and December 31, 2014:



	March 31, 2015		December 31, 2014
1.900% senior notes due 2017	$	502.4	$	501.0
2.300% senior notes due 2018	402.9		401.2
2.250% senior notes due 2019	507.8		502.5
3.950% senior notes due 2020	510.4		502.8
3.250% senior notes due 2022	1,024.9		1,010.2
4.000% senior notes due 2023	715.0		708.5
3.625% senior notes due 2024	996.8		996.8
5.700% senior notes due 2040	249.6		249.5
5.250% senior notes due 2043	396.7		396.7
4.625% senior notes due 2044	996.5		996.5
Total long-term debt	$	6,303.0	$	6,265.7

At March 31, 2015, the fair value of our outstanding Senior Notes was $7.152 billion and represented a Level 2 measurement within the fair value measurement hierarchy.

From time to time, we have used treasury rate locks and forward starting interest rate swap contracts to hedge against changes in interest rates in anticipation of issuing fixed-rate notes. As of March 31, 2015, a balance of $50.8 million in losses remained in accumulated OCI related to these derivative instruments and will be recognized as interest expense over the life of the notes.

At March 31, 2015, we were party to pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of fixed-rate notes as described in Note 7. Our swap contracts outstanding at March 31, 2015 effectively convert the hedged portion of our fixed-rate notes to floating rates. From time to time we terminate the hedging relationship on certain of our swap contracts by settling the contracts or by entering into offsetting contracts. Any net proceeds received or paid in these settlements are accounted for as a reduction or increase of current and future interest expense associated with the previously hedged notes. As of March 31, 2015, we had a balance of $38.1 million of unamortized gains recorded as a component of our debt as a result of past swap contract settlements, including $2.6 million related to the settlement of swap contracts during the three months ended March 31, 2015. As of December 31, 2014, we had a balance of $38.6 million of unamortized gains recorded as a component of our debt as a result of past swap contract settlements.

Commercial Paper: The carrying value of Commercial Paper as of March 31, 2015 and December 31, 2014 was $0.0 million and $99.6 million, respectively, and approximated its fair value.

Senior Unsecured Credit Facility: We maintain a senior unsecured revolving credit facility (Credit Facility) that provides revolving credit in the aggregate amount of $1.750 billion, which was increased from $1.500 billion in April 2015. In April 2015, the term of the Credit Facility was also extended from April 18, 2018 to April 17, 2020. Subject to certain conditions, we have the right to increase the amount of the Credit Facility (but in no event more than one time per annum) up to a maximum aggregate amount of $2.000 billion. Amounts may be borrowed in U.S. dollars for general corporate purposes. The Credit Facility currently serves as backup liquidity for our Commercial Paper borrowings. At March 31, 2015, there was no outstanding borrowing against the Credit Facility.

The Credit Facility contains affirmative and negative covenants, including certain customary financial covenants. We were in compliance with all financial covenants as of March 31, 2015.