Bausch & Lomb 1999 Annual Report

10. Debt
Short-term debt at December 25, 1999 and December 26, 1998
consisted of $20.9 and $101.9 in U.S. borrowings and $25.0 and
$58.5 in non-U.S. borrowings, respectively. To support its liquidity
requirements, the company maintains U.S. revolving credit
agreements. During the second quarter of 1999, the company
restructured its revolving credit agreements and now maintains
364-day bilateral revolving credit agreements totaling $500.0.
The interest rate under these agreements is based on LIBOR, or
at the company’s option, such other rate as may be agreed upon
by the company and the bank. No debt was outstanding under
these agreements at December 25, 1999. In addition, the company
maintains other lines of credit on which it may draw to meet its
financing requirements. The company believes its existing credit
facilities provide adequate liquidity to meet obligations, fund
capital expenditures and invest in potential growth opportunities.
Commitment fees on the revolving credit agreements fluctuate
according to the long-term debt ratings of the company and were
See the future 36 Bausch & Lomb
0.1% as of December 25, 1999. The company also maintains
unused U.S. bank lines of credit amounting to approximately
$27.0. Compensating balance arrangements for these lines are
not material.
During 1999, the company terminated two seven-year
interest rate swap agreements. Each swap agreement had a
notional amount of $100.0 and was used to convert $200.0 of
U.S. commercial paper into fixed-rate obligations with effective
interest rates, prior to termination, of 6.48%.
Average short-term interest rates, which include the effect of
the interest rate swap agreements in 1998, were 5.4% and 5.7%
for the years ended 1999 and 1998, respectively. The maximum
amount of short-term debt at the end of any month was $261.4
in 1999 and $893.3 in 1998. Average short-term, month-end
borrowings were $171.9 in 1999 and $550.1 in 1998.
The components of long-term debt were:
Interest Rate Percentage December 25, 1999 December 26, 1998
Fixed-rate notes payable
Notes due in 1999 2.21-2.28 $ .– $ 25.8
Notes due in 2001 or 20111 6.15 100.0 100.0
Notes due in 2001 or 20262 6.56 100.0 100.0
Notes due in 20033 5.95 85.0 85.0
Notes due in 2003 or 20131 6.38 100.0 100.0
Notes due in 20044 6.75 200.0 200.0
Notes due in 2005 or 20251 6.50 100.0 100.0
Notes due in 20284 7.13 200.0 200.0
All other fixed-rate notes
Variable rate and other borrowings
Various .– 7.0
Promissory notes5 – .– 300.0
Securitized trade receivables expiring in 2002 5.446 75.0 75.0
Industrial Development Bonds due in 2015 5.156 8.5 8.5
Other Various 9.5 11.1
978.0 1,312.4
Less current portion (1.0) (31.1)
$977.0 $1,281.3
1 Notes contain put/call options exercisable at 100% of par in 2001, 2003 and 2005 for the 6.15%, 6.38% and 6.50% notes, respectively. The company has also entered into remarketing
agreements with respect to each of these issues, which allow the agent to call the debt from the holders on the option exercisable dates, and then remarket them. If this
right is exercised the coupon rate paid by the company will reset to a rate higher than the then current market rate.
2 Notes contain an option allowing the holder to put these notes back to the company in 2001; otherwise the notes mature in 2026.
3 An interest rate swap agreement effectively converts this note to a floating-rate liability. At December 25, 1999, the effective rate on these notes was 5.88%.
4 The company, at its option, may call these notes at any time pursuant to a make-whole redemption provision, which would compensate holders for any changes in market value
of the notes upon early extinguishment.
5 At December 26, 1998, a long-term revolving credit agreement supported $300.0 short-term unsecured promissory notes which were classified as long-term debt.
6 Represents rate at December 25, 1999.